This week’s attack in Toronto where a rental vehicle was used as a weapon, plunging into a crowd of people, killing 10 and injuring 15 has raised many questions. For example, how do rental car companies protect themselves and the public from their vehicles being used as weapons? The insurance industry is also considering whether companies are on the hook if the renter or driver have auto insurance.
Alex Minassian has been charged with 10 counts of first degree murder and 13 counts of attempted murder after he used a rental van to drive along sidewalks on Yonge Street in Toronto.
Intentional acts such as crimes are typically excluded from liability insurance policies, but standard auto liability coverage in Ontario does not exclude criminal acts. Under section 258 (4) of the Insurance Act, it says the right “have insurance money applied” to a judgment is “not prejudiced” by a criminal act.
Furthermore, Section 118 explains that a crime “does not, by that fact alone, render unenforceable a claim for indemnity” for an insurance contract.
These stipulations “operate so that the insurer of the driver would have to respond to any claims” in an act such as the events in Toronto, said David Contant, an Ottawa-based lawyer for Nelligan O’Brien Payne. Speaking to Canadian Underwriter, he added “The insurer of a rental vehicle is responsible for indemnifying a claimant, but only if the lessee and driver are not insured.”
In basic terms, the sections of the Insurance Act mean if a rental vehicle is used as a weapon in the province, the driver and/or the person who rented the vehicle on their auto policy, the rental company will been deemed as at least partially negligent. In turn, this means the company would claim from its insurance coverage.