Canada: Parents Hurt While Vacationing With Son Are Covered Under His Car Insurance

Drover v. Smith, 2014 NLCA 31

In the spring of 2006, Wade Drover and his wife Kerri went on a family vacation to Florida bringing their four children and Wade's parents Clement and Eileen. Drover had offered to pay for the flight, lodging, and all other expenses for his parents during the trip, so they could assist with the children during the vacation.

Drover rented a mini-van from the airport. Shortly after the family left the airport, Florida resident Michael Smith rear-ended the mini-van. All members of the Drover family were hurt in the crash.

Mr. Smith admitted liability for the crash and his insurer paid out the policy limits under Mr. Smith's insurance contract to the Drover family. However, this did not pay for all of the Drover family's claims.

As part of his automobile insurance policy, Drover had bought the Family Protection Endorsement (SEF 44) from his insurer to pay for bodily injury claims should any dependent family member be hurt in a motor vehicle accident and the other driver is inadequately insured.

Drover's insurer, Scottish & York Insurance Co. ("Scottish"), accepted that he, his wife and their children were eligible claimants under the SEF 44 policy. Scottish denied that Drover's parents, Clement and Eileen, were eligible. Scottish applied to the Court to dismiss Clement and Eileen's claims.

The Newfoundland and Labrador Supreme Court refused Scottish's request to dismiss Clement and Eileen's claim. For Drover's parents to qualify under the policy they had to be "dependents". The Court ruled that, generally speaking, Clement and Eileen were not dependent relatives of their son prior to the Florida vacation; they lived in their own house and were financially independent. During the trip, however, Drover's parents were dependents; he paid for all of their expenses and arranged for their lodging, transportation and activities.

Scottish appealed. The Court of Appeal upheld the original ruling, stating that Clement and Eileen could be understood as being "dependents" during the trip because Drover had agreed to take care of their expenses and arrangements. Where a term in the Scottish insurance contract, like the word "dependent" is vague or ambiguous the Court of Appeal found that it must be interpreted in favour of the person claiming coverage.

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