Nowakowski v. Campbell
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The Facts
Two people were registered joint owners of a vehicle, and only one of them had a policy on it, with Economical. A third person was driving when an accident happened. That driver, and the second co-owner, were not named insureds or listed drivers on the policy. The injured plaintiff sued the owners, the driver and her own insurer, Allstate. The parties asked the court to decide the issue before trial on an agreed statement of facts. Economical argued that the policyholder personally had to consent to the driver having the vehicle before owner liability arose under the Highway Traffic Act and before its policy responded under the Insurance Act. The motion judge rejected that argument and found that the Economical policy responded to the claim against the policyholder. Economical appealed.
What the Court Decided
A three-judge panel dismissed the appeal. Section 192(2) of the Highway Traffic Act makes the owner of a motor vehicle responsible for loss caused by negligent operation of the vehicle by someone in possession of it with the owner's consent. The Court held that where there are two owners, the reference to 'the owner' includes 'the owners', so if either co-owner consented to a non-owner's possession, both are vicariously liable. Economical was right on one point: section 239(1) of the Insurance Act does not itself create liability for an owner. It requires only that liability imposed by law on an owner be covered by that owner's own policy. That mistake made no difference. Because both owners were liable under the Highway Traffic Act, section 239(1) required the Economical policy to cover that liability. The decision concerns the owners' vicarious liability and the response of the owner's policy. It does not decide how fault for the accident was divided or what damages are owed.
Families and partners often co-own a car while only one person deals with the insurer, and many accidents involve someone who is not on the policy. This ruling tells injured people that an owner's policy can respond even when the driver is not listed, and tells owners that one person's permission can expose both of them. It also reduces the room for an insurer to deny a claim on the basis that the particular owner on the policy did not personally authorize the driver.
Does This Affect You?
- ✓You co-own a vehicle and someone else has been driving it, with or without your personal permission.
- ✓You were injured by a vehicle driven by a person who is not named on the owner's policy.
- ✓An insurer has denied a claim because the driver was not a listed driver or the policyholder did not give consent.
Key Takeaways
- Consent by either co-owner to a non-owner having the vehicle can make both owners vicariously liable under the Highway Traffic Act.
- The owner's policy must respond to that owner liability even if the driver is not a named insured or listed driver.
- Owners who share a vehicle should treat consent given by a co-owner as consent by both for liability purposes.