February 19, 2020, Kitchener, Ontario
Posted by: Robert Deutschmann, Personal Injury Lawyer
Kahlon v. ACE INA Insurance, 2019 ONCA 774 (CanLII)
Court of Appeal for Ontario
Date of Decision: October 1, 2019
Heard Before: Lauwers, Huscroft and Trotter JJA
INSURANCE: auto insurance; plaintiff seriously injured by underinsured motorist; plaintiff operating a transport truck in Florida; attempted to claim benefits from employer policy and own auto insurance policy; both policies restrict underinsured coverage in heavy commercial vehicles like the one operated by plaintiff
Mr. K was operating the tractor trailer in Florida when he was delayed in a long traffic lineup. He exited his rig to see what the delay was and was struck by a Florida car who carried a policy limit of $20,000. Mr. K was very seriously injured. Mr. K was insured under a personal automobile policy in Ontario with Allstate. The company Mr. K was operating the truck for had fleet insurance in Ontario with ACE INA.
On a motion Justice Whitten determined that Allstate was obliged to respond for underinsured coverage and that ACE INA was not. Allstate appealed and Mr. K cross-appealed with respect to the underinsured coverage under the ACE INA policy.
At the Court of Appeal the decision was that neither ACE INA nor Allstate was responsible for any underinsured coverage per the OPCF 44R endorsements in their policies. Sec. 22 of the endorsement states “except as otherwise provided in this change form all limits, terms, conditions, provisions, definitions and exclusions of the policy shall have full force and effect”.
On this basis the conditions in the policy are applicable to underinsured coverage. The auto insurance policy states that if an insured is driving a vehicle not described in the policy the vehicle must not have a gross vehicle weight of more than 4,500 kg. The policy explicitly excludes coverage for heavy commercial vehicles.
Mr. K was the operator of a heavy commercial vehicle and on that basis the Court of Appeal held he was not entitled to coverage from Allstate. Underinsured coverage was not available under the ACE INA fleet policy as it had an endorsement restricting this coverage. The endorsement specifically included that underinsured coverage is only available to the driver when operating a passenger or light commercial vehicle.
Commercial fleet insurers in Ontario stopped offering underinsured coverage for heavy commercial vehicles 15 years ago due to the risks involved with truck fleets operating in America. Many drivers in America permitted to carry very low liability insurance limits. The Court of Appeal found this to be an unfortunate, but necessary, result, noting that "this outcome follows from the decision of the provincial government many years ago not to make underinsurance coverage mandatory".
On this basis the Court of appeal held that while this was an extremely unfortunate case, it is the outcome of decisions made by the provincial government not to make underinsured coverage mandatory. The Court concluded “courts have no authority to simply override contractual language in order to force the provision of coverage where none is contemplated….just because they consider it good public policy….this is the business of the provincial government, not the courts”.