An Ontario court has ruled that auto insurers' excluded driver exclusions extend to vehicles never listed on the policy.
The Ontario Superior Court of Justice granted summary judgment to Definity Insurance on July 29, 2026, dismissing a third-party claim by Allstate Insurance over responsibility for a motor vehicle accident.
The dispute centred on the scope of the standard excluded driver endorsement, known as OPCF 28A, used across Ontario auto policies. Definity had issued an owner's policy naming two individuals as insureds in 2014, with a $1 million liability limit. In September 2017, one of them requested the excluded driver endorsement, covering whichever vehicles were listed on the policy, and it took effect that October. Weeks later, the policy was amended to list a Toyota Rav 4 as the only insured vehicle, a status it kept through later renewals.
In April 2019, the other named insured asked his agent to remove the excluded driver from the policy after the two were no longer living together. The agent processed the removal, but Definity later conceded that the termination letter it sent on April 23, 2019 did not meet Ontario's statutory conditions, meaning the removal was never valid. The excluded driver therefore remained on the policy in that capacity.
That September, the excluded driver was involved in an accident while driving a vehicle owned by a co-defendant, not the Rav 4 or any vehicle described on the policy. She allegedly struck a vehicle driven by the plaintiff, who was insured by Allstate. Allstate initially treated her as uninsured, then discovered the Definity policy, defended the claim, and brought a third-party claim seeking a declaration that Definity was liable.
The central legal question, which the court described as "a question of first instance," was whether the OPCF 28A exclusion - which does not expressly mention other automobiles - nonetheless applies to vehicles outside the described, newly acquired, or temporary substitute categories. Allstate argued the exclusion should be read narrowly, and that if insurers wanted to exclude coverage for other automobiles, they needed to say so explicitly on the form.
Justice Kalajdzic disagreed. The decision found that the OPCF 28A form incorporates the broader definition of the automobile set out in the standard policy wording, OAP 1, which includes other automobiles. Reading sections 225 and 240 of the Insurance Act together with the endorsement, the court concluded that an insurer has no liability when an excluded driver is behind the wheel of any automobile insured under the contract, including one merely owned by someone else. Requiring the insured to promise an excluded driver won't drive any other vehicle in existence, the court noted, would be an impossible undertaking.
For insurers and claims professionals, the ruling confirms that an excluded driver exclusion under Ontario's standard auto forms is not limited to the vehicles actually named on a policy - it also reaches vehicles owned by unrelated third parties. It also underscores the stakes of getting removal notices right: because the termination letter did not meet regulatory requirements, the excluded driver designation stayed in effect through the date of the accident.
Definity is presumptively entitled to costs of the motion, with cost submissions due from Definity by August 14, 2026, and from Allstate by August 28, 2026.
