Action For Underinsurance Coverage Dismissed Where Insured Settled Florida Action For Less Than Available Limits

In a recently reported case, Kovacevic et al. v ING Insurance Company of Canada et al., 2015 ONSC 3415, the court has ruled that an insured may not settle an action for less than the tortfeasor's available policy limits and then bring an action against their own automobile insurer for underinsurance coverage.

The plaintiffs were injured in a motor vehicle accident which occurred in Florida on February 4, 2004. The plaintiff's vehicle was struck by a tractor/trailer vehicle. They sued the owner of the tractor and the owner of the trailer. The owner of the tractor failed to defend and was noted in default. The owner of the trailer defended the Florida action. At the time of the accident, the owner of the trailer was insured by Lincoln General Insurance (Lincoln) with a policy limit of $1,000,000.00. In 2010, the plaintiffs settled the Florida action for $300,000.00 at a private mediation and signed a Full and Final Release in favour of the defendants and Lincoln in the