Man injured in a crash while sleeping in a stolen truck is covered

A man sleeping in the back of a pickup truck when it was stolen by an uninsured driver and involved in a serious crash is entitled to auto insurance coverage, the Court of Appeal for Ontario has ruled.

The Appeal Court’s ruling means Co-operators General Insurance Company’s auto policy will cover the passenger in the back of the truck, who was seriously injured in the crash that killed the driver and a front-seat passenger. Previously, the Ontario Motor Vehicle Accident Claims Fund was liable for paying the injured passenger’s uninsured motorist claim.

“At the time of the accident, [Joshua] Burnham was asleep in the back seat, and he has no recollection of the accident,” the Court of Appeal wrote in its decision released Monday. “He also claimed to have had no reason to believe that the pickup truck was stolen and only found out when he woke up days after the accident.”

The pickup truck was owned by Lorne Morais, who reported the theft on Aug. 22, 2014. The pickup truck was insured with the Co-operators General Insurance Company.

Burnham brought two separate legal actions as a result of the crash — one against the uninsured driver who stole the vehicle, and one against Co-operators, which insured the truck.

Related: An insured driver is injured when an uninsured car-jacker steals her car. Who covers?

Co-operators’ auto policy contains the following exclusion in situations when the vehicle is driven without the owner’s permission:

“…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 policy or a person who, at the time he or she willingly becomes an occupant of an automobile, knows or ought reasonably to know that the automobile is being used or operated by a person in possession of the automobile without the owner’s consent.”

Each of those three clauses is connected with the conjunction “or,” and so each should be read separately, Co-operators argued. In other words, if even one of the clauses is true, that’s enough for the exclusion to apply. In this case, the first clause was true — i.e., “the automobile is used or operated by a person in possession of the automobile without the owner’s consent.”

A lower court judge upheld Co-operators’ interpretation of the exclusion. But that interpretation doesn’t square with multiple legal principles used to decide insurance contract cases, the Appeal Court decided.

“Co-operators’ proposed interpretation would create a list of three separate exclusions that cannot be read together to inform the collective meaning of the paragraph,” the Appeal Court ruled. “This interpretation would erroneously strip the statutory interpretation exercise of all context and would create the absurd result of excluding from coverage innocent passengers in stolen vehicles based on the first clause of the first paragraph.”

The Appeal Court found the motions judge ruling did not sufficiently consider at least two other legal principles when deciding uninsured motorist insurance cases.

The first is that insurance policy “exclusions are to be interpreted and applied narrowly,” the Appeal Court wrote.

The second is that the overall legislative purpose of an auto insurance policy is to internalize the risks associated with driving among insurers. It’s not to transfer the risk to the taxpayers via claims made against the public Ontario Motor Vehicle Fund.

Feature image courtesy of iStock.com/Brandon Woyshnis