Actions Against Insurers

Insurance Act, R.S.O. 1990, c. I.8

244 Any person insured by but not named in a contract to which section 239 or 241 applies may recover indemnity in the same manner and to the same extent as if named therein as the insured, and for that purpose shall be deemed to be a party to the contract and to have given consideration therefor. R.S.O. 1990, c. I.8, s. 244.

Giuliano v. Allstate Insurance Co., 2003 CanLII 64297 (ON SC)

[38] It is significant to note that s. 262(1) does require the insurer to adjust the amount of any claim with both the insured and "any person having an interest indicated in the contract". However, in this case, the plaintiff's interest does not appear in the contract and there is no provision similar to s. 244 that applies to either direct compensation for property damage or collision coverage. Absent such a provision, a person who is not a party to the contract has no recourse against the insurer. In my view, the explanation provided by Borins J. in [page252] Yu v. St. Paul Fire & Marine Insurance Co., [1996] O.J. No. 127 (QL) (Gen. Div.), at para. 4, applies in this case:

... At common law, a person who derives a benefit under a contract of insurance, such as the plaintiff, has no legal right to enforce the contract, even though the object of the insurance is to protect him or her from claims arising from his or her negligence. It is for this reason that, in certain situations, the legislature has intervened to provide such a person recourse against the insurer, even though there is no privity of contract. An example can be found in s. 244 of the Insurance Act, R.S.O. 1990, c. I.8, which gives to an unnamed insured, in a contract of automobile insurance, the right to recover indemnity from the insurer in the same manner as if a named insured, and, for this purpose, is deemed to be a party to the insurance contract. The insurance contracts in this case come within Part III of the Act, which does not contain a provision similar to s. 244. It follows, therefore, that the plaintiff has no right of action against St. Paul at common law, or under statute.