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Coverage While Driving Rental Car Fell To Rental Company Insurer

Enterprise Rent-A-Car Canada Limited v Intact Insurance Co., 2017 ONSC 7515

In June 2013, Ms. Perets was involved in a motor vehicle collision while driving a rental car from Enterprise Rent-A-Car. Occupants from another vehicle brought an action against Ms. Perets for injury and damages. At issue was which insurer was required to respond to the claim: the insurer for Enterprise, or the insurer for Ms. Perets’ father (Intact), where she was listed as an additional driver.

The insurer for Enterprise argued there was a conflict between the Ontario policy and the Insurance Act. In the Act, the first loss insurer is the insurer of the person who rents the vehicle where that person is the named insured under their own policy. If that is not applicable then the insurer is the insurer of the driver of the vehicle where that person is either the named insured, the spouse of the named insured, or, like Ms. Peret, a driver listed by the named insured in an insurance policy. If neither of those is applicable, then the loss insurer is the insurer of the rental car company that owns the vehicle.

The standard motor vehicle policy (OAP1) was drafted so that coverage is only extended to rented vehicle for the named insureds, and not for additional drivers.

Intact argued that there is no conflict between the Act and OAP1, because the Insurance Act’s priority rules only applied when multiple policies covered the loss, so in this case, where the Intact policy did not cover this loss, there was no need to apply the priority rules from the Act. Enterprise Rent A Car disagreed with this interpretation of the OAP1 policy and argued that the policy covered the additional driver for a rental.

Intact argued that if the OAP1 policy covered all drivers for rental cars, then insurers would not offer the special OPCF 27 endorsement, which extended coverage for all insureds and additional drivers while using rental cars. If Enterprise’s interpretation was correct, the OPCF 27 would be redundant and inapplicable in all situations.

The judge found that to agree with Enterprises’ argument, the Court would have to agree with an interpretation that would create inconsistencies and conflicts between the OAP1 and the Insurance Act. On the other hand, the Intact position created a logical consistency between the OAP 1, the additional endorsements and the Insurance Act.

The judge agreed with Intact’s position and found that the rental company’s insurer would need to respond to the claim.

You can read Enterprise Rent-A-Car Canada Limited v Intact Insurance Co., 2017 ONSC 7515, in its entirety here.

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