Auto insurance: How you can live with someone but not be in a “household”

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A passenger seriously injured in an auto collision caused by an uninsured driver is not considered an “insured” under her father’s or boyfriend’s auto policies, even though she was living with them at the time of the crash, B.C.’s Court of Appeal has confirmed.

The court upheld an arbitrator’s finding that the injured passenger’s living arrangement with her father and boyfriend at the time of her crash was temporary, pending her emotional recovery from the loss of her 22-year-old son.

The arbitrator ruled her intention to move in permanently with her boyfriend did not change the fact her living arrangement at the time of the crash was exceptional and not the norm.

“The relationship between the claimant and SC [her boyfriend] was in its early stages such that the purpose of their residing together was temporary so as to allow the claimant time to recover from the loss of her son, at which time SC would return to his own residence,” the arbitrator initially ruled in June 2023. “While they may have resided together, it cannot be said they were ordinarily residing together.”

Similarly for the claimant’s father, the arbitrator ruled, he “stayed with the claimant on a temporary basis for the specific purpose of providing emotional support to her, on the mutual understanding that he would return to his permanent home once she was functioning better.”

B.C.’s Court of Appeal upheld the arbitrator’s ruling, saying it only grants appeals when arbitrators apply the law incorrectly. It does not hear appeals related to cases that mix facts and law.

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“The essence of the [injured passenger’s] complaint does not relate to the legal test to be applied under the [Underinsured Motorist Protection, or UMP] legislation — which was not in dispute at the arbitration — but rather with the outcome of the arbitrator’s application of that test to the evidence before him,” the B.C. Court of Appeal ruled in September, as reported on Canlii Connects in November.

“The arbitrator recognizes the benefit-conferring nature of the UMP legislation and the need to interpret it broadly and generously in favour of [the injured passenger]. However, he concludes, that this principle does not allow him to ignore the evidence adduced…

“The [injured passenger’s] real complaint is that the arbitrator’s application of the test should have led to a different outcome. This raises a question of mixed fact and law, and not a question of law.”

Related: Insurers disagree over meaning of ‘household’ in policy language

In Mazzei v. Insurance Corporation of British Columbia (ICBC), Sebrina Mazzei suffered serious injuries on Dec. 7, 2019, when she and three other persons were riding as passengers in a vehicle that left the roadway and went down an embankment while travelling near Oyama, B.C.

The driver of the vehicle at fault for the collision did not have third-party liability insurance coverage.

ICBC agreed to pay Mazzei $50,000 for her claim. It further consented to arbitration to determine if Mazzei was considered an insured driver for the purpose of making a claim under the UMP legislation.

UMP is a policy administered through ICBC as part of the province’s Basic Autoplan insurance. The purpose of UMP is to provide injured people with financial support if the driver at fault for the collision does not have enough insurance coverage to meet the costs.

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Although Mazzei did not have a driver’s licence at the time of the crash, nor did she have her own auto insurance policy, she claimed she met the definition of insured for the purpose of UMP because she was a member of the household of a person who was named in an auto insurance policy.

Section 148.1 of the UMP defines “insured” as including a “member of a household” of a person named as the owner in an owner’s certificate or a person holding a driver’s licence. “Household” is defined in s. 1 of the regulation to mean “a person ordinarily dwelling in the same dwelling unit.”

Mazzei’s father and her boyfriend were both named in auto insurance policies.

“The issue in the arbitration was whether [Mazzei] and [her father and boyfriend] formed a ‘household’ with [Mazzei] and were ‘ordinarily residing’ in the one-bedroom apartment where [Mazzei] lived in Vernon…at the time of the accident,” as the appellate court summarized.

Before the arbitrator, Mazzei argued that since September 2022, “she and her parents and boyfriend all lived as a family unit, as evidenced by everyone contributing to the functioning of the household, including buying groceries, cooking and cleaning.”

The living arrangement formed after Mazzei’s son passed away in July 2019 at the age of 22, court documents show. She said the “temporary” nature of the household was of no consequence because the UMP doesn’t require a need for “permanent” residency.

But the UMP law does reference the term “ordinarily,” the court noted. And both the father and boyfriend were not “ordinarily” living in her residence.

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