This decision may force automobile insurance companies to insure
clients who cause an accident while driving with a lapsed
While vacationing in Florida, 77 year old Barbara Kozel of
Ontario was involved in an accident with motorcyclist Arthur
Grimes. Mr. Grimes was seriously injured.
Mr. Grimes commenced a civil action against Ms. Kozel. Her
insurer, The Personal Insurance Company, denied Ms. Kozel coverage
because she did not have a valid driver's license at the time
of the accident. Ms. Kozel sought a declaration from the
Court that Personal Insurance Co. must indemnify her and defend her
against Mr. Grimes' lawsuit.
The Ontario Superior Court ruled that Personal Insurance Co.
must indemnify and defend Ms. Kozel. Although she was driving
with an expired license, Ms. Kozel demonstrated due
diligence. She was unaware that her licence had recently
expired, and she had a long history of renewing her license on
The Personal Insurance Co. appealed. The Ontario Court of
Appeal reversed the application judge's finding of due
diligence. The Court stated that there was no evidence that
Ms. Kozel did anything to inquire about or even consider renewing
her driver's license. However, the Court granted Ms.
Kozel relief against forfeiting her insurance coverage because:
Ms. Kozel always paid her premiums in a timely manner and acted
in good faith;
The breach had no impact on the respondent's ability to
drive safely; and
Ms. Kozel stood to lose $1,000,000 in insurance coverage, while
her failure to renew her licence in and of itself had caused no
prejudice to the insurance
The Personal Insurance Co. was ordered to defend and, if needed,
indemnify Ms. Kozel.
Read the whole of Kozel v Personal Insurance Co, 2014
Under B.C.'s former and current Limitation Act, the limitation period for a Plaintiff's claim can be extended on the basis of a Defendant having acknowledged in writing some liability for the cause of action.
Automobile drivers, like fine wine, tend to get better with age. Older drivers can draw on a wealth of experience from their years on the road to assist them when faced by a variety of dangerous conditions.
The insurance industry will be interested in Ledcor Construction Ltd v. Northbridge Indemnity Insurance Co because of principles the Supreme Court of Canada applied to the "faulty workmanship" exclusion in a Builders' Risk policy.
For the first time in BC, a Court has decided that an insured is entitled to special costs, rather than the lower tariff costs, solely because they were successful in a coverage action against their insurer.
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