Has someone other than you driven your car without your knowledge?
What happens if that mystery person gets in to a car accident?
What happens if you knowingly loan your vehicle to someone else to drive; and that person gets in to a car accident; but it turns out that the driver was operating your vehicle without a driver’s license or with a suspended driver’s license?
What happens if you loan your vehicle to a driver who was specified as an excluded driver under the policy?
While these hypothetical fact patterns may seem a bit remote, or foolish, they happen more than you think!
Cases such as these often see their way up the the Court of Appeal, or try to get heard at the Supreme Court. Leave to appeal is sometimes granted, and sometimes denied. Nonetheless, these coverage issues do not stop the parties from trying to get their cases heard before the Supreme Court. These cases drive the law in one direction or another. Often large insurers will spend a disproportionate amount of money arguing these coverage claims given that they will impact present and future coverage disputes. What this means is if on the face of the claim, the parties agree that the damages would range between $40,000-$100,000; insurers will spend that money if not more arguing the disputes. These are business decisions based upon legal principals in order to get the law right. And when I mean right, I mean working in favour of an insurer to deny coverage and not the other way around.
The grand lesson from all of these hypotheticals and decisions is that it’s very important to know who you are loaning your car to, and to know whether or not that person is allowed to legally drive. If not, you could end up in the wrong without coverage.
The Issue of Consent
Consent can come in one of two ways: either express or implied.
Express consent is when you expressly state (either verbally or in writing) that another person is allowed to drive your vehicle. That sounds simple enough and easy to establish.
Implied consent is when there is no express consent, but consent is implied via actions. Handing your keys over to another person is implied consent. Leaving your keys in a tray for a family member to operate your vehicle can be seen another form of implied consent. Implied consent is a bit trickier to establish because it’s not so straight forward as express consent, but it still counts.
Courts will also look at how the driver came in to possession of the keys. If the keys were stolen, there won’t be any implied or express consent to operate the vehicle. If the keys were handed over to another person at a bar because the owner of the car had too much to drink and needed a lift home, this is implied consent.
Side note: What happens if the owner of the car had so much to drink that they were passed out; and then a friend (who doesn’t have a valid driver’s license), takes their keys out of their pocket; and proceeds to drive the passed out drunk person home and gets into an accident. Is that consent? Perhaps depending on the relationship between the parties and their prior understanding. If it’s a complete stranger, then not likely but an interesting fact pattern nonetheless.
Once consent is established, insurance coverage will crystalize and be granted. The Ontario Court of Appeal had this to say in Skunk v. Ketash, 2016 ONCA 841 (CanLII)
If the motor vehicle is driven by a person who has the owner’s consent and is involved in an accident, s. 3.2 of the OAP provides coverage: “You are covered when you, or anyone else in possession of a described automobile with your consent, uses or operates it. We will consider these other people insured persons.”
 But some owners fail to insure their automobile, or their insurance is voided, and so the automobile is not insured. The Insurance Act mandates a scheme to provide for limited insurance coverage where the operation of an uninsured automobile injures a person. The coverage is provided by the injured person’s own insurer, but coverage is limited to the minimum required by s. 251 of the Insurance Act, which is $200,000 for liability claims.
 In order to mitigate the consequences of being injured by an uninsured or underinsured motor vehicle, purchasers of automobile insurance policies in Ontario can buy, for an additional premium, added coverage in the form of the OPCF 44R Family Protection Coverage Endorsement.
What happens where consent cannot be established?
The Ontario Court of Appeal held in the above noted Skunk decision that where consent is not established, there is no duty to defend and coverage does not apply.
This can be very hard. Think of the case of the person who had passed out or was too intoxicated at the bar to think straight. The drunk person is alleged to have given his keys, or allowed his keys to be taken by another person who then drove the intoxicated person home.
What happens in the case where the driver was intoxicated himself? Is it fair to state that the drunk car owner would have knowingly given consent to another drunk person to drive their car?
What happens in the case where the driver had an invalid drivers license? Is it fair to state that the drunk car owner would have knowingly given consent to an unlicensed driver to operate his/her vehicle? How would the the drunk owner have known that the driver did not have a valid driver’s license. Is there an expectation for the drunk owner to ask the driver if they have a valid license and proper insurance coverage to operate a motor vehicle? (This is not a bad set of questions to ask if you ever find yourself in this situation. But keep in mind if the driver answers “no” and you still let them drive your vehicle, you will run in to coverage issues).