Insurance claims are not lawsuits. One cars insured can claim damages by same policy of another car or driver.
Yes, it will be covered.

@Forever_Free is correct, an insurance claim is not a lawsuit.

But on a more basic level, the injured party would have to decide whether a lawsuit against a family member will in fact damage warm family relations. Seems like a strategically poor idea.

That happened to my neighbors across the street & yes, the insurance covered it. Of course the rate had gone up tremendously upon renewal. Don’t know that Canada’s laws are the same or not.