Is Your Insured's Dependant Really Dependent?
It is all or nothing when determining the issue of financial dependency under the Statutory Accident Benefits Schedule (SABS): Was the claimant principally financially dependent on support for your insured person or not?
The Ontario Auto Insurance policy defines an "insured person" to include "the named insured… and any dependant to the named insured." Further, "a person is a dependant of an individual if the person is principally dependent for financial support or care on the individual or the individual’s spouse."
Although assessing whether a person is principally dependent on an individual for “care” is beyond the expertise of a forensic accountant, determining whether or not a person is principally dependent for financial support on an individual becomes a forensic accounting process - a precise exercise using somewhat imprecise numbers. The outcome of such a process determines which insurer will bear the entire cost of the dependant person's claim under the policy.
Arbitrators have generally concluded that financial dependency on a person exists when the claimant does not have financial resources sufficient to meet at least one-half of their financial needs in the year prior to the accident. However, the determination may not be as simple as it appears.
For assistance with this determination, please consult our Financial Dependency Calculator inside the Virtual Office.