Concealing a leased vehicle could void the insurance

The client of an Insured did not conceal her vehicle from the Insurer when she parked it several blocks from her residence in order to avoid repossession.

MFI Mobil Finance (2006) Inc. v. Insurance Corp. of British Columbia, [2009] B.C.J. No. 1009, April 14, 2009, British Columbia Provincial Court, S.D. Dley Prov. Ct. J.

The Insured sought indemnity from the Insurer for the value of an insured vehicle. The Insured was in the business of providing lease financing for credit challenged clients. In order to reduce the risk of non-payment, the Insured installed an immobilizer that was hardwired to the ignition system and was activated upon non-payment. One of the Insured’s clients had leased the vehicle in question. When she failed to make the lease payments by the date required, the Insured activated the immobilizer. The Insured’s client had parked the vehicle several blocks from her residence in order to avoid repossession and to buy her some time to make payments. Several weeks after the immobilizer was activated, she noticed that the car was missing and she called the police. The vehicle was never located. The Insurer alleged that the client had concealed the vehicle.

The Court found that the client had not abandoned the vehicle. Her clothes and supplies were still in the car. The Court accepted her evidence that she had parked the car in an effort to avoid repossession and to buy some time. The Court found that, at most, she had concealed it from the Insured but not from the Insurer.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.

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