Fact Pattern: Mr. Blue, a Canadian resident, purchased a car in Florida, and wanted to drive it home. He purchased a binder insurance policy from ABC Insurance, which permitted him to drive the car from Florida back to his home in Toronto, Ontario, where he intended to register the vehicle. He declared the value of the car at $40,000.00. Unfortunately, while driving back to Toronto, the car slid on a patch of ice, and was totally demolished. Mr. Blue did not suffer any injuries. The insurance company only paid Mr. $30,000.00 on his subsequent claim.They relied on a provision in the policy that limited their liability to the vehicle's declared value.

Mr. Blue is suing as he believes that he is entitled to the fair market value of the car, which is $40,000.00. What will he have to demonstrate to win his claim? What arguments could ABC Insurance Company make? You are the judge. Make a decision and explain how you reached your decision.

Of Note: An Insurance Binder is a contract of temporary insurance which provides coverage until the formal policy is issued.

Cases:

1. Gordon Link v. Insurance Corporation of British Columbia

2. Tilden Rent-A-Car Co. v. Clendenning