NO SEF 44 COVERAGE AVAILABLE FOR PASSENGER OF STOLEN VEHICLE

Michelle E. Grose
Counsel for the Appellant, the Alberta Motor Association Insurance Company

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In the recent case of Cardinal v. Alberta Motor Association Insurance Company, Ms. Cardinal sued the AMA Insurance Company for SEF44 benefits after she was injured as a passenger in a single vehicle collision.  The AMA Insurance Company denied the claim on the basis that while Ms. Cardinal was an insured under the policy, she was not entitled to indemnity on the basis that she was a passenger in a vehicle being driven without the consent of the owner.   The owner of the vehicle, was not named in the underlying tort action, but he swore an Affidavit confirming the vehicle was being driven without his consent on the night of the accident (having been stolen off his driveway sometime during the night).  Initially, the AMA Insurance Company applied for, and was granted, summary judgment dismissing the claim against them.  On appeal to the Court of Queen’s Bench, the lower court decision was overturned by Justice Lee who held that there was ambiguity in the meaning of the auto policy – specifically as to whether the plaintiff/passenger’s knowledge about the vehicle being stolen was required before the claim could be denied.   The AMA Insurance Company appealed this decision to the Albert Court of Appeal.

On February 21, 2018, the Alberta Court of Appeal, in Cardinal v. Alberta Motor Association Insurance Company, 2018 ABCA 69, overturned the Queen’s Bench and confirmed that if an Insured is an occupant of a vehicle being driven without the consent of the owner, then there is no coverage under the Auto Policy or the SEF44 endorsement.  Ms. Cardinal had argued at the Court of Queen’s Bench that her knowledge regarding whether the vehicle was driven without the consent of the owner was relevant under the SEF44 and Auto Policy.  She conceded in the application that the vehicle was in fact being driven without consent.
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The Court of Appeal, in a unanimous judgment, held that the exclusion relating to the consent of the owner was not ambiguous and that the plain reading of the provision confirmed that there was no coverage when the vehicle was being driven without consent.  Further, the Court noted that “it is normal for insurance policies to contain exclusions and the fact that some claims are thereby removed from coverage does not, in itself, give rise to unfairness.  If claims by persons without knowledge are to be covered, the remedy lies with the legislature, not with the courts.”   They therefore held that that exclusion was clear and unambiguous and that the Plaintiff’s claim against the AMA Insurance Company was summarily dismissed.

​Leave to appeal to SCC was denied.
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Michelle E. Grose
Counsel for the Appellant, the Alberta Motor Association Insurance Company