G1 Defendant Provided Coverage
There are many reasons why an insurance company will deny coverage to its customer the insured. Often this happens in drinking and driving cases or other violations that contravene the terms of the insurance policy. When an insurance company denies coverage it will only cover any claim for damages up to $200,000. Therefore, if you are being sued for a million dollars which is usually the case, you as the insured will be responsible for anything above that.
Shah v. Becamon 94 O.R. (3d) 297 is a recent case decided by the Ontario Court of Appeal where the insurer Wawanesa denied coverage to its insured i.e, the Defendant. The Defendant, Becamon held a valid G1 license which required a driver of at least four years to accompany her. However, Becamon decided to take the car on her own. She ended up hitting a pedestrian, Shah in the parking lot at Bathurst and Wilson.
She pled guilty to the Highway Traffic Act charge and paid a small fine. However, in the Plaintiff's civil case Wawanesa the insurer denied coverage. At trial, the Judge used the principals of fairness to ensure that Becamon be afforded full coverage by her insurance company. The trial Judge reasoned that, the strip mall parking lot did not constitute a highway as defined by the Act. Therefore, the Defendant was not in contravention of the insurance policy specifically the wording authorized by law:
4(1) The insured shall not drive or operate or permit any other person to drive or operate the automobile unless the insured or other person is authorized by law to drive or operate it.
The Ontario Court of Appeal accepted this position.
Furthermore, Wawanesa also argued that based on the fact the Defendant, Becamon pled guilty to the two offences this meant she was not authorized by law to drive the vehicle. The trial Judge did not accept this position and neither did the Court of Appeal. The trial Judge provided reasons for his decision but it seems ultimately the crux of the issue rested on the fact that:
On the other hand, the stakes in the present civil action, which will probably be long, complex and costly, are much greater -- compensation potentially in the hundreds of thousands of dollars for an innocent pedestrian. In my view, this dichotomy of process and consequences suggests that, in the words of Arbour J. in C.U.P.E. , "fairness dictates that the original result should not be binding in the new context".
In conclusion, it seems that both courts used the principals of fairness to ensure that the Defendant was provided full coverage. At the end of the day, if the Defendant was not provided full coverage she would face grave financial consequences. In addition, the Plaintiff would probably have a difficult time in collecting anything above $200,000 from his civil suit.
It is important to always ensure you understand your policy and anything that can lead to a breach of the policy. Clarify issues with your broker and keep records of your discussion.
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