May 13, 2013 by Greg Meckbach, Associate Editor
The Ontario Court of Appeal last week ruled against Economical Insurance in finding that a woman injured 20 years ago as a child in an uninsured vehicle owned by and driven by her father is entitled to benefit from her mother’s uninsured coverage on two other vehicles which were not involved in the accident.
In May 1993, Ashley Jubenville was a passenger in a Mercury Cougar owned by her father, Kevin Jubenville, which was involved in a single vehicle accident. Ashley, who was five at the time of the accident, was injured.
For the purposes of a motion brought to the Ontario Superior Court of Justice in 2011, it was agreed there was no coverage for the Mercury Cougar.
Ashley Jubenville’s mother, Kelly Jubenville, was a named insured under an Economical Insurance policy in 1992-93 for two vehicles other than the Cougar involved in the accident, according to court records. In September 2011, Ashley Jubenville commenced legal action for accident benefits under the uninsured auto coverage under her mother’s policy.
The defendants in that action were Kevin Jubenville, Economical Insurance, Wawanesa Mutual Insurance Company and the province’s Superintendent of Financial Services. Economical was arguing that Ashley Jubenville should look to the Financial Services Commission of Ontario (FSCO)’s Motor Vehicle Accident Claims Fund (MVACF) for coverage.
In October 2012, Mr. Justice Bruce Thomas of the Ontario Superior Court of Justice ruled, in a special case, on a question of law brought by the parties. That question was whether Kevin Jubenville’s Mecurcy Cougar was an “uninsured automobile” as defined in section 265 of the Ontario Insurance Act.
That section of the law provides that an insured 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.”
However, Section 265 also stipulates that when a person is claiming damages as an occupant, the uninsured vehicle is one which “does not include an automobile owned by or registered in the name of the insured or his or her spouse.” Kelly and Kevin Joubenville were still married May 23, 1993, the time of the accident, but their divorce took effect five days later.
Economical, according to court records, had argued that Kelly and Kevin Jubenville were spouses at the time and that Ashley, as a dependent of Kelly, was excluded by Section 265(2(c) of the Insurance Act, which governs limited accident insurance and includes a definition of “persons insured under the contract.”
Ashley, Economical had argued, is “unable to look to the Economical policy for coverage” because the uninsured vehicle in which she was riding was owned and driven by Kelly’s spouse. Economical had argued that “policy reasons dictate that a domestic couple should not be able to benefit from insuring only one vehicle in a family setting where more than one vehicle is owned or registered.”
Judge Thomas ruled in October 2012 against Economical, and the Ontario Court of Appeal upheld his ruling on May 8, 2013.
Judge Thomas noted in his analysis that “one of the main objectives of the Insurance Act is consumer protection” and that the “legislative intent” is to “internalize the costs to the activity of driving and not externalize it to the general public who would fund the MVAC Fund.”
The exclusions of Section 265 (2) on who is covered, Judge Thomas noted, “should be interpreted narrowly.”
According to court records, Economical Insurance argued, on appeal, that in order to obtain coverage under her mother’s uninsured policy, Ashley was required to be an occupant of an uninsured automobile but the terms of her mother’s policy excluded “an automobile owned by or registered in the name of the insured or his or her spouse.” Because Kelly Jubenville was the insured, her husband’s Cougar was excluded from the definition, Economical had argued.
However, the Court of Appeal wrote that the definition of “the insured” can have two meanings. It can have the broader definition in Section 224 of the Insurance Act, which is “a person insured by a contract whether named or not and includes every person who is entitled to statutory accident benefits under the contract whether or not described therein as an insured person.”
It can also have a more narrow definition used in Section 265 (2), which is the definition Economical Insurance was arguing should be used. However, Judge Thomas had ruled that the definitions in section 265 (2) “do not operate to exclude Ashley Jubenville” because at the age of five, she “had no ability to effect the insurance coverage arrangements of her parents …”
The Court of Appeal also found in its ruling last week that the goal of preventing individuals from relying on uninsured coverage from some vehicles instead of insuring all of their vehicles “would not be undermined” by Judge Thomas’s decision.
“This is achieved by disentitling the claimant and his or her spouse from any claim under the uninsured coverage whenever one or the other is the owner of the uninsured vehicle,” the Court of Appeal wrote. “Those who have no control over coverage decisions, such as dependent relatives, will nonetheless be entitled to make a claim.”