Executive Summary: Key Legal and Evidentiary Issues

• Sophia Khalil-Griffin's spouse was driving her vehicle at the time of the accident but had not been disclosed as a potential driver under the insurance policy.
• Because of this non-disclosure, the insurer paid only 66% of the vehicle's admitted value of $48,820.25, corresponding to the ratio of the premium collected to the premium that should have been charged.
• Disputed is whether the insurer was justified in terminating replacement vehicle coverage on February 5, 2024, on the basis that Khalil-Griffin failed to cooperate with the claims process.
• Coverage for physiotherapy costs of $459 was found to be excess to SAAQ benefits, and the claim was dismissed as premature because Khalil-Griffin did not establish that the SAAQ had refused to reimburse her.
• Non-pecuniary damages for stress and inconvenience were sought, but the court declined to award them on the ground that no bad faith was established in the insurer's handling of the claim.
• Security National Insurance Company intervened voluntarily and agreed to satisfy any judgment rendered against the defendants.

Facts of the case

On January 2, 2024, Émile Archambault, the spouse of Sophia Khalil-Griffin, was driving her vehicle when an accident occurred, resulting in the vehicle being declared a total loss. At the time the policy was issued by Security National Insurance Company (the Insurer), Archambault had not been disclosed as a potential driver. Khalil-Griffin explained that she believed disclosure was unnecessary because he normally walked to work, and that his driving on the day of the accident was exceptional due to fatigue related to her pregnancy. The insurer's investigation began on January 4, 2024, and the claims adjuster, Ms. Clarke, received the file on January 24, 2024. Through a series of email exchanges between January 25 and February 8, 2024, the insurer sought information including vehicle registration, loan balance, and details about Archambault's driving and insurance status. On April 1, 2024, the insurer transmitted its assessment of the amount payable to Khalil-Griffin.

Policy terms and contractual clauses at issue

Three provisions of the policy were contested. First, under Article 2411 of the Civil Code of Québec, where a risk is not fully disclosed, the insurer may indemnify the insured proportionally — "in the ratio of the premium collected to the premium that should have been charged." Second, the policy included a replacement vehicle coverage provision, which the insurer relied on to cease providing a rental after February 5, 2024, citing a duty to cooperate. Third, the policy contained an endorsement covering physiotherapy expenses, but only to the extent such costs exceeded amounts covered by the Société d'assurance automobile du Québec (SAAQ), making that coverage excess in nature. The policy also provided the insurer a 60-day period to indemnify the insured from the date it received the required information, which was February 8, 2024.

Reasoning and analysis

On the first issue, the court upheld the insurer's proportional payment. The insurer did not allege bad faith on Khalil-Griffin's part, nor did it claim it would have refused coverage had it known of Archambault's driving. Uncontradicted evidence established that the insurer would have charged a premium 34% higher to include Archambault as an occasional driver. Accordingly, paying 66% of the vehicle's value — amounting to $32,221.38 — was consistent with the applicable proportional indemnity rule.

On the replacement vehicle issue, the court rejected the insurer's non-cooperation argument. Under established Quebec appellate authority (Promutuel Assurance Boréale c. McKnight, 2022 QCCA 1735), a finding of non-cooperation requires a showing of bad faith and resulting prejudice to the insurer. The court found neither. Khalil-Griffin never concealed the identity of the driver, provided her vehicle registration the day after it was requested, and confirmed Archambault's details promptly. The court also noted that Khalil-Griffin responded to all requests in less time than it had taken the insurer to arrange the vehicle inspection. The insurer's email of February 1, 2024 — suggesting a failure to cooperate in response to what the court described as a valid and polite inquiry — was characterized as inappropriate. Because Khalil-Griffin was financially unable to rent a replacement vehicle, she relied on public transit and her mother for transportation, a situation made particularly difficult given that she had a newborn to transport. The court assessed the relevant period as February 6, 2024 to April 6, 2024, the latter date allowing reasonable time for her to consider the insurer's April 1, 2024 settlement offer.

Regarding physiotherapy, the court found the policy's endorsement clearly made such coverage excess to SAAQ benefits. Since Khalil-Griffin did not establish that the SAAQ had refused to reimburse all or part of her $459 in physiotherapy costs, her claim was dismissed as premature. On the question of non-pecuniary damages for the insurer's overall claims handling, the court found no bad faith. While the insurer's communication could have been more measured, the court held that the consequences of that conduct were adequately addressed through the replacement vehicle indemnity award.

Ruling and overall outcome

The court granted Khalil-Griffin's claim in part. The defendants — Compagnie d'assurance habitation et auto TD, Meloche Monnex Inc., and Premium Insurance Company — were condemned jointly and severally with Security National Insurance Company to pay Khalil-Griffin $2,000 with interest and the additional indemnity provided by law from March 19, 2025, plus judicial costs of $237.00. The claims for the remaining 34% of the vehicle value, physiotherapy reimbursement, and standalone non-pecuniary damages were dismissed. Khalil-Griffin was the successful party with respect to the replacement vehicle indemnity.