Can you sue your auto insurance company?

By: Brennan Doherty on August 28, 2025

This article has been uodated from a previous version.

Car accidents in Canada are more common than many drivers realize. According to Transport Canada, over 1,900 people died and more than 9,200 were seriously injured in collisions in 2023 alone.

If you’re involved in a crash—say, an SUV drifts into your lane and hits your car—the aftermath can be life-changing. You might end up in the ER with a shattered arm, facing months of rehabilitation.

But what happens if, after repeated calls and emails, your auto insurance company refuses to cover your medical costs? What are your options? Can you sue your insurance provider in Canada?

This article explores the legal options available to Canadians when suing their auto insurance providers, including scenarios involving denied claims, uninsured drivers, and accident benefit disputes.

Why you might decide to sue

It's rare that a customer opts to sue their own auto insurance provider, but there are a couple of reasons an incident can escalate to that point.

Perhaps your insurance company doesn’t cover all the physical rehabilitation you need after an accident. Maybe your insurance company denies you coverage because it believes you were involved in a crime at the time of the accident. Or maybe the other person involved in the collision wasn’t properly insured, forcing your auto insurance company to foot the entire bill.

Suing your insurer after an accident with an uninsured driver

Allen Wynperle, a personal injury lawyer based in Ontario who handles auto insurance cases, explains that if you’re in an accident with an uninsured or unidentified person, your own insurance company will handle the claim. You’re still entitled to accident benefits, but any settlement can only be pursued against your insurer.

“That’s a situation when you might sue your own insurance company,” says Wynperle. “Even though your insurance company has done nothing wrong.”

Suing your insurer after a denied claim

There’s also the possibility of suing your auto insurance company for denying you coverage because of the circumstances behind a collision.

While you might expect your auto insurance company to back you up, Wynperle says there are occasions where they might backtrack, like if you committed a crime during the course of the accident, though he says that’s “pretty rare.”

In fact, Wynperle says it’s quite rare for an auto insurance company to refuse to cover you at all.

Suing for accident benefit shortfalls

In other jurisdictions, such as Alberta and Saskatchewan, it is possible to sue your own insurance company for accident benefits without going through a tribunal.

There might, however, be an issue with how comprehensively your insurer covers you.

For example, in November 2018, a team of lawyers representing 15 people filed claims against some of Ontario’s biggest insurers. The insurers, who included Aviva, Intact, Belair, and Allstate and others, were accused of short-changing auto accident victims for years.

The plaintiffs claimed that the insurers didn’t pay and/or reimburse HST on accident benefits in some cases while including it in the calculation of others. (None of the allegations have been proven in court.)

The insurance companies argued that the matter must be settled at the Licence Appeal Tribunal’s Automobile Accident Benefits Service (LAT-AABS), not via the provincial court system.

Paul Harte, an Ontario medical malpractice lawyer on the claimants’ legal team, says the LAT-AABS isn’t worthwhile for many clients. While it only costs $100 to file an application, most claims are for very small sums of cash – no more than $150.

“You have a situation where you effectively have no access to justice,” he says.

Where your accident takes place changes how, and if you can sue

Whether or not you can sue your own insurance company largely depends on where the collision took place.

In a nutshell: Manitoba, Saskatchewan, and British Columbia all use public auto insurance run by the government. Quebec uses a hybrid model: public insurance for bodily injury claims, and private for vehicle damage.

The rest of the Canadian provinces use private insurance markets that require varying degrees of mandatory minimum coverage. Ontario, for instance, requires drivers to carry accident benefits coverage and a minimum of $200,000 in third-party liability, while in Newfoundland and Labrador, insurance coverage that provides medical payments (accident benefits) is optional.

In Ontario, British Columbia, Quebec, and Manitoba, you’re required to file an application to one of several quasi-independent legal tribunals responsible for settling accident benefits disputes.

For instance, disputes in Ontario under the Statutory Accident Benefits Schedule (SABS) are subject to the jurisdiction of the Licence Appeal Tribunal (LAT). These tribunals were created to streamline the justice process without the need for lawyers. In the other provinces, you either request arbitration with your insurance company or head straight to the courts.

Usually, the tribunal will ask you to bring documentation proving your case to a hearing where you’ll discuss how to proceed. LAT-AABS advises claimants to settle with their insurance company – or seek mediation – before filing an application to the tribunal. At present, it only handles disagreements involving a person’s entitlement to accident benefits or the amount of benefits they’re owed.

However, in other jurisdictions, such as Alberta and Saskatchewan, it is possible to sue your own insurance company for accident benefits without going through a tribunal.

In Saskatchewan, if you’re not satisfied with a personal injury benefits decision made by the Saskatchewan Government Insurance (SGI), you can appeal the decision to the Automobile Injury Appeal Commision which is an independent tribunal for hearing no-fault benefits appeals under the Personal Injury Protection Plan administered by SGI.

Alberta uses what’s known as a tort system – meaning an insurance company is required to pay out a certain amount to the policy owner, and then claimants can go after each other’s insurance providers in court.

Ontario’s tribunal troubles

Up until 2016, Ontario allowed claimants to either sue their auto insurance companies in provincial court or take their case to the Financial Services Commission of Ontario, which used to regulate the province’s various insurance companies for arbitration. (This responsibility has since been handed over to the Financial Services Regulatory Authority of Ontario).

Lawyer Wynperle opts for the latter option about 95% of the time. The arbitrators he’s dealt with have been professional, he says, and capable of quickly handling cases in a very specialized area of the law.

But in 2016, Ontario decided to “blow it up completely” for injury claims, says Wynperle, referring to the LAT-AABS. Anyone seeking an accident benefits claim must go through this tribunal.

The tribunal handles disputes between claimants and auto insurance companies related to accident benefit entitlements and the amount owed – nothing else. It’ll hear your case so long as you pay the $106 filing fee and apply within two years of your insurance company’s denial.

The 2023 amendments to the Limitations Act have provided greater clarity on certain exceptions, including those involving minors or individuals with disabilities. These changes may allow for an extension of the limitation period in specific situations.

In addition to paying the filing fee, Wynperle says claimants often need representation to navigate the complex proceedings at the LAT-AABS. (Besides, he says, the insurance company always brings one).

“If they don’t get a lawyer who can help them get the right medical evidence marshalled to prove their case, there is very little chance that they’re going to succeed,” Wynperle says.

He says the LAT-AABS doesn’t necessarily speed up justice. Instead, he believes it adds another barrier to claimants who may be incapacitated and unable to work.

“We have created an incredibly complex system, which is quite expensive to navigate and time consuming and takes a lot of expertise,” he says. “We have not created a user-friendly system.”