Published In: Insurance Law Newsletter - 10.Apr.18 April 10, 2018

Case Summary: A driver’s automobile insurance policy will respond prior to the owner’s umbrella liability policy

Insurance law – Automobile insurance – Liability insurance – Multiple policies – Priority coverage – Excess liability coverage – Rights and duties of insurer – Practice – Appeals

Benson v. Walt, [2018] O.J. No. 947, 2018 ONCA 172, Ontario Court of Appeal, February 22, 2018, R.J. Sharpe, H.S. LaForme, K.M. van Rensburg JJ.A

Following a motor vehicle accident, the insurers could not agree on the order in which the three available policies should respond. The available policies were:

  • State Farm Automobile Insurance Policy (limit $300,000) for the car;
  • State Farm Personal Liability Umbrella Policy (limit $1 million) for the owner; and
  • Economical Insurance Automobile Insurance Policy (limit $1 million) for the driver.

The motion judge ruled that the State Farm auto policy was first, followed by the driver’s Economical policy and then the State Farm umbrella policy. Economical appealed, arguing that State Farm’s umbrella policy was an owner’s first loss policy and ought to apply prior to its policy and, alternatively, it argued the Economical policy and the State Farm umbrella policy were both excess policies and should respond pro rata following State Farm’s auto policy.

The Court of Appeal rejected Economical’s arguments, concluding that the owner’s policy was to respond first. The umbrella policy was not an owner’s first loss policy such that it should respond prior to the Economical policy. The driver’s Economical policy was excess to the State Farm auto policy but still primary first loss insurance. The Economical and State Farm umbrella policies did not respond pro rata as the umbrella policy provided different coverage and was excess to any underlying insurance.

This case was digested by Laura E. Miller, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Laura E. Miller at