An insured who is found to be in breach of the conditions of his automobile insurance is responsible to compensate his insurer for funds paid to a third party under his policy of insurance. The insurer’s ability to recover these funds from its insured is not effected by the fact that it consented to a Consent Dismissal Order terminating the action commenced against its insured for the injuries suffered in the accident.
Insurance Corp. of British Columbia v. Schmidt, [2004] B.C.J. No. 2892, British Columbia Supreme Court