Passenger Of Uninsured Driver Not Covered by Owner’s Policy

When riding as a passenger in a motor vehicle, it’s natural to expect to be covered under the owner’s or driver’s insurance coverage. However, a recent decision from the Court of Appeal for Ontario serves as a reminder that not every situation affords passengers that protection in the event of a motor vehicle accident.

No permission to drive

When the accident occurred, the appellant sustained injuries. He was a passenger in the vehicle, which was being driven by an unlicensed driver. The car was being driven without the permission of the owner. Following the accident, the appellant sued the driver of the vehicle as well as the owner of the vehicle and their insurer.

The appellant claimed that he qualified as an “insured” under the insurance policy the owner of the vehicle had purchased. As such, he claimed he was entitled to uninsured motorist coverage for damages under Section 265(1) of the Insurance Act.

Summary judgment is issued

The issue was first decided through summary judgment. The motion judge dismissed the appellant’s claim after finding that pursuant to s. 1.8.2 of the standard Ontario Automobile Policy (“OAP 1”), the insurance coverage did not apply in this case because the vehicle was being operated without the owner’s consent.  This severely limited the benefits available to the appellant.

The appellant challenged the summary judgment, asserting he did qualify as an “insured.” The appellant turned to the Insurance Act, which states

Every contract evidenced by a motor vehicle liability policy shall provide for payment of all sums that,

(a) a person insured under the contract is legally entitled to recover from the owner or driver of an uninsured automobile or unidentified automobile as damages for bodily injuries resulting from an accident involving an automobile;

(b) any person is legally entitled to recover from the owner or driver of an uninsured automobile or unidentified automobile as damages for bodily injury to or the death of a person insured under the contract resulting from an accident involving an automobile.

However, the court added that this provision is expressly “subject to the terms, conditions, provisions, exclusions and limits as are prescribed by the regulations.” OAP 1 states,

“Except for certain Accidents 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 or is driven by a person named as an excluded driver of the automobile.”

The court referenced a 2004 decision from the Ontario Court of Appeal, which held “that the effect of s. 1.8.2 is to exclude coverage for damages for personal injury under the uninsured automobile coverage where the operator is in possession of the automobile without the owner’s consent.”

The court thus sided with the motion judge’s decision, denying the appellant’s pursuit of coverage.

Many strict limitation periods apply to no-fault claims and someone’s right to sue following an accident, therefore it’s best to contact Derfel Injury Lawyers as soon as possible following an accident to make sure you do not miss a limitation period and/or miss out on your rights to compensation altogether. Contact us to meet the personal injury lawyers who will work tirelessly to achieve the best possible resolution to your car accident claim. Our office is conveniently located in Toronto. Call us at 416.847.3580 to schedule a visit at the individual office closest to you or contact us using the form below.