Transportation Lease Systems Inc. v. Guarantee Co. of North America,  O.J. No. 5237, Ontario Superior Court of Justice
The Plaintiff Lessor leased a vehicle to the Lessee. The lease required the Lessee to maintain insurance coverage, including collision coverage, on the vehicle. The Defendant Insurer insured the vehicle, naming the Plaintiff Lessor and the Lessee as the Insureds. In January 2002, the Lessee cancelled all coverage on the vehicle with the exception of fire and theft, since the car was being stored for the winter. By letter received February 11, 2002, the Insurer advised the Lessor of the insurance coverage which had been deleted from the policy effective January 8, 2002. On February 21, 2002, the Lessee operated the vehicle without reinstating the deleted coverages and was involved in an accident causing damages of approximately $38,000. The Insurer subsequently denied the Lessor’s claim. The Lessor asserted that the Insurer was required to give 15 days’ notice of any change in insurance coverage under the statutory conditions. However, the court held that proper notice was given to the Lessor on February 11, 2002 and this notice was in accord with legislative requirements which did not require 15 days’ notice. The court noted that upon receipt of the letter, the Lessor failed to take immediate steps to protect its interest in the vehicle, such as requesting a lien holder’s interest. The Lessor’s action was therefore dismissed.
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