Case Summary: Ontario Corporation Number 1009329 (Enterprise Rent-A-Car) v Intact Insurance Company

Defence + Indemnity

April 2020 For an auto insurer to have any place in the priority list of insurers in a rental/leased car situation, its policy must provide coverage to a relevant insured.

Ontario Corporation Number 1009329 (Enterprise Rent-A-Car) v Intact Insurance Company, 2019 ONCA 916

Facts + Issues

Perets was involved in a motor vehicle accident in 2013 while driving in a vehicle she rented from Enterprise Rent-A-Car. She was sued for that accident.

At the time Perets was living with her family. Her father had an auto policy (OAP1) for his own vehicles issued by Intact Insurance. Perets was a "listed driver" under that policy but was not the named insured. The Intact policy covered the named insured when driving a rental vehicle, so Perets was not covered while driving a rental vehicle under that policy.

Intact and Enterprise entered into a reservation of rights agreement whereby Enterprise agreed to defend the action pending a later determination of the respective priorities of the Intact and Enterprise under s. 277.1 of the Ontario Insurance Act, R.S.O. c. I.8 (which is roughly equivalent to s. 596 of the Alberta Insurance Act, R.S.A. 2000, c. I-3).

The Ontario provision is as follows:

(1.1) Despite subsection (1), if an automobile is leased, the following rules apply to determine the order in which the third party liability provisions of any available motor vehicle liability policies shall respond in respect of liability arising from or occurring in connection with the ownership or, directly or indirectly, with the use or operation of the automobile on or after the day this subsection comes into force:

Firstly, insurance available under a contract evidenced by a motor vehicle liability policy under which the lessee of the automobile is entitled to indemnity as an insured named in the contract. Secondly, insurance available under a contract evidenced by a motor vehicle liability policy under which the driver of the automobile is entitled to indemnity, either as an insured named in the contract, as the spouse of an insured named in the contract who resides with that insured or as a driver named in the contract, is excess to the insurance referred to in paragraph 1. Thirdly, insurance available under a contract evidenced by a motor vehicle liability policy under which the owner of the automobile is entitled to indemnity as an insured named in the contract is excess to the insurance referred to in paragraphs 1 and 2. 2005, c. 31...