No Underinsured Coverage For Ontario Truck Driver

Article by Brian Sunohara

In Kahlon v. ACE INA Insurance, 2019 ONCA 774, the Ontario Court of Appeal held that a commercial truck driver was not entitled to underinsured coverage from either his personal automobile insurer or a fleet insurer.

Overview

Kahlon was involved in a serious accident in Florida. He had been operating a truck. He stepped out of the truck to see what was causing a traffic delay and was struck by another vehicle. The at-fault driver only had $20,000 in liability insurance.

Kahlon was insured under a personal automobile policy in Ontario with Allstate. The company for which Kahlon was operating the truck had fleet insurance in Ontario with ACE INA.

On a motion, Justice Whitten determined that Allstate was obliged to respond for underinsured coverage and that ACE INA was not required to respond. The Court of Appeal held that neither Allstate, nor ACE INA, was responsible for underinsured coverage.

Purpose of Underinsured Coverage

The purpose of underinsured coverage is to protect an insured who may be involved in an accident with a driver who has low liability insurance limits. The insured’s own insurer must make up the shortfall in damages, up to the insured’s policy limits.

Although underinsured coverage is optional, most personal automobile policies in Ontario have such coverage.

However, expert evidence showed that commercial fleet insurers in Ontario have not offered underinsured coverage in respect of heavy commercial vehicles for around 15 years. They stopped doing so because of the increased risk posed by truck fleets travelling into the United States. Many drivers in the United States have very low liability insurance limits.

OPCF 44R Endorsement

In Ontario, the OPCF 44R endorsement governs underinsured coverage.

Section 22 of the OPCF 44R endorsement states: “Except as otherwise provided in this change form, all limits, terms, conditions, provisions, definitions and exclusions of the policy shall have full force and effect”.

Therefore, the conditions in the Ontario Automobile Policy (OAP 1) are applicable to underinsured coverage.

Section 2.2.3 of the OAP 1 provides that, if an insured is driving a vehicle not described on the policy, that vehicle must not have a gross vehicle weight rating of more than 4,500 kilograms.

In other words, the OAP 1 excludes coverage for heavy commercial vehicles.

Court of Appeal’s Decision

Since Kahlon was operating a heavy commercial vehicle, the Court of Appeal said that he was not entitled to underinsured coverage from Allstate.

Further, underinsured coverage was not available under ACE INA’s fleet policy because that policy contained an endorsement which restricted such coverage.

Specifically, the endorsement provided that underinsured coverage was only available when the driver was operating a private passenger vehicle or light commercial vehicle, not a heavy commercial vehicle.

The endorsement was held to be applicable even though it was not in an approved form.

Conclusion

No underinsured coverage whatsoever was available to the plaintiff. Since the plaintiff sustained serious injuries, there will likely be a shortfall in his recovery of damages, unless the at-fault driver has sufficient assets to personally satisfy a judgment.

The Court of Appeal found this to be an unfortunate, but necessary, result, noting that “this outcome follows from the decision of the provincial government many years ago not to make underinsurance coverage mandatory”.

The Court of Appeal concluded: “courts have no authority to simply override contractual language in order to force the provision of coverage where none is contemplated by the existing language of the insurance policy and the endorsement, just because they might consider it good public policy to do so. This is the business of the provincial government, not the courts”.

Rogers Partners LLP is an experienced civil litigation firm in Toronto, Ontario. The firm represents insurers and self-insured companies in numerous areas, including motor vehicle negligence, occupiers’ liability, product liability, professional negligence, construction claims, statutory accident benefits, disability benefits, municipal liability, medical negligence, sexual abuse, and insurance coverage disputes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Driving With Vision Obstructed

Frosty Car WindshieldI carry a handicap parking permit. When I was first issued this permit an outline of my responsibilities said that I was to remove it from the rear view mirror while driving “…as it is against the law to drive with the Permit hanging (obstructed vision).” I see often see permit holders driving with their permits hanging from the rear view mirror, so this rule is obviously not being enforced. A mention in your column may help remind drivers of their legal responsibility in this regard.

Thanks for yet another great topic suggestion, and one that is timely for another reason entirely.

Fully 80 percent of the information that we need to drive safely comes through our eyes. Anything that keeps that information from reaching us is a concern.

The law says that you must not move your vehicle on a highway when the driver’s view to the front or to the sides is obstructed. Obstructions may range from the parking permit or other object dangling from the rearview mirror that this reader mentions.

Driving with only a small spot of frost scraped away or removed by the defrosters is what came to my mind as I always found drivers peeking through the small half circle of glass cleared by the defrosters during the first few frosts of the year. Receiving a ticket and then having to scrape or wait before continuing is not a good way to start the day.

A traffic ticket for a violation of section 195(1)(b) MVA costs $109 and 3 penalty points.

I have the luxury of parking my vehicle in my garage so I don’t have to scrape my windows at the beginning of my trip, but I may have to park outside at my destination. Most of the time I just use my snow brush and ice scraper to clean ALL the windows before I drive away, but with a little preparation that task can be made quicker and easier.

Covering the windshield with anything that keeps moisture away from it will prevent frost from forming on the outside. A tarp, blanket, towel or even cardboard will help reduce the work.

There are commercial de-icing sprays, but you can save a significant amount of money by making your own. Find a suitable spray bottle and fill it with a mixture of 2/3 70% isopropyl alcohol and 1/3 water. Spray it on, wait a few moments and all that scraping is no longer necessary.

Your spray can be stored in the vehicle as it will not freeze in most areas of our province.

Hydrophobic glass treatments may help by making it harder for the ice to stick in the first place.

While we are on the topic of vision and changes in the weather, this would be a great time to check some other vehicle components as well. Is your windshield washer topped up with the correct cleaner, are your wiper blades supple and undamaged and is your scraper at hand?

One final mention is something that I learned while researching this topic. Leaving your windshield wipers pulled back from the windshield at the end of each trip will prevent damage to the wiping edge. Your wipers will last longer and clean your windshield without streaks.

Better to be ready to cope than it is to take chances with your safety and the safety of those who have to share the road with you.

B.C. teen forced to pay annual ICBC bill worth three times the cost of her car

BY AND

A 19-year-old Cranbrook resident is the latest to speak out about skyrocketing ICBC rates for young drivers.

Jade Sharp says she needs her car for college and work, but she fears she can’t afford it anymore. Insurance on her car has skyrocketed, with the monthly bill up almost 40 percent.

“I used to pay $180 and now it’s $250,” Sharp said. “It’s completely outrageous.”

When calculated annually, Sharp’s bill comes to roughly $3,000 — three times what she paid for her used car.

The teen says she’s been driving for almost four years and is accident-free. But under ICBC’s new rate structure, that record no longer counts towards an experience discount.

Sharp’s mother Amanda Riddell is calling ICBC’s revamped model “selfish.”

Sharp is the latest B.C. teen to come forward saying they’re being unfairly punished by ICBC for their relative lack of experience.

BC Liberal critic for ICBC Jas Johal has criticized the province for the rate changes, and said this latest case represents a larger problem.

“They’re starting out their lives, they’re going to school, part-time jobs, and now in this case they get hit with a $3,000 insurance bill for a car that’s worth $1,000?” he said. “This is ridiculous.”

ICBC is continuing to defend its rates, noting younger drivers are three-and-a-half times more likely to cause a crash.

Spokesperson Joanna Linsangan says there are ways for those young drivers to save money, particularly if their vehicles are of lower value.

“For some people who do have low value vehicles, one thing that many do consider is dropping collision coverage,” Linsangan said.

ICBC’s president and the province have said they are continuing to work towards making auto insurance less expensive for everyone, including younger drivers.

Sharp says she’ll keep struggling to pay her new monthly rate, but she’s not sure how much longer she can keep it up.

“Just because there’s a few young drivers or older drivers who aren’t the greatest at driving, or being safe at driving, it doesn’t mean I deserve to be punished for that,” Sharp said.

Source: Global News

“The best advice I can give on getting the best rate is, be a safe driver,” said Pete Karageorgos, head of consumer and industry relations at the Insurance Bureau of Canada.

Read more

The state of aviation insurance in Canada

by Sandy Odebunmi | skies

All aviation operations across Canada are likely to be affected whether they are a commercial or private aircraft owner, manufacturer, distributor, or maintenance organization.

A hard market is caused by a number of contributing factors that include falling investment rates, increases in fraudulent claims and larger global losses. In Canadian aviation insurance there are even more aspects to the changing market. The number of available insurers coupled with the weather, the value of the Canadian dollar, and the severity of losses all play their part.

All aviation insurers licensed to write in Canada are re-insured by global companies. A catastrophe across the world may not even make it into Canada’s news cycle, but the same re-insurers covering your operation might also be on the hook for a downed A320.

Canada is particularly susceptible to bad weather claims. A severe ice storm in Manitoba could lead to higher aircraft premiums across the country the following year.

The recent, and increasingly severe, aircraft claims have led to several insurers re-evaluating their underwriting practices and rate structure.

We are now coming off a long soft market where we had more insurers and lower rates.

As the losses accumulated over the last several years, some unprofitable insurers pulled out of the market. The remaining companies are forced to increase their rates in order cover all their claims and to regain profitability.

How does all of this affect Canadian aviation operators and aircraft owners?

For starters, you may see increases in your premiums, anywhere from five per cent to 40 per cent or higher, for large and small policies alike. You may see your deductibles increase and some fringe coverages, like lay-up and renewal credits, removed.

You might experience longer wait times to get answers back from your broker. With rates increasing, everything is being shopped and the marketplace is flooded with new requests, creating an overload on the same few underwriters.

In the absolute worst cases you may find your existing insurance companies declining to offer renewal.

Even if you are one of the lucky ones and your increase is minimal, it’s vital to work with an insurance broker who specializes in aviation. If your operation is insured with a broker just because they are your friend or they got you a good deal on your home insurance, they may not be aware of current aviation market trends and concerns.

An aviation insurance broker will have the knowledge and experience required to asses your risk. They will have a good idea of the going rates, required coverages, and the most favourable terms and conditions for you.

The best thing you can do is give your broker at least 60 days to negotiate your terms. By starting with plenty of time ahead of renewal they’ll be able to take your policy to all appropriate insurance companies and get you the best quotations.

Providing full information is imperative for large and small operators alike.

Be sure to mention any safety systems installed on your aircraft and don’t be afraid to highlight your safety management systems and what you do that’s over and above the norm.

You may also wish to pay particular attention to risk mitigating practices put into place after any claims you have experienced. It’s sometimes easy to forget what happened eight or 10 months ago, so an annual review with your broker is advantageous.

Read your policy and arm yourself with the knowledge to understand the quotations and remarks being provided to you. I am always impressed with those clients who read and ask questions.

Work with your broker to consider new methods of handling your risk. A good aviation broker can also help you calculate your self-insured retention appetite and other risk management cost saving methods. This may be the year to get creative with your insurance portfolio.

While it’s impossible to know exactly when a hard market will soften, with the increasing cost of claims we can assume it won’t be any time soon. Rates may never again be as low as they once were.

So please remember — read your policy, start your renewal early and consult with a knowledgeable aviation broker.

Supreme Court agrees auto insurance companies can’t retroactively rescind contracts

ING Insurance rescinded policy of man whose car collided with UWindsor student

CBC News

Canada’s highest court has upheld a lower court’s ruling that auto insurance providers can’t retroactively rescind insurance policies without just cause and at least 15 days notice.

In September 2002, Karla Merino — who was a student at the University of Windsor — was hit and injured by a man who was drunk while driving. She was 22 at the time.

A financial settlement was denied to the Merino family because the driver wasn’t insured during the accident.

Intact Insurance — previously operating as ING Insurance  — claimed that problems with information disclosed on thd driver’s insurance application meant the company had the right to rescind the policy.

According to the insurance company, the driver’s spouse — who hadn’t signed the policy — failed to accurately disclose her driving history.

As a result, the insurance company rescinded the driver’s policy without providing 15 days notice as per law, determining that the failure to disclose the spouse’s driving history meant the agreement between the driver and the company was never made.

In 2017, a Windsor judge ruled in favour of the insurance company, a decision which the Merino family later appealed.

The Court of Appeals for Ontario overturned the initial decision in April 2019, determining that auto insurers in Ontario can’t retroactively rescind a contract.

Additionally, the Appeals Court ruled that the insurance company’s failure to provide the driver with at least 15 days notice of the contract’s termination meant the contract wasn’t legally terminated.

“The contract therefore remained in effect on the date of the accident,” reads an excerpt from the April 2019 decision.

That decision led the insurance company to file an appeal with the Supreme Court of Canada (SCC).

The SCC upheld the Ontario Appeals Court’s decision Thursday, dismissing the insurance company’s appeal.

“I think this insurer and all insurers are going to read this decision today, as they read the appeal decision in April, and I hope reasonable underwriters and reasonable auto insurers and their executives will take to heart what the law now says, and this won’t happen again,” said Donald Leschied, Karla Merino’s attorney.

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