An insurer may bring a subrogated claim for insurance proceeds paid to compensate damage to a camper trailer if the trailer is not insured under a motor vehicle policy

The Court granted the Plaintiff’s motion on a determination of a question of law after finding that the Plaintiff was not barred by s. 263 of the Insurance Act from advancing a subrogated claim against the Defendant for damages sustained to the Plaintiff’s Camper Trailer, which was not insured by a motor vehicle liability policy while it was being towed.

Lange v. 882819 Ontario Ltd. (c.o.b. Morrice Trans. Ltd.), [2006] O.J. No. 5468, Ontario Superior Court of Justice, B.T. Granger J., September 15, 2006

This was a motion by the Plaintiff, Mr. Lange, for a determination of a question of law pursuant to Rule 21.01(a). The question was whether the Plaintiff had a right of subrogation against the Defendant, Mr. Mann, for damages sustained to his camper trailer (the “Camper Trailer”) and its contents. The parties were involved in a motor vehicle accident in which the Defendant collided with the Plaintiff who was towing his Camper Trailer.

The damage to the Plaintiff’s truck was paid under a motor vehicle liability policy; however, the damage to the Camper Trailer and its contents was paid under a Holiday Trailer/Park Model policy which is not a motor vehicle liability policy within the meaning of the Insurance Act (the “Act”). Section 278 of the Act provides that if an insurer makes any payment under a contract of insurance, it is subrogated to all rights of recovery of the insured against any person and may bring an action in the name of the insured to enforce those rights. The Camper Trailer was an “automobile” as defined by the Act and as such, the direct compensation provisions of the Act applied. Section 263(5)(b) of the Act eliminates the right of subrogation for payments made to a party insured under the direct compensation section but does not eliminate the right of subrogation for payments made to an insured pursuant to a policy of insurance other than a motor vehicle liability policy.

The Court found that because the Holiday Trailer/Park policy under which the damage to the contents of Mr. Lange’s Camper Trailer was paid, was not a motor vehicle liability policy, the Plaintiff’s Insurer was not barred by s. 263 of the Act from advancing a subrogated claim arising out of such damages.

This case was originally summarized by Steve Vorbrodt and originally edited by David W. Pilley.

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