Canadian Underwriter

Insurer prevails where vehicle driven without owner’s consent

November 22, 2018   by Greg Meckbach

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Alberta Motor Association Insurance Company does not have to pay a claimant who was injured while riding in a vehicle driven without the owner’s consent.

The Supreme Court of Canada announced Thursday it will not hear an appeal from Ashley Cardinal over a coverage dispute with AMA.

Cardinal was injured while riding as a passenger in a vehicle being driven without the consent of the owner. There was no evidence that she actually knew the vehicle was driven without the owner’s consent.

Cardinal tried to make a claim under the family protection endorsement of her mother’s auto policy, written by AMA.

In 2017, Judge Donald Lee of the Court of Queen’s Bench ruled there was a “genuine issue” requiring a trial because the wording of the standard Alberta auto policy is ambiguous.

The ruling was overturned on appeal in Cardinal v Alberta Motor Association Insurance Company, released this past February. Cardinal applied for leave to appeal to the Supreme Court of Canada, which announced Nov. 22 it is dismissing her application.

The purpose of a family protection endorsement is to provide coverage to a claimant whose injuries are the fault of a motorist who lacks adequate liability insurance.

The underlying policy – Alberta’s standard auto policy – has an exclusion for “an occupant of any automobile which is being used without the consent of the owner thereof.”

Ontario had a similar exclusion but that was changed to exclude coverage where the occupant knows or “ought reasonably” to know the vehicle is being driven without the owner’s consent.

In 2017, Judge Lee had reasoned there was an “intention” on the part of Ontario legislature to cover passengers who did not know the vehicle in which they were riding was being driven without the owner’s consent.

In ordering the case to trial, Lee said a court should examine whether the exclusion in Alberta’s auto insurance “should be interpreted as intended to provide similar coverage to that provided by the amended Ontario exclusion.”

That was an error, the three judges hearing AMA’s appeal ruled.

“The Alberta legislature can make its own assessment as to whether a similar amendment is appropriate in Alberta,” Judge Peter Costigan of the Alberta Court of Appeal wrote. Concurring were Judges Brian O’Ferrall and Thomas Wakeling.

They all agreed there is nothing ambiguous about the exclusion in Alberta for vehicles driven without the owner’s consent.

“It is normal for insurance policies to contain exclusions and the fact that some claims are thereby removed from coverage does not, in itself, give rise to unfairness. If claims by persons without knowledge are to be covered, the remedy lies with the legislature, not with the courts. As knowledge is not an element of the exclusion on the plain reading of its terms, there is no need for a trial to determine the extent of the respondent’s knowledge,” Costigan wrote.

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