Insurance Coverage/Exclusions

(Aug 2022)

Does the Standard Ontario Automobile Insurance Policy exclude uninsured coverage, for a passenger in a stolen vehicle who at the time allegedly did not know that the vehicle was stolen? Here’s what the Court had to say about this:
[5] The allegations in the Amended Statement of Claim include that as result of the collision, the plaintiff is a person legally entitled to recover damages for bodily injuries from the driver of the uninsured automobile…
[7] …At the time of the accident, the plaintiff was asleep in the back seat. He has no recollection of the accident. He had no reason to believe that it was stolen and only found out when he woke up days after the accident.
[8] The pickup truck…theft on August 22, 2014, three days before the accident. The truck was insured with the Co-operators.
[21] The version of s. 1.8.2 [of OAP1 – Standard Auto Policy] which was in effect at the time of the accident states:
….Excluded Drivers and Driving Without Permission:
Except for certain Accident Benefits coverage, there is no coverage (including coverage for occupants) under this policy if the automobile is used or operated by a person in possession of the automobile without the owner’s consent…
[22] Both the Insurance Act and the OAP 1 exclude automobiles owned by or registered in the name of the insured person or his/her spouse from the definition of “uninsured automobile”…
[59] In the present case, there is no dispute that the vehicle in which the plaintiff was an occupant was stolen and/or operated without consent on the date of loss. Coverage would be excluded pursuant to the first clause of the first paragraph of the Exclusion as the vehicle was driven without the owner’s consent. The Exclusion clearly states that it excludes coverage for all occupants of the vehicle too, including the plaintiff.
[63] I find that the plaintiff has no recourse for recovery of damages as against the Co-operators, being the insurer of the stolen vehicle. It may be that the plaintiff is not ultimately prejudiced, as he has access to a claim against the Motor Vehicle Accident Claims Fund.

Burnham v. Co-Operators General Insurance, 2022 ONSC 4934 (CanLII), <https://canlii.ca/t/jrpgn>

S.239 Insurance Act liability coverage, is not intended to cover ‘negligent parenting’ where the defendant was, fortuitously, an occupant of the automobile in which the injured plaintiff was a passenger. So says the C.A. in a very interesting recent decision. Per extracts:
[5] …
239 (1)…insures…every…other person who…is an occupant of, an automobile owned by the insured…against liability imposed by law upon…that other person for loss or damage,
(a) arising…directly or indirectly from the use or operation of any such automobile;…
[6] …Even though Amealia’s injuries arose from the use of a vehicle, Mr. Hunt’s liability for her loss or damage does not. His liability is alleged to arise from negligent parenting, not from anything he did or did not do as an occupant connected to the use or operation of the automobile.
[7] …Nor can the plain language of section 239 be overcome by the fact that the Insurance Act is consumer protection legislation, or that policies should be construed in favour of coverage.

Hunt v. Peel Mutual Insurance Company, 2019 ONCA 656 (CanLII), <http://canlii.ca/t/j1zh1>

(May 2019)

If it discovers that an applicant had made a misrepresentation, is an automobile insurer entitled to rescind the policy ab initio on common law grounds?
Here’s what a recent C.A. decision had to say:
[40] …the legislative policy requiring all vehicles that operate on Ontario highways to be insured is to protect innocent victims of automobile accidents, and to provide some statutory accident benefits to everyone who is involved in an accident…
[41] …If an insurer were permitted to rescind an insurance contract at common law ab initio, a person who believed they were operating a vehicle with insurance could have that contract rescinded with retroactive effect, putting the person in automatic contravention of the Compulsory Automobile Insurance Act…which is clearly inconsistent with the intent of the legislature.
[42] The termination and renewal provisions of the Act and regulations provide notice periods to allow an insured…opportunity to obtain alternate coverage when they receive notice that their insurance is going to be terminated or not renewed…so that they can take steps to bridge any gap in their coverage…

Merino v. ING Insurance Company of Canada, 2019 ONCA 326 (CanLII), http://canlii.ca/t/hzzpq

(Mar 2019)

BI claim against a homeowner by her longtime tenant daughter. Usual liability coverage exclusion for claim by ‘person residing in your household.’
Q: What if that resident also historically performed chores? A very recent decision explores the availability of the “residence employee” exemption to that exclusion…and decides that it does not apply in this case:
[30] Betty had lived there for 61 years and had always paid rent from the time she graduated from high school…Elizabeth never had a specific list of duties for Betty; she testified that Betty could do what she wished at any given time and that when Betty’s health was poor, she did not do any tasks at all…
[31] There was no written contract between Elizabeth and Betty concerning work that Betty was to do. There was never a schedule propounded for doing specific work. Betty was not paid for the work she did at the house. She was not issued a T4. Elizabeth never submitted any documentation relating to Betty with respect to Employment Insurance, Canada Pension Plan benefits, or Workplace Safety and Insurance Board premiums…

Traders General Insurance Company v. Elizabeth Gibson, 2019 ONSC 1599 (CanLII), http://canlii.ca/t/hxzgl