No Duty to Remind Insured of Excluded Driver Endorsement

In Hunter v. Economical Insurance Group, Mr. Justice Robert MacKinnon of the Ontario Superior Court has ruled that an excluded driver endorsement was not ambiguous and that even though the accident occurred three years after the endorsement was issued, the insurer had no obligation to warn the insured that the endorsement was still in force.

The claim arose out of an accident, in which the insured’s son was operating an ATV owned by the insured. The injured party claimed compensation from the father, the insured. The father sought liability coverage from his insurer, Economical Mutual, but was refused. This litigation related to the coverage issue.

It was to the son that the excluded driver endorsement (OPCF 28A) applied. The endorsement had been issued in 1997 and the policy had been renewed three times afterwards. In 2000, the insured purchased an all terrain vehicle and added it to the policy. The insured’s son was operating that ATV at the time of the accident (although there is some indication that it was without the permission of the father).

The insured argued that the insurer ought not to be able to rely on the excluded driver endorsement because three years had gone by and the insured had added an ATV in that time, without any warning from the insurer that the endorsement was still in effect.

The court rejected the insured’s argument:

There is no obligation in law on an insurer to insist that on each renewal a fresh O.P.C.F. 28A be signed by the insured and the excluded party. Rather, an insured has a positive obligation to take proactive steps to get the excluded party back on coverage. The obligation is on the insured if he wishes a change. The terms of the excluded driver Endorsement in this case were fully brought to the attention of the insured at the time it was signed. There is no ongoing obligation on the insurer to continue to remind an insured in these circumstances that the excluded driver Endorsement remains in effect. The excluded driver amendments to the Insurance Act indicate that the legislature intended to provide insurers with a broad protection from liability when an excluded driver is driving.

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