Auto insurance industry reels after two controversial court cases

• With gruesome precision, one of the projectiles tore through the windshield and roof of a Ford Explorer driven by Toronto teen Michael Vytlingam, who was returning with his father, Dennis, from a Florida vacation.
• In a shocking double whammy for the auto insurance industry and its defence litigators, the Court of Appeal for Ontario last week sided with the victims in both cases, upholding lower court decisions that effectively defined the incidents as motor vehicle accidents.
• "I would bet that a lot of auto policy holders would be equally surprised to think that their policy would go so far as to cover them for this sort of thing."
• What made the Vytlingam boulder-dropping case particularly bizarre was that it turned, not on the fact Michael Vytlingam was injured while riding in the Ford Explorer, but on the role played by the car of Todd Farmer, one of the North Carolina assailants, which had been left with its engine running on the overpass while the rocks were dropped.
• Citadel General Assurance Co., the Vytlingams' insurer, had already paid out about $1.5-million to the family for care and other expenses because their policy covered injuries sustained as a result of travelling in a car.
• But fortunately for the Vytlingams, the Citadel policy also contained a common "family protection coverage endorsement" enabling them to recoup up to an additional $1-million against any shortfall not covered by "an inadequately insured motorist" who causes the injuries.
• Because Mr. Farmer carried only the minimum $25,000 (U.S.) in third-party liability coverage required by North Carolina, the Vytlingams made an additional claim against Citadel.
• Geoffrey Adair, a prominent insurance-defence lawyer with Toronto litigation boutique Adair Morse LLP, who appealed the Vytlingam case on behalf Citadel, declined to comment on whether Citadel would seek leave to appeal.