The Superior Court of Justice has held that an insurer of a leased vehicle is entitled to subrogated against a driver who operates the vehicle without the proper licence.
In Certas v. Strifler, the policy was issued to the lessee of the car. The lessee’s 19 year old daughter drove the vehicle with a G2 licence. One of the conditions of her licence was: “The number of passengers in the motor vehicle must not exceed the number of operable seat belt assemblies installed in it.” The daughter was involved in a single-car accident, while there were more passengers in the car than there were seat belts.
In this action, Certas sought to recover $23,110.50, which it had paid to the leasing company (presumably, for damage to the leased vehicle).
Justice John Cavarzan held that the daughter had breached statutory condition 4, which requires that a driver be “authorized by law” to drive. He noted that the waiver of subrogation in the policy did not apply to those driving while not authorized by law. Hence, the daughter was liable to reimburse the insurer.
It is interesting to note that the claim was for property damage only and the waiver of subrogation provisions in the policy, referred to by the trial judge, appear in Section 7–Loss or Damage Coverages (Optional). That section deals with property damage claims, other than those covered by Direct Compensation (dealt with in Section 6 of the policy). Would the daughter have been liable to reimburse Certas if there had been a bodily injury claim for which Certas had paid on behalf of her father?