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Determining Insurer Liability: A Borrowed Car

In the recent decision, Tokio Marine & Nichido Insurance Company v. Security National Insurance Company, 2019 ABQB 622, the Alberta Court of Queen’s Bench (the “Court“) heard an appeal of a Master’s of an application for an order declaring that another insurer had a duty to defend a motorist involved in an accident. This is an important decision for insurers as it provides an examination of a unique factual scenario where there was overlapping insurance coverage.

The Facts

On June 4, 2016, Ms. Sran drove a vehicle owned by Mr. Gill (the “Gill Vehicle“), to an Acura dealership in Calgary, Alberta (the “Dealership“), for servicing. Ms. Sran was not a named insured under Mr. Gill’s insurance policy, and was not his spouse, however, she did have permission to take the Gill Vehicle, and had been informed by Mr. Gill that the Dealership would provide her with a courtesy car. After signing an agreement with the Dealership (the “Agreement“), Ms. Sran was given a courtesy car (the “Courtesy Car“), and left the Dealership.

While Ms. Sran was operating the Courtesy Car she collided with a skateboarder (the “Skateboarder“).

The Gill Vehicle was insured by Security National Insurance Company (“SNIC“), and the Courtesy Car was insured by Tokio Marine & Nichido Insurance Company Limited (“Tokio Marine“). Tokio Marine sought an order declaring that SNIC was required to defend Ms. Sran in the action commenced by the Skateboarder. Tokio Marine’s application was denied by a Master, who found that SNIC did not have to defend the claim. In this case, Tokio Marine was seeking to have the Master’s decision overturned, on the basis that Mr. Gill gave his consent for Ms. Sran to drive the Gill Vehicle, and that consent transferred to the Car.

Additionally, a term of the Agreement stated that Ms. Sran, as the signatory, would be liable for any damage to the Courtesy Car, and that Ms. .Sran’s insurance would be the primary carrier in the event of any loss.

The Decision of the Court

Justice Fraser agreed with the previous decision from the Master, and held that SNIC did not have to defend the action brought by the Skateboarder, and that Tokio Marine would be responsible for defending the action. Justice Fraser stated that while there was an understanding between Mr. Gill and Ms. Sran that the Gill Vehicle would be left at the Dealership for servicing, and that Ms. Sran would have a courtesy vehicle, that understanding could not be extended to the other parties involved.

Moreover, Ms. Sran agreed to a number of conditions when she signed the Agreement prior to using the Car, and there was nothing to demonstrate that Mr. Gill ever agreed to any of the terms, or that he even knew about them. Mr. Gill was not the owner of the Courtesy Car, and as a third party with no interest in the Courtesy Car, the Court simply was not able to find that he had the ability to give consent to anyone to drive it, despite the fact that he likely expected that a Courtesy Car would be provided.

In its submissions to the Court, Tokio Marine also argued that pursuant to the Miscellaneous Insurance Provisions Regulation, Alta Reg 120/2001, the Courtesy Car should be considered a rental vehicle, which would result in a priority flip for the insurers in regards to primary responsibility for defending any claims. The Court also found this argument lacking, as the Dealership clearly did not fall under the definition or a lessor or renter, as defined in the Traffic Safety Act, RSA 2000, c T-6.

The Take-Away

This decision provides clarity for interpreting insurance policies in a unique factual scenario that all stakeholders involved in priority dispute should be familiar with. Specifically, this decision serves as a reminder that situations that feature overlapping insurance policies can be reconciled by a plain language reading of their terms.

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Source: Mondaq News

Sufficient insurance key to recovery in the event of environmental disasters

The Canadian Press

The Fort McMurray wildfire in May 2016 destroyed almost 2,600 homes and resulted in many tales of hardship but Rob de Pruis says one man’s “heart-breaking” story stands out for him.

The director of consumer and industry relations, western, for the Insurance Bureau of Canada, was stationed in the northern Alberta community for a year after the fire forced the temporary evacuation of more than 80,000 people.

At an event to help people with their insurance claims, a man who was nearing retirement age asked for advice, explaining his single-family home had burned to the ground.

“He said, ‘Well, I just paid off my mortgage, my mortgage company did not require me to have property insurance anymore, so I cancelled my property insurance, thinking that was the right thing to do,”’ de Pruis recalled.

The man was left with clear title to a residential lot full of charred debris. With no insurance, there was nothing the bureau could do.

“I heard a couple of years later that he sold the land and moved away to a community that was less costly for him,” said de Pruis. “It was just a bad memory.”

This spring’s wildfires in northern Alberta, floods in Quebec, Ontario and New Brunswick and fears of a third year of unusually intense forest fires in B.C. serve as a reminder that disaster can strike at any time and in unexpected ways.

The highest insured property loss in a year was $5.0 billion in 2016, with $3.7 billion of that the result of the Fort McMurray wildfire which resulted in about 60,000 claims, the Insurance Bureau says.

In the year 2013, the second-highest losses of $3.2 billion were recorded, including $1.6 billion as a result of floods in southern Alberta that destroyed parts of downtown Calgary, and about $1 billion as a result of a summer storm and flooding in Toronto. A big winter storm that hit southern Ontario and parts of Eastern Canada also padded the total.

“People realize too late what their insurance policy covers,” said de Pruis.

“When they lose everything, they realize the limit they chose to cover their stuff may not be enough to purchase all of their stuff again.”

Her level of insurance was the last thing on her mind as Jen Skinner, 37, and her husband and toddler son ran to their vehicle to escape the approaching Fort McMurray wildfire three years ago.

“The pieces of ash falling down were unreal, the size of my hand, and I ran in the house and told my husband, ‘Get garbage bags, throw clothes in the bags and we’re going,”’ she said.

“We left so fast we had to pull over on the side of the highway to determine where we were going to go.”

She said she was surprised the house was still standing when they returned but the siding was melted in places and the interior contaminated by smoke and toxins.

They wound up spending six months away from home and replacing almost every piece of furniture and every child’s toy. Their insurance claim still hasn’t been finalized but is expected to come in at more than $200,000.

As a mortgage broker, Skinner knew a lot about insuring property but her experience as a claimant taught her some new lessons.

“One thing I’d recommend is make sure you have everything in email, do not take anything verbal over the phone,” she said, adding she dealt with six different insurance company claims adjusters.

“I had one adjuster tell me to throw away all of my kid’s toys, anything that was plastic that might have absorbed the toxins, so I did that. And then the next adjuster said, ‘No, we’re going to clean this.”’

The Skinners had enough insurance to cover their expenses while their home was cleaned and repaired but she says many of her friends and neighbours ran out and had to pay their own way.

Another tip is to regularly take pictures or videos of the contents of the house because the insurance company will want a list of everything that needs to be replaced, she said.

Not all policyholders realize the difference between replacement cost and cash value insurance policies, de Pruis said. While choosing the latter will likely result in lower premiums, it could leave you short when replacing your property.

Most residential insurance policies provide coverage for fire damage, expenses in the event of a mandatory evacuation and compensation if a power outage damages appliances or their contents, he added.

Extra insurance should be considered for overland flooding — now available almost everywhere in Canada after being difficult to find five years ago — and sewer backup, along with special insurance for items such as jewelry, stamp or art collections.

Most Canadians have heard of the Fort McMurray wildfire but don’t know about a flash flood a few months later that overwhelmed the sewer system and damaged homes in higher-elevation neighbourhoods, de Pruis said.

“Even if you don’t live beside a lake or a river, you still could be subject to flooding,” he warned.

Hail damage the worst in Alberta compared to all other Canadian provinces: AMA

The excerpted article was written b

Experts warn to brace for summer storms in Alberta, which sees more insured losses than all the other provinces combined.

AMA insurance experts have compiled numbers from insurance providers across the province and said 51 percent of all storm-related damage in Canada since 2010 has occurred in Alberta.

Vishnu Singh with AMA said people need to protect their vehicles and their property when a storm hits.

“You want to make sure you go underground or find a parkade,” Singh said. “The kinds of expenses to a vehicle is, on average, $5,000 for a hail claim for vehicles.”

The growing cost of damages is leaving a big dent in the bottom line for car dealerships. For many, it was no longer feasible to leave their inventory so vulnerable. Many have invested in protective shields.

T&T Honda in Calgary’s northeast spent just over $1 million to install six tents.

A car lot in Calgary has invested $500,000 for three tents to act as protective shields from hail.

The dealership’s general manager, Navroz Jessani, said they were left with no choice.

“We had to do something to mitigate that risk as well as keep insured,” Jessani said. “We got hit with a massive hailstorm in August 2012, and there was a significant amount of damage and getting insurance after that point became more and more difficult for us.

AMA released more statistics that reveal 66 percent of Canada’s major hail storms happen in Alberta — the most severe to date was in August 2010, causing nearly $400 million in damages.

Ways to prevent summer storm damage include parking your vehicle in a garage or under a covered structure and tying down lawn furniture. The most important thing, according to the AMA, is to know when severe weather is on the way, advising people to get weather alerts on their phones.

Edited for ILSTV

EI program changes leave hundreds of post-secondary students without funds

Intent of the Fast Forward education program isn’t funding full-time students, province says

Mairin Prentiss · CBC News

Many post-secondary students in Nova Scotia are scrambling to find enough money to go back to school in the fall after the federal government requested a change to a program that allows people to draw employment insurance benefits while studying.

Students in the province’s Fast Forward education program don’t have to look for work while on EI, and can instead enrol in approved programs to update their skills and training.

“I’m extremely devastated by the news, me and along with all the students I know, because a lot of us really depended on this money when we go back to school,” said Jacqueline McNeil, a science student at Université Sainte-Anne.

Employment and Social Development Canada is now requiring participants to have been in the workforce for at least 24 months, which excludes hundreds of students from accessing the program.

Under the new rule, the province anticipates 540 students will no longer be eligible ⁠— a 30 per cent reduction of the over 1,800 people who benefited from the program in Nova Scotia last school year.

Study part time or take a year off?

Without the additional funding, some students are considering reducing their course load to part time or taking a year off to save enough money to continue their programs.

In addition to her student loan, McNeil was able to draw the EI she accumulated from summer jobs to help cover her rent and expenses while she lives in Church Point, N.S., during the school year.

Now, she’s no longer eligible.

‘No other option’

She plans to try to save enough money this summer to remain a full-time student.

“If I end up running out of money and the student loan can’t cover [the balance], I’m going to have to switch from full-time schooling to part-time schooling because I’ll have no other option,” said McNeil from her Sydney home.

“It’s pretty awful honestly. I don’t think it’s right. I think if you can apply for EI and get unemployment, we should still have access to these benefits. It’s money that we earned.”

The province’s Department of Labour and Advanced Education said the federal government asked that the program’s intention be changed to ensure applicants are unemployed workers taking training during a period of unemployment.

“The program is not intended to fund full-time students,” said department spokesperson Shannon Kerr.

Before the change, Fast Forward criteria permitted people who have been out of high school for a minimum of 12 months to access the program as long as they qualified for EI, said Kerr.

The criteria for new applicants came into effect on June 7. Some current applicants will be able to continue in the program until the end of the year.

Program changes

Summer or part-time employment for people enrolled in full-time school does not count toward the 24 required months.

Employment and Social Development Canada did not say how many programs across the country the change affects.

They also did not say the reason behind the change.

Nova Scotia’s program launched in 2015. Changes to EI eligibility the following year allowed students working in the summer months to access the program, said Kerr.

Dalhousie engineering student Allen Cox doesn’t know if he’ll again be eligible to use the program.

The sudden change has left him in the lurch as he considers whether he’ll need to take a year off school to earn money.

“A year’s not the end of the world, but it wasn’t my plan,” said Cox, who used the program for the spring term once he heard about it.

Participants were notified of the change by letter on June 10.

Short notice

Cox said with school resuming in September, that “isn’t very much time to come up with money you thought you had available.”

Had the rules not changed, he estimated he would have been able to draw around $10,000 of EI in the upcoming year — a larger sum than most full-time students would earn because of his program’s four-month-long work terms.

Roughly half of his class of about 80 people are enrolled in the program, he said.

“There’s a lot of students in my degree worried about it,” said Cox.

Pedestrian crossing flags taken down after City dismisses insurance company’s road safety plan

The excerpted article was written by Natalie Johnson, CTV News Toronto 

Aviva Insurance has removed the bright yellow flags it had placed at busy intersections across Toronto, after the city said the road safety campaign was unsanctioned and unproven.

The company had installed the flags to allow pedestrians to be more visible to drivers while crossing the street and had planned to reveal the plan Thursday, but had not cleared the initiative with the city.

“We support Aviva Canada’s efforts in enhancing road safety in Toronto, but permission was not sought from the City of Toronto before affixing flags to city-owned poles at crosswalk intersections,” said City of Toronto spokesperson Brad Ross.

“Any organization that wishes to share proposals with the city to improve the livability of residents and visitors must do so through due process.”

The flags were placed at several intersections the company deemed dangerous, including Bathurst and Nina streets.

Teachers from nearby Hillcrest Community School were seen using the pedestrian flags at that crossing Wednesday; many local residents told CTV Toronto the intersection was dangerous.

“It’s a little scary,” said Daniel Bogue. “People are really scrambling to get through this intersection.”

A bucket holding the flags at the crosswalk had read “each one of these tech enabled flags automatically tells city council how this road could be safer.”

But Aviva would not reveal ahead of the Thursday launch whether the flags contained sensors or data trackers.

Mayor John Tory said he believed Aviva meant well, but that the city could not condone a “patchwork” plan.

“We are going to solve it by changing behaviour and by an organized, determined city program that will make the streets and intersections of the city safer – that includes automated speed enforcement, it includes more red light cameras, it includes street design and it includes speed limits.”

Janis McCulloch, a spokesperson for Aviva Canada, said the company “respects the guidance from the City of Toronto and their request to remove the flags.”

“Raising awareness and starting a conversation around road safety was our primary intention, and continues to be the objective of the Take Back Our Roads platform,” she said. “We are in active conversation with them and look forward to working together on future initiatives to improve road safety for Canadians.”

The City of Toronto said that there was no evidence pedestrian flags increased driver compliance at crosswalks. The City of Seattle recently abandoned a similar initiative after finding that it was not effective.

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