Published In: Insurance Law Newsletter – 11.Dec.18 December 11, 2018

Case Summary: Keep it simple: the rental contract lessee is the lessee in law

In order to determine the first-loss insurer for a motor vehicle accident, one only needs to look at the rental agreement for a leased vehicle.

Insurance law – Automobile insurance – Uninsured motorist – Priority coverage – Statutory provisions

Aviva Insurance Co. v. Wawanesa Mutual Insurance Co., [2018] O.J. No. 5018, 2018 ONSC 5778, Ontario Superior Court of Justice, October 1, 2018, S.S. Nakatsuru J.

The driver of a rental car involved in a motor vehicle accident was personally uninsured. The insurer of the driver’s principal and the insurer of the rental agency sought a determination as to which was the first-loss insurer. The Insurance Act, R.S.O 1990, c.I.8 provides that the renter is liable for damages sustained by reason of negligence in the operation of a rented vehicle and relieves the insurer of the owner of a rented vehicle from being the first-loss insurer where other insurance is available to the renter or driver of the rented vehicle. To determine the identity of the lessee of the vehicle for the purposes of the Insurance Act, the Court held that it need not go further than the rental agreement. As the driver had signed the rental agreement, he was the lessee. It did not matter that he had rented the vehicle to perform deliveries for his principal. It did not matter how the rental would be paid for and by whom. The focus was on the contractual arrangement made to rent or lease the vehicle.

This case was digested by Dionne H. Liu, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Dionne H. Liu at