Court Clarifies Definition of “Newly Acquired Automobile” in Motorcycle Accident Case Canadian Underwriter

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A newly acquired motorcycle is considered a “newly acquired automobile” for the purposes of accident benefits under the Ontario Automobile Policy (OAP 1), according to a panel of three Ontario judges.

The Divisional Court considered a statutory appeal within the meaning of section 2.2.1 of OAP 1, which seeks to extend insurance to other automobiles. The court determined that a motorcycle qualifies as an automobile under OLHI 1, meaning that a claimant who had a newly acquired motorcycle was entitled to accident benefits that were denied to him.

She upheld a decision of the Licensing Appeal Tribunal which was also upheld in its review decision, finding that the motorcyclist was covered by the policy held by the insurer of the vehicle he already owned.

The case stems from an accident on July 16, 2016 which seriously injured Jacob Johnson. The accident involved the Harley Davidson motorcycle that Johnson was riding. Johnson sought accident benefits from his insurer, Jevco Insurance Company, the insurer of the motor vehicle he already owned (a Chevrolet Silverado).

Some, not all, benefits were denied on the grounds that Johnson was riding the motorcycle without insurance. The benefits listed in dispute were an income replacement benefit, living expenses and a housekeeping and housekeeping benefit.

At the origin of the statutory appeal was the following question: “Is the motorcycle purchased by Jacob Johnson a ‘newly acquired automobile‘ such that the insurance policy taken out in respect of the Chevrolet Silverado covered the motorcycle at the time of the accident and was providing Jacob with the benefits that were denied? ”

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That was, wrote Justice Thomas Lederer on behalf of the Divisional Court in his unanimous decision in Johnson v. Jevco, published Wednesday. “A motor vehicle which, by virtue of Traffic Laws includes a motorcycle is, for the purposes of Insurance Act, an automobile because under the Compulsory Automobile Insurance Act you have to be insured, ”Judge Lederer wrote. “On this basis, a motorcycle is recognized as an automobile when that term is used in the owner’s policy of the Ontario Automobile Policy (OAP 1).

“However, when the Ontario Automobile Policy, s. 2.2.1 refers to a “newly acquired automobile”, this includes a newly acquired motorcycle. As stated in the License Appeal Tribunal decision and confirmed in the reconsideration decision, this means that Jacob Johnson was insured on the day of the accident and, given the parties’ agreement, is entitled to benefits. that were refused to him.

S 2.2.1. says that “a newly acquired automobile is an automobile or trailer that you acquire as the owner and that is not covered by any other policy. It can be a replacement vehicle or an additional vehicle. The replacement automobile will have the same coverage as the described automobile it is replacing.

Johnson purchased the motorcycle on July 5, 2016. The next day, he contacted his broker to request a quote to insure a Harley Davidson. The day after the purchase, Johnson was informed that Jevco was not purchasing motorcycle insurance and, “given his poor driving record, he should seek insurance from the insurer of last resort, the Facility Association.” , indicates the decision.

“Jacob Johnson did not, in this discussion or a subsequent discussion that took place five days later (July 11, 2016), notify the broker that he had already purchased a motorcycle,” the judge wrote. Lederer. “Jevco was not notified of the purchase until August 2, 2016.” He had the motorcycle accident on July 16, 2016 and applied for benefits from Jevco.

Jevco had argued that Johnson did not notify the insurer of the purchase until August 2, 2016, well after the date of the accident (July 16, 2016) and after the 14 day period in which notice of such purchase is required under s. 2.2.1 of the PAO 1. In addition, no additional premium was paid to insure the motorcycle, argued Jevco.

“I will repeat what is said in art. 2.2.1: “Your newly acquired cars will be insured provided you notify us within 14 days of delivery and pay any additional premiums required,” Judge Lederer wrote. “[Jevco] ignores the importance of the 14-day notice period. This is a grace period for continuing assurance to be in place; it is not a prerequisite for providing insurance for the 14 days.

Plus, there’s no need to pay an additional premium to activate what is automatic coverage for a newly acquired automobile, although coverage only extends for 14 days, according to the ruling.

“The conclusions of the License Appeal Tribunal flow from a simple and clear reading of s. 2.2.1 of the Ontario Automobile Policy (OAP 1) Owner’s Policy ”, concluded Judge Lederer. “There is no ambiguity or uncertainty and no reason to overturn the initial decision of the License Appeal Tribunal.

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