An insurer cannot bring a subrogated claim against an insured's family member.
The Court held that a travel Insurer ("RBC Travel") did not have a right to bring a subrogated claim in the name of an Insured against the Insured's husband where the husband was also insured under the policy.
Kerr v. Kerr, [2009] N.S.J. No. 63, January 29, 2009, Nova Scotia Supreme Court, G.R.P. Moir J.
Kerr and his wife applied jointly for Royal Bank Visa cards. The cards were issued to them under a single cardholder agreement. The arrangement with the Royal Bank entitled the couple to medical and travel insurance. Kerr's wife was injured in a motor vehicle accident in Florida. She was a passenger in a car that was driven by Kerr. Her medical expenses amounted to $120,372 and were covered under the travel insurance policy issued by RBC Travel under the arrangement relating to the Royal Bank Visa cards obtained by Kerr and his wife. A subrogated Action was brought in the name of Kerr's wife by RBC Travel against Kerr to recover the medical expenses. Kerr applied to the Court to dispute RBC Travel's right to bring the subrogated claim.
The Court allowed Kerr's Application holding that RBC Travel was not subrogated to the wife's claim against Kerr and did not have a right to prosecute this Action. The Court held that an insurer's right of subrogation was an equitable right that derived form the suretyship that was created by the policy. The policy applied the law of Ontario, which negated the right of subrogation. In the alternative, the Court held that Kerr was also insured under the same policy and there could be no equitable subrogation as against an insured under the same policy.
This case was originally summarized by Jonathan D. Meadows and originally edited by David W. Pilley.
