Published In: Insurance Law Newsletter – 12.Nov.19 November 12, 2019

Case Summary: Rental Car Company Beware: Can You Sue on your Rental Agreement?

A car rental company’s claim against its renter offended the statutory prohibition against suing anyone other than one’s own insurer for damage to an insured car.

Insurance law – Automobile insurance – First party insured – Statutory provisions – Practice – Appeals

Quality Car Rentals Inc. v. Sedaghat, [2019] O.J. No. 4728, 2019 ONSC 5431, Ontario Superior Court of Justice, September 19, 2019, F.L. Myers J.

A car rental company appealed a small claims court decision that found that s.263(5)(a.1) of the Insurance Act, RSO 1990, c. I8 barred its claim against its renter. The rental agreement obliged the renter to provide his own insurance and to pay the rental company’s $10,000 deductible in the event of damage to the rented vehicle, regardless of fault. The renter was involved in a collision and the rental company sued him for its $10,000 deductible.

In dismissing the appeal, the court relied on the plain meaning of s.263(5)(a.1) and concluded that a rental company cannot sue its renter for the company’s own deductible under its first party compensation property damage coverage.

This case was digested by Jaeda B. Lee, 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 Jaeda B. Lee at