Underinsured coverage was optional and was only provided by endorsement

Insurance - Automobile Insurance - Underinsured Motorist Endorsement

K's corporation owned and leased tractor to B Inc.. K operated it as independent contractor for B Inc. under fleet insurance provided by insurer AC. At time when K was operating tractor with trailer, he stepped out of stopped tractor to determine cause of delay. Domestic vehicle struck and injured K. Insurance coverage available to domestic vehicle was only $20,000. K had insurance on his own personal automobile through insurer AL. Motion for summary judgment was granted to K and declaration was made that insurer AL was obliged to respond to K's underinsured coverage claim. Insurer AL appealed. Appeal allowed. Motion judge did not err in concluding that insurer AC was not obliged to provided underinsured coverage to K. Motion judge erred in his analysis of whether insurer AL was obliged to provide underinsured coveraged to K. Policy did not provide underinsured coverage; underinsured coverage was optional and was only provided by endorsement. Nothing relevant to resolution of K's claim could, in context, be drawn from silence of policy on availability of underinsured coverage under it. “Special Condition” that excluded coverage for heavy commercial vehicles applied, and it deprived K of underinsured coverage under insurer AL policy. Apart from K's reasonable expectations, insurer AL's reasonable expectations also had to be taken into account; insurer AL did not provide coverage for commercial vehicles. Underinsured coverage was not available on explicit terms of policy and endorsement.

Kahlon v. ACE INA Insurance (2019), 2019 CarswellOnt 15337, 2019 ONCA 774, P. Lauwers J.A., Grant Huscroft J.A., and Gary Trotter J.A. (Ont. C.A.); reversed (2018), 2018 CarswellOnt 976, 2018 ONSC 784, Whitten J. (Ont. S.C.J.).

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