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AUTOMOBILE INSURANCE - Exclusions - Uninsured or underinsured motorist coverage

Tuesday, November 05, 2019 @ 6:23 AM  

Lexis Advance® Quicklaw®
Appeal by AllState Insurance from summary judgment declaring that AllState was obliged to respond to the plaintiff’s underinsured coverage claim. Cross-appeal by the plaintiff from the determination that the defendant ACE INA Insurance was not obliged to respond. The plaintiff was a truck driver driving his commercial truck as an independent contractor. The truck was insured under fleet insurance provided by ACE INA Insurance. The plaintiff was seriously injured while driving his truck in Florida. The responsible driver was underinsured to cover the plaintiff’s damages. The plaintiff had automobile insurance on his personal automobile through AllState. Both the AllState policy and the ACE INA fleet policy had attached OPCF 44R Family Protection Coverage endorsements which provided coverage for a collision with an underinsured vehicle. AllState did not provide insurance coverage for commercial vehicles.

HELD: Appeal allowed. Cross-appeal dismissed. ACE INA was not obliged to provide underinsured coverage to the plaintiff. Endorsement 11A to the ACE INA policy limited the underinsured coverage and specifically excluded that coverage for heavy commercial vehicles of the type the plaintiff was operating when the accident occurred. An insurer was not legally required to provide underinsured coverage, and there was no reason in principle why an insurer could not precisely tailor its offering of underinsured coverage, as ACE INA did in its fleet insurance policy. The AllState policy did not provide underinsured coverage in this case. Underinsured coverage was optional and was only provided by the endorsement. Nothing relevant to the resolution of the plaintiff’s claim could, in the context, be drawn from the silence of the policy on the availability of underinsured coverage under it. The motion judge treated the endorsement as a standalone insurance policy essentially independent from the AllState policy. Because the endorsement did not qualify the use of the term “other automobile”, the use of that term in the policy prevailed, including the associated Special Conditions. The Special Condition that excluded coverage for heavy commercial vehicles in the policy applied, and it deprived the plaintiff of underinsured coverage under the AllState policy with respect to the accident. It would be an incongruous result to find AllState liable as the default insurer for underinsurance coverage for all its customers engaged in the various commercial activities while they were on the job, simply because they had an AllState policy on their domestic vehicles.

Kahlon v. ACE INA Insurance, [2019] O.J. No. 4962, Ontario Court of Appeal, P.D. Lauwers, G. Huscroft and G.T. Trotter JJ.A., October 1, 2019. Digest No. TLD-November42019005