No uninsured motorist coverage for passenger in stolen vehicle

Insurance law – Automobile insurance – Exclusions – Theft of vehicle – Passengers – Uninsured motorist – Statutory provisions

Burnham v. Co-Operators General Insurance Co., [2022] O.J. No. 3822, 2022 ONSC 4934, Ontario Superior Court of Justice, August 29, 2022, A.J. Goodman J.

The plaintiff was a passenger in a stolen vehicle and was seriously injured in a motor vehicle accident that killed the driver. The plaintiff sought coverage under the vehicle owner’s motor vehicle policy. The insurer for the vehicle brought an application under Rule 21.01(1) of the Ontario Rules of Civil Procedure for an order dismissing the coverage action on the basis that it was excluded from coverage under s.1.8.2 of the Standard Ontario Insurance Policy because the vehicle was used or operated without the owner’s consent.

The plaintiff argued that the coverage would only be excluded under s.1.8.2 if he knew or ought reasonably to have known that the vehicle was used or operated without the owner’s consent. In this case, the plaintiff said he was asleep in the backseat of the vehicle and had no reason to believe the vehicle was stolen at the time of the accident. The insurer argued that s.1.8.2 ought to be read disjunctively as three independent exclusion clauses and that the know or ought reasonably to know clause did not apply in the circumstances.

The court agreed with the insurer. It held that s.1.8.2 was to be read disjunctively and that the know or ought reasonably to know clause only applied to situations where the insured person was claiming under their own policy. In this case, the plaintiff claimed against the owner’s motor vehicle policy, there was no dispute that the vehicle in which the plaintiff was an occupant was stolen and/or operated without the owner’s consent, and the exclusion clearly stated that coverage was also excluded for occupants. Coverage was therefore excluded under s.1.8.2 and the action for coverage was dismissed.

This case was digested by Michael J. Robinson, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Michael J. Robinson at mrobinson@harpergrey.com.

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