Underage Driver Awarded Benefits Despite Driving Car Without Permission

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R.P. was injured in a motor vehicle accident on April 11, 2009. He applied for and was denied certain statutory accident benefits from Intact Insurance Company ("Intact"), payable under the Schedule. The parties were unable to resolve their disputes through mediation, and Mr. P. applied for arbitration at the Financial Services Commission of Ontario under the Insurance Act.

Because Mr. P. was not an adult at the time of the events outlined in this decision, an order has been made pursuant to section 9 of the Statutory Powers Procedure Act, that the name and the identity of the Applicant not be revealed in any public version of this decision.

Mr. P. was the sole occupant of the car, and sustained a serious head unjury as a result of the accident leaving him with no memory of the events leading up to the accident.  He possessed a G1 licence at the time of the accident.

Both parties agreed that, since the operation of the exclusionary clause is the only issue to be arbitrated, the onus in this matter rests with the Insurer to prove on the balance of probabilities that at the time of the accident Mr. P. knew or should have reasonably known that at the time of the accident he was driving a vehicle without the owner's consent. The Arbitrator in this case was left to rule on whether Mr. P was eligible for non earner benefits notwithstanding the fact the owner of the vehicle had given Mr. P. permission to drive it.

The central question arose regarding Mr. P's reasonable belief that he had permission to drive the car.

The only question in this case is whether the section 30 exclusion should be applied to bar RP's claim for accident benefits. It is trite law that insurance coverage clauses should be liberally interpreted while exclusionary clauses should be narrowly interpreted. This applies equally to accident benefits since they are incorporated in and arise by virtue of an insurance policy.

In this case, such an approach would suggest a larger interpretation of "reasonable belief", one that went beyond the narrow view of the mythological "reasonable person" of tort and encompassed the context of youthful drivers.

Consequently, the Arbitrator found Intact has not met its burden of proving that, at the time of the accident, RP knew or should reasonably have known he was driving the 1998 Lincoln without the owner's consent, as set out in section the Schedule.

You can read a more detailed extract of this ruling on my website