Third Party Notice Issued Against Renter of Vehicle Required Renter’s Insurer to Respond First

Third party notice issued by owner of motor vehicle against renter was sufficient to require insurer of renter to respond first to claim arising out of a motor vehicle accident, notwithstanding that the plaintiff only named the owner as a defendant.

Elias v. Koochek, [2014] O.J. No. 4125, September 8, 2014, Ontario Superior Court of Justice, S.E. Firestone J.

Following a motor vehicle accident and a dispute between insurers as to which insurer was required to respond first, the Court was asked to determine the priority of insurance under s. 277(1.1) of the Insurance Act of Ontario. The dispute arose between the insurer of a named defendant in the main action, the owner of the vehicle involved in the subject motor vehicle accident, and the insurer of a third party, the renter of the defendant’s vehicle who was not a named defendant in the main action.

The decision turned on the question of whether other insurance was “available”. The Court held that a renter’s policy is available once there is a liability claim arising against the renter out of a collision. A third party claim by the owner of the vehicle satisfies this requirement. Accordingly, the insurer of the renter was required to respond first to the plaintiff’s claim.

This case was originally summarized by Cameron B. Elder, and originally edited by David W. Pilley of Harper Grey LLP.

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