It’s unfortunate to think about, but accidents can occur when on vacation. It’s understandable that people might assume their insurance benefits are available to them while traveling. However, the family of an Alberta woman who was vacationing overseas recently found out from a decision from the Court of Appeal of Alberta they won’t be able to claim insurance benefits after a car accident in the Philippines.

The accident

The insured was a pedestrian on vacation in the Philippines when she was struck and killed by a motorcycle. Her spouse and her estate (the “plaintiffs”) sued her insurance company claiming entitlement to Section B benefits and damages pursuant to their SEF 44 Endorsement, which is available to provide indemnity to insured people who suffer injuries caused by an inadequately insured motorist, such as the driver of the motorcycle.

The insurer denied the claim and requested a summary dismissal of the action on the grounds that the insured’s vehicle was parked in Edmonton when the accident occurred and that she was not “in Canada, the United States of America or upon a vessel plying between ports of those countries” as stated in the policy’s territorial limitation provision.

During the initial trial, a master in chambers ruled that the territorial limitation provision does not apply to Section B of the policy, and the general exclusions do not apply to the SEF 44 Endorsement.

The insurer appealed to the Court of Queen’s Bench, but the appeal was dismissed. They then appealed to the Court of Appeal.

On Appeal

The appeal focused on whether the meaning of “automobile” in the SEF 44 Endorsement and the meaning of “insured person” in Section B of the policy and the application of the policy’s territorial limitation provision.

In focusing on the territorial limitation provision, the court held that it applies to the entire policy, including the SEF 44 Endorsement. The court wrote, “the policy’s territorial limitation applies to the whole policy, of which the entire SEF 44 Endorsement forms a part. Thus applied, the territorial limitation restricts its coverage territorially, in the same manner, and to the same extent as applied to the underlying policy,” adding that the SEF 44 Endorsement is not travel insurance.

Since the territorial limitations provision applied to the SEF 44 Endorsement, and that the Endorsement is part of the general provisions of the policy, there was no coverage available. Similarly, coverage was also not available under the Section B benefits.

The decision is worth noting in that it underscores the importance for travelers to check with their insurance providers before traveling abroad. It would be terrible to be caught in a situation where insurance benefits are needed but not available.

At HMC Lawyers our Insurance Team has decades of collective experience and a deep, thorough understanding of potential risks as well as legal issues that commonly arise in insurance coverage disputes. We also have experience dealing specifically with disputes and injuries arising from motor vehicle accidents. To discuss an insurance coverage matter or related dispute, call 1-800-480-3534 or contact us online.