A Court Rules Corporate Auto Insurance Takes Priority in Landmark Dispute

The crash and the coverage conflict

The case stemmed from a 2018 motorcycle accident in South Carolina. Timothy Jacob Pare was severely injured when another driver turned left into his path. The at-fault driver’s insurance covered only a fraction of Pare’s losses, with a policy limit of just $25,000.

Pare had access to two separate insurance policies that included underinsured motorist coverage, known in Ontario as OPCF 44R Family Protection Coverage:

• A TD Insurance policy on his father’s motorcycle, which he was riding at the time of the crash
• An Allstate policy from his employer, Exact Laser Measurement, which covered a Ford F150 truck, provided for his regular use as a company vehicle

With Pare’s damages agreed to be $143,500, TD Insurance initially paid the full settlement. TD then took Allstate to court, arguing that the corporate auto policy was primarily responsible for the claim.

The legal decision: Why the corporate policy was deemed primary

The court's decision turned on the specific definition of an "insured person" within the corporate policy wording. Justice T.A. Heeney ruled that Allstate’s policy was primary because Pare was an employee who had been provided with a company vehicle for his regular use.

• Allstate's corporate policy applied: The ruling emphasized that the OPCF 44R endorsement in a corporate fleet policy is designed to extend coverage to employees, even when they are not driving a company vehicle. Since Pare was driving his father's motorcycle, which had its own underinsured motorist coverage, he met all the criteria to be an "insured person" under the Allstate policy
• Court rejected "Regular Use" exclusion: Allstate argued that Pare's regular use of the motorcycle should exclude coverage. The judge dismissed this, stating that applying such an exclusion would make the employee coverage "essentially worthless," as most employees regularly use their own vehicles. The court found that the specific, more protective language of the OPCF 44R endorsement overrides the general exclusions in the standard policy
• TD's personal policy was secondary: The TD policy only covered Pare as a "dependent relative" of his father. This coverage contained a clause that is secondary to any other available underinsured motorist coverage. Since Pare was first an "insured" under Allstate's policy, the TD policy's coverage was not triggered

What this means for you

While this is a Canadian ruling, the principles are highly relevant to US drivers for several key reasons.

• For employees using company vehicles: If your employer provides you with a vehicle for regular use, the company's insurance policy may be your primary source of coverage in an accident, even if you are driving your own car at the time. This can come as a surprise to many drivers
• The critical importance of policy review: This case underscores that insurance coverage is not always straightforward. Having multiple policies can lead to complex "priority disputes" between insurers. The details in the fine print of your policy and your employer's policy ultimately determine who pays first
• A precedent for interpreting policy language: Although US courts may not be bound by this Canadian decision, they often look to well-reasoned opinions from other jurisdictions when dealing with similar policy wording. The logic used by the court—that specific coverage clauses override general exclusions—is a universal legal principle

Key takeaway: Protect yourself with a policy review

The main lesson from this case is proactive due diligence. Do not assume your personal auto policy will always be the primary coverage.

• Ask your employer: If you have a company car, ask for a copy of the insurance policy and review its coverage limits, especially for underinsured motorist protection
• Review your own policy: Ensure your personal underinsured (UIM) coverage is robust. In the event of a serious accident caused by an underinsured driver, this coverage is your financial safety net
• Seek professional guidance: Insurance policies are complex legal contracts. If you are involved in a serious accident with multiple potential sources of coverage, consulting with a legal professional can help you navigate the claims process and ensure you recover the full compensation you are entitled to

For more information on your rights and the steps to take after a car accident, please visit our educational resource articles.