|
Insurance (Auto) - Ontario Policy Change Form Monthly Reporting Basis Fleet [OPCF-21A]. West York Sales and Leasing Inc. v. Dominion of Canada General Insurance Company (Travelers Canada)
In West York Sales and Leasing Inc. v. Dominion of Canada General Insurance Company (Travelers Canada) (Ont CA, 2026) the Ontario Court of Appeal allowed an insurance appeal, here brought against "the application judge’s decision requiring it to defend the action and indemnify" the respondent.
Here the court considers 'fleet' [OPCF 21A] auto insurance structuring:[4] The Ontario Automobile Policy (“OAP1”) is the standard Ontario auto insurance policy issued under provincial regulation pursuant to the Insurance Act, R.S.O. 1990, c I.8. Other terms of the Policy are set out in the Certificate of Insurance which includes the Ontario Policy Change Form Monthly Reporting Basis Fleet endorsement pursuant to the Policy (“OPCF 21A”).
[5] The purpose of OPCF 21A is to allow the easy addition and removal of vehicles as they enter or leave an insured’s fleet during the Policy term. Premiums are paid according to the number of vehicles in the fleet in a given month. It is the responsibility of the insured lessor to verify the accuracy of the monthly reports.
[6] There are three ways in which a vehicle can be insured under OPCF 21A.i. First, the Policy covers all vehicles owned or leased for more than 30 days, at the beginning of the Policy term, provided they are listed on the schedule of vehicles given to the insurer when the Policy term begins (“the Schedule”).
ii. Second, the Policy covers all new vehicles added to the fleet after the Policy term begins. The insured provides a monthly report to the insurer on the 15th day of each month. The report includes the number of vehicles that were part of the fleet the prior month. The monthly premium for the prior month is then calculated by multiplying the number of vehicles on the fleet that month by the premium per vehicle.
iii. The third category is vehicles owned or leased before the Policy term which the insured did not include in the Schedule when the Policy term began. OPCF 21A (c) provides that those vehicles, unlike the vehicles in the first and second categories, are not insured until “a request for coverage” is made of the insurer. ....
II. THE INSURANCE POLICY
Ontario Automobile Policy
[14] OAP1 sets out the rights and obligations of the insured and insurance company related to coverage following an automobile collision. All companies registered to sell automobile insurance in Ontario must use this standard form policy: David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Co. (2005), 2005 CanLII 21093 (ON CA), 76 O.R. (3d) 161 (C.A.), at paras. 25-27, leave to appeal refused, [2005] S.C.C.A. No. 395.
[15] Section 1.1 provides that coverage is set out in the “Certificate of Automobile Insurance”. Section 1.3 defines the certificate as:a written document summarizing your insurance coverage [that] lists the coverages purchased [and] premiums charged . . . and shows . . . the described automobile or automobiles. ....
OPCF 21A
i. The purpose of OPCF 21A
[18] OPCF 21A provides coverage to the driver, rental company and lessor of a fleet of automobiles. It allows the insured to change, add, or reduce the number of vehicles from month to month.
[19] The Schedule provided at the commencement of the Policy period is information used to establish the baseline premium for the one-year term of the Policy. Rather than re-issuing a certificate of insurance to accommodate the changeover of rental vehicles, a monthly fleet report is filed with the insurer that lists the insured vehicles on the fleet the preceding month. The monthly report is given to the insurer by the 15th of the next month and is used to adjust the premium owed as appropriate: Northbridge General Insurance Corp. v. 943240 Alberta Ltd., 2013 ABQB 760, 581 A.R. 248, at paras. 20, 28.
[20] In this case, for the month in question, the premium payable per vehicle was $290 per month. There were 26 vehicles listed on the monthly report such that the monthly premium payable was $7,540.
ii. The terms of OPCF 21A
[21] OPCF 21A provides as follows:It is agreed that:
(a) The Policy shall provide insurance with respect to all automobiles licensed or required to be licensed in Ontario which are:
(i) owned by and licensed in the name of the insured,
(ii) leased from [all lessors] for a period in excess of 30 days on which the insured as lessee is required to provide insurance under a written lease agreement.
....
(c) The schedule of automobiles filed with the insurer includes all automobiles, as set out in (a) above, at the effective date of the Policy or renewal.
NO COVERAGE IS PROVIDED BY THIS CHANGE FORM ON ANY AUTOMOBILE OWNED OR LEASED BY THE INSURED PRIOR TO THE EFFECTIVE DATE OF THE POLICY WHICH IS NOT INCLUDED ON THE SCHEDULE OF AUTOMOBILES FILED WITH THE INSURER UNTIL A REQUEST FOR COVERAGE HAS BEEN FILED WITH THE INSURER.
....
(f) On or before the fifteen of each month during the policy period the insured shall render to the insurer a statement of the actual amount of Receipts Mileage Other (State Applicable Basis of Rating) for the preceding month. Upon receipt of this statement (from the insured) the earned premium shall be computed monthly by applying the rates specified in paragraph (e) and is due and payable as agreed between the insurer and insured. [Emphasis added in underline.] [22] As such, paragraph (a) provides that the Policy covers all vehicles owned or leased for more than 30 days.
[23] The first sentence of paragraph (c) provides that the Schedule of automobiles provided to the insurer at Policy inception includes all vehicles owned or leased for more than 30 days “at the effective date of the Policy”.
[24] However, the second sentence of paragraph (c) specifically excludes from coverage any vehicles owned or leased at the commencement of the Policy term, that the insured did not list on the Schedule at Policy inception. Those vehicles are not covered until the insurer receives “a request for coverage”.
[25] Unlike OPCF 21A (a), paragraph (c) is in all capital letters to emphasize that it limits coverage otherwise provided in (a).
[26] OPCF 21A (f) provides that by the 15th of the month following the addition of a vehicle onto the fleet, the insured must provide the information necessary to assess the premium payable on insured vehicles for the preceding month. OPCF 21A (f) does not address the issue of coverage.
iii. The purpose of OPCF 21A (c)
[27] There seems to be no published regulatory history explaining why paragraph (c) was included in OPCF 21A. Neither the former Financial Services Commission of Ontario (“FSCO”) nor its successor, the Financial Services Regulatory Authority of Ontario (“FSRA”), has published explanatory notes discussing the drafting of clause (c). Based on similar wording in other fleet insurance policies in Canada and beyond, clause (c) appears to have originated from standard commercial fleet underwriting rather than from a specific legislative amendment in a given province.
[28] While it is not clear why vehicles owned or leased that are not on the Schedule at Policy inception are treated differently, they are treated differently under the Policy.
....
The First Issue: Policy coverage
[53] The Policy must be interpreted by reading OAP1, the Certificate of Insurance, and OPCF 21A together. OAP1 provides for coverage after a car accident and OPCF 21A modifies that coverage to address the needs of businesses that operate large or changing fleets of vehicles and to provide flexibility for vehicles in those changing fleets. At paras 54-75 the court considers the provisions of the OPCF 21A fleet policy regarding when an as-yet uninsured vehicle can be added to coverage under the subject policy.
|
