Hunter v. Economical Insurance Group [2004] O.J. No. 5262 Ontario Superior Court of Justice

The trial judge dismissed the plaintiff’s claim for damages arising from a motor vehicle accident because both the insured and the driver had previously signed an endorsement acknowledging that the defendant insurer would not provide coverage while the driver involved in the accident drove any vehicles covered under the policy. There is no ongoing obligation on the insurer to continue to remind an insured after an endorsement excluding certain drivers has been signed but before additional vehicles have been added to the policy, that the excluded driver endorsement remains in effect.

This was a motion for summary judgment brought on by the defendant insurer. The action arose from an all terrain vehicle accident in which the plaintiff’s son sustained injuries and claimed compensation from the plaintiff. The plaintiff subsequently claimed compensation and indemnity from the defendant insurer.

The plaintiff and his son had both signed an O.P.C.F. 28A/Excluded Driver Endorsement in October 1997. That document precluded the plaintiff’s son from operating all vehicles listed on the policy and clearly warned that, except for certain accident benefits under s. 4 of the policy, the defendant insurer would not provide coverage while the plaintiff’s son drove any vehicles covered under the policy.

The policy was renewed annually three times prior to the accident. In April 2000, the plaintiff purchased an all terrain vehicle and had it added to his policy. It was this vehicle that the plaintiff’s son was operating at the time of the accident.

The defendant insurer argued that there was no genuine issue for trial because the plaintiff’s son was clearly an excluded driver. It relied on s. 249 of the Insurance Act, R.S.O. 1990, C. 1.8, which provides that a named insured may stipulate by endorsement to a contract evidenced by a motor vehicle liability policy that a person named in the endorsement is an excluded driver under the contract. It also relied on s. 240 of the Insurance Act which provides that if a motor vehicle liability policy names an excluded driver, the insurer is not liable to any person under the contract for any loss while the person is driving an automobile insured under the contract.

The plaintiff argued that while he knew his son was an excluded driver in 1997, he did not understand that the exclusion was still in effect following the three policy renewals. The plaintiff also argued that there was an ongoing obligation on the insurer to remind him about the continuing driver exclusion. This was because a full three years had passed since both he and his son had executed the excluded driver endorsement and because the plaintiff received no warning from the insurer that the excluded driver provision remained in force after the all terrain vehicle had been added to his automobile policy.

The trial judge held that these arguments raised no genuine issue for trial. The plaintiff and his son contractually agreed with the defendant insurer in 1997 that the son would be considered an excluded driver. The provisions of the endorsement were written in such a way that an average person would be capable of understanding them. There was no evidence that the plaintiff misunderstood any of the terms nor were they time limited. It was clear that the parties intended to and did exclude the plaintiff’s son from coverage.

There is no obligation in law on an insurer to insist on each renewal that a fresh O.P.C.F. 28/A Endorsement form be signed by the insured and the excluded party. Rather, an insured has an obligation to take steps to get the excluded party back on coverage. There is no ongoing obligation on the insurer to continue to remind an insured in these circumstances that the excluded driver endorsement remains in effect. The excluded driver amendments to the Insurance Act indicate that the legislature intended to provide insurers with a broad protection from liability when an excluded driver is driving.

Pilot Insurance Company intervened in the proceedings as the uninsured motorist insurer for the injured party. Pilot argued that the insurer’s contract of insurance includes the policy itself but not endorsements. The trial judge disagreed, finding that s. 1 of the Insurance Act provides that a contract of insurance includes a policy, certificate, receipt or writing evidencing the contract. Furthermore, the trial judge found that inferentially, an insurance contract also includes endorsements to the contract which are a commercially routine and generally accepted method by which the insurance industry operates. Section 224(1) of the Insurance Act clearly provides that "excluded driver" means the person named as an excluded driver in an endorsement under s. 249. In this case, there was never a change to the excluded driver endorsement and at all times the insurance contract included those terms excluding the person named as an excluded driver in the endorsement. At the time of the accident in 2000, the excluded driver endorsement signed in 1997 was clearly in effect.

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