Owasco Canadian Car & Camper Rental Ltd. v. Fitzgerald et al., 2021 ONSC 7235

The plaintiff Owasco is an auto body shop. It rented a vehicle to Fitzgerald while his vehicle was under repair. Fitzgerald was operating the vehicle and was involved in a collision with a third party. All litigants agreed that the accident was the fault of the third party. Owasco, rather than submitting a claim to its own insurer for the property damage (which had a $25,000 deductible), sued Fitzgerald for the property damage in accordance with the rental agreement. Fitzgerald and his own insurer, Coachman, argued that s. 263 of the Insurance Act barred Owasco’s claim. The Small Claims Court rejected that argument and awarded Owasco damages for the rental vehicle.

On Fitzgerald’s appeal to the Divisional Court, Justice Dawe reversed the decision, holding that s. 263 was a complete bar to Owasco’s right to recover for property damage under the rental contract. He also held that Owasco could not make a claim for the damage under Fitzgerald’s Coachman policy. Owasco’s only remedy was to bear the cost of the damage itself, or make a claim to its own insurer (though the damage was less than the $25,000 deductible). Justice Dawe rejected the argument that Owasco could advance the claim through Coachman because Fitzgerald’s policy included an endorsement for damage to temporary substitute automobiles.

Enterprise Rent-A-Car v. Intact Insurance, 2018 ONSC 3517

On appeal, Enterprise argued that the applications judge erred in finding that the driver of the rental car (a listed driver under her father’s OAP1) was not “an insured named in the contract” and/or a “driver named in the contract” such that the priority provisions of s. 277(1.1)(2) of the Insurance Act would apply. The Divisional Court held that section 2.2.4 of the OAP1 provides that liability coverage is available for rental vehicles, but only when rented by the “named insured” or his/her spouse. The Divisional Court went on to find that the applications judge therefore properly concluded that insurance coverage was not “available” to a listed driver for the rental vehicle.