Amour v Security National Insurance Company, 2025 ABKB 726 (“Amour”) is an important Alberta decision for those dealing with property damage claims under automobile policies. In Amour the Court held that a person is not automatically an “occupant” of a vehicle for the purpose of an exclusion clause. In this case, the Court confirmed that the intention of the occupant matters.
The Amour decision may limit an insurer’s ability to deny coverage where an insured is physically in a vehicle but did not intend to be in it under the circumstances that led to the loss.
In this case, the Plaintiff was driving his vehicle from Ontario to his home in Alberta with two friends. The Plaintiff had an Alberta insurance policy (the “policy”). The Plaintiff became fatigued, stopped at a rest area, put the keys in the centre console, and went to sleep in the back seat. He instructed one friend to drive when he woke up.
Instead, the other friend, whose driver’s licence was suspended and who did not have the Plaintiff’s permission to drive, woke up first, took the keys, and started driving. Ultimately, this driver fell asleep at the wheel and hit a rock.
It was agreed by all parties that the driver at the time of the loss did not have consent of the owner to drive the vehicle.
This decision only considered Section C (property damage) coverage and whether the insurer could deny coverage based on exclusion 3 of the automobile policy. The exclusion says, “no person shall be entitled to indemnity or payment under this Policy who is an occupant of any automobile which is being used without the consent of the owner thereof.”
The policy defined an occupant as “a person driving, being carried in or upon or entering or getting on to or alighting from an automobile.” The insurer argued that because the Plaintiff was “being carried in” the vehicle, he was automatically an occupant.
The Court rejected that interpretation. The Court held that the definition of occupant involved intention and at least some active participation. The Court held the exclusion created ambiguity as to whether mere physical presence, without intention, was enough and due to the ambiguity, the exclusion was interpreted narrowly.
In this case, the Plaintiff had only agreed to be in the vehicle if a different, specifically identified, licensed friend was driving. Ultimately, the Court said “an occupant can only be an occupant if they intend to be an occupant. If an individual is unable to make a decision about being in a vehicle that is being driven because they are asleep in the vehicle or perhaps forcibly placed into and confined in the vehicle, they cannot be an occupant for the purposes of the exclusion.”
It was important to note that section 574(1)(b) of Alberta’s Insurance Act prevents insurers from relying on defences that would not be available under another province’s policy wording. The insurer could not deny coverage by relying on the Alberta exclusion when they would be unable to do so on the basis of the Ontario exclusion. In this case however, the Plaintiff could not have been a willing occupant under the language used in the Ontario exclusion either.
Lastly, the Court took a final step and held that even if it were wrong about the interpretation of “occupant” or the application of section 574 of the Insurance Act, then section 545 of the Insurance Act would still allow the Court to refuse to enforce the exclusion because it would lead to an unjust or unreasonable result.
The judge gave an example: a person kidnapped in their own car would be physically in the vehicle, but it would be absurd to deny coverage to them in the event of a loss simply because they were in the car.
The Takeaway for Insurers, Adjusters, and Insureds
This decision confirms that physical presence alone is not enough to be an occupant, as that term is currently used in automobile policies in Alberta, and that intention of the individual matters.
For exclusion clauses based on “occupancy”, the following should be considered:
Courts will look at whether the person intended to be an occupant in the circumstances;
Exclusions will continue to be interpreted narrowly if there is ambiguity;
The Insurance Act can prevent insurers from relying on an exclusion in an Alberta policy when an accident happened elsewhere and where that defence would not be available under the other province’s policy wording; and
The Insurance Act’s intent is to not deny coverage when it would lead to an unjust or unreasonable result.
