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Improperly Driving While Disqualified Breaches Policy Conditions That May Void Insurance Coverage
Question: Can a traffic ticket conviction affect my insurance coverage in Canada?
Answer: Yes, being found guilty of certain traffic violations can potentially affect your insurance coverage, but nuances in the law, such as in Tut v. RBC General Insurance Company, 2011 ONCA 644, show that there might be room for defence. It's essential to understand the implications of strict liability versus absolute liability to safeguard your rights and coverage.
Can Being Found Guilty For a Traffic Ticket Result in Loss of Insurance Coverage?
Being Found Guilty For Certain Traffic Violations May Result In a Denial of Coverage or Make Fighting For Insurance Coverage Difficult.
Understanding When a Traffic Ticket Conviction May Void Insurance Coverage Including Defence Against Liability Claims
It is commonly understood, and perhaps mistakenly so, that exclusions and conditions within an automobile insurance policy that would trigger a denial of coverage arising from a violation of licensing conditions and restrictions are absolute; meaning if you did it, and are therefore legally guilty, then your insurance is always voided; however, such is often an inaccurate assessment as indeed some slack may apply to certain circumstances similar to that which occurred within the case of Tut v. RBC General Insurance Company, 2011 ONCA 644. The Tut case involved the denial of insurance coverage for an accident involving a novice driver with a G2 class license who was caught operating the insured vehicle, unknowingly, with a blood alcohol level above 0.0 percent. The concern arose when the novice driver attended a party the prior evening and consumed alcohol. On the morning following the party, the novice driver, who was without any signs or sense of impairment, was involved in the accident.
During the accident investigation, the novice driver was found to have a blood alcohol content of .01 percent which, technically, violated the terms of the insurance policy. Due to the violation, RBC denied the insurance coverage including the duty to defend liability claims brought against the driver and owner of the vehicle by the accident victims. Tut brought suit against RBC for wrongful denial of coverage and was successful in the lower courts. RBC then appealed to the Court of Appeal for a determination that the violation was an absolute offence under the Highway Traffic Act, R.S.O. 1990, c. H.8 and therefore the insurance coverage exclusion for driving while disqualified was deservedly trigged.
Subsequently, the question was raised as to whether the driving offence was an absolute liability offence, meaning that if the conduct was committed, the law fails to allow any excuse or whether the driving offence was a strict liability offence with the availability of proof that a person attempted to act lawfully; but despite the attempt, still violated the law.
Upon reviewing the question of whether the Highway Traffic Act violation was always inexcusable, the Court of Appeal said:
[21] RBC relies on two recent cases which held that s. 6(1) is an absolute liability offence. Neither case assists RBC.
[22] The first case, Maharaj, refers to this court's decision in Kanda, but does not correctly apply it. The court in Maharaj takes into consideration the public safety goal of the legislation without engaging in any real weighing of society's revulsion against punishing the morally innocent. The latter is why the law recognizes a presumption against absolute liability. Instead, Maharaj places emphasis on the fact that driving is a privilege, [page487] and on ease and efficiency of enforcement. In my opinion, it is wrongly decided.
[23] The second case RBC relies on, R. v. Nyaata, [2005] O.J. No. 4754, 2005 ONCJ 454 (CanLII), states that the offence of having a blood alcohol content greater than zero is an absolute liability offence. However, the court also held that the evidence of a strong odour of alcohol on the accused's breath and the fact he held a G2 licence constituted a prima facie case that was rebuttable but, as the defence had called no evidence, a conviction would be registered. Holding that the violation of s. 6(1) can be rebutted is inconsistent with the offence being one of absolute liability. This case, too, is of no assistance to RBC.
[24] Applying the factors in Kanda to this case, I make the following observations:
(1) In Kanda, this court was concerned with the same overall legislative scheme as here, namely, the HTA, and it held that the overall regulatory pattern of the HTA is neutral. (2) The penalty for a violation of s. 6(1) is a suspension of the offending driver's licence. This penalty is more severe than the penalty of a modest fine for the seat belt infraction in Kanda. This factor tilts more in favour of the offence in this case being one of strict liability as compared to Kanda. (3) Some of the sections in the HTA create an absolute liability offence by specifically excluding a due diligence defence. The language of s. 6(1) does not specifically preclude a due diligence defence. Section 6(1) also uses the mandatory word "must" but, as noted at para. 38 of Kanda, the case law does not support the conclusion that mandatory language necessarily results in absolute liability. (4) The important public purpose in Kanda was, as here, road safety and protection of users of the road. The court in Kanda held that classification of the offence as one of strict liability was an appropriate balance between encouraging drivers to be vigilant about safety and not punishing those who exercise due diligence. I would reach the same conclusion in this case.
[25] Thus, the application of the four Kanda factors leads me to conclude that the presumption against the offence being one of absolute liability has not been rebutted. The offence is one of strict liability.
It is notable that the Tut case related to an accident that occurred in June 2007 and that the zero (0.0) percent blood alcohol condition contained within the Highway Traffic Act has since changed and thus the precise facts and issue within the Tut case may now be inapplicable; however, the Tut case still shows that where an offence is subject to strict liability, rather than absolutely liability, what appears at first glance as an insurance violation that would result in a denial of coverage may still involve some latitude.
Summary Comment
The denial of coverage by an insurer may be financially disastrous to those left without insurance protection; and accordingly, whether the conditions that support the reason to deny coverage should be absolutely applied without availability of any possible excuse or strictly applied with availability of a reasonable due diligence excuse, is of utmost importance. While the Highway Traffic Act conditions that applied when the Tut case occurred may now be changed, the principle that a strict liability offence under the Highway Traffic Act does afford possibility of a defence does provide for leniency in what would otherwise be a situation of absolute liability with serious insurance coverage consequences.