Woman injured in car accident with rental vehicle not covered by insurance: Ontario Superior Court

The court dismissed the appeal, finding that the arbitrator made no palpable and overriding factual errors and correctly applied the law. The court affirmed that the Aveo was not an insured vehicle. It was an excluded vehicle under the insurance policy, and the Insurance Act does not require that accident benefits be provided.

At the time of the accident, Economical insured Satkar under a standard Ontario Garage Policy or OAP 4. The policy provided insurance coverage for automobiles Satkar owned and used in its business. The issue was whether the Aveo was used in Satkar’s business and, consequently, included in the vehicles insured under the OAP 4.

The OAP 4 provides coverage for “owned automobiles”. Economical argued that the Aveo was not covered by the OAP 4 because Satkar gave the Aveo to Flash Car and Truck Rentals to use as a rental vehicle under a written “lease to buy” agreement whereby Flash made monthly lease payments to Satkar and at the end of the term of the lease, ownership would be transferred to Flash.

Trafalgar’s position was that the OAP 4 is an automobile policy that covers all vehicles owned by Satkar, and as such, it is deemed to include accident benefits. Trafalgar asserted that Economical could not rely on a term in the OAP 4 to deny accident benefits coverage for Aveo.

The arbitrator found that providing the Aveo to Flash to be used in a fleet of rental vehicles was outside the scope of the business description set out in the policy. The arbitrator found as a fact that the “lease to buy” arrangement between Satkar and Flash cannot be considered part of the ordinary described business of Satkar, namely, “repairs of light commercial and private passenger vehicles and used car sales.”