Insurer of Temporary Substitute Automobile Priority Insurer for Loss Transfer Claim

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Article Summary

In Intact v. Economical, Kadey Schultz successfully argued before the Superior Court on appeal that Economical was the priority insurer permitted to claim loss transfer.

The claimant's described auto was out of service and his insurer provided a replacement rental vehicle while it was being repaired.

The claimant was then involved in an accident while driving the rental vehicle. At the time of the accident, they had possessed the rental vehicle for more than 30 days. The other vehicle in the accident was a heavy commercial vehicle insured with Intact. 

The claimant was a named insured under their own policy with Economical (which provided accident benefits coverage for temporary substitute automobiles under the OAP 1) and also a deemed named insured under the Northbridge policy which insured the rental as a described auto (under s. 3(7)(f)(ii) of the SABS).

Intact argued at arbitration that loss transfer did not apply as Economical was not the priority insurer for the claim for accident benefits. Intact argued that the OAP 1 did not extend temporary substitute coverage beyond 30 days. The arbitrator disagreed, finding that there was no temporal limitation on the temporary substiute automobile coverage under the Economical policy. As the priority insurer, Economical was permitted to claim loss transfer. 

Intact appealed to the Superior Court. On appeal, they argued that the Economical OAP 1 only insured the rental vehicle for 30 days. They also argued that the clamiant had not elected to claim benefits from Economical. 

Justice Black confirmed that the OCF-1 was submitted to Economical and there was no temporal limitation on the temporary substitute automobile coverage. Loss transfer applied.

The big takeaway from this decision? When considering potential loss transfer and priority issues, insurers should consider whether a rental vehicle or other substitute vehicle is insured by more than one insurer. 

You can read the decision in Intact v. Economical, 2021 ONSC 7750, at


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