The Insurer who issued an OPCF 44R Family Protection Coverage to the Insureds was required to respond to the claims of the injured passengers in a motor vehicle, despite the fact that the driver was contributorily negligent in causing injury to one of the passengers

Gostick v. Squance, [2006] O.J. No. 2586, Ontario Superior Court of Justice

This action was the result of a motor vehicle accident. The Insured was driving and owned the car; her husband and two sons were passengers. All were seriously injured. The driver of the other vehicle involved in the accident was intoxicated, uninsured, and entirely at fault. However, one of the passengers, Travis Gostick, was not wearing his seatbelt and the driver was negligent in not ensuring he was properly secured. She was therefore jointly liable with the driver of the oncoming car for his injuries.

The Insured’s vehicle was insured under a standard automobile insurance policy issued by Royal & Sun Alliance Insurance Company of Canada. The policy had a third party limit of $1,000,000. The driver had paid an additional premium to obtain the OPCF 44R Family Protection Coverage endorsement with a limit of $1,000,000. The policy also contained a provision that said the maximum liability was the amount by which the limit of family protection coverage exceeded the total of all limits of motor vehicle insurance of the inadequately insured motorist and any other person jointly liable with that motorist.

The Insurer submitted that because the driver was jointly liable for Travis Gostick’s damages, and the third party liability limits were being paid to him, no payment was available under the Family Protection Coverage. It argued that if payment were available, that would result in a total recovery for family members of $2,000,000 in spite of the family having chosen to purchase only $1,000,000 of coverage.

The Court applied the ruling in Craig v. Allstate Insurance Co. of Canada, [2002] O.J. No. 2124, and held that the Family Protection Coverage attached because: (1) the Plaintiffs could have no resort to Ms. Morrison’s third party liability coverage; (2) the Plaintiffs were in the category of those to whom the endorsement was designed to give relief, that is, those injured by default exclusively of an inadequately insured driver; and (3) the words of the endorsement did not require or invite interpretation contrary to the intention of the endorsement.

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