When it comes to insurance, people may want to assume that their insurance provider has registered them with the coverage they need in the event of an automobile accident or other type of serious personal injury. Unfortunately, insurance policies can be complicated, and people don’t always know exactly what they are entitled to under their coverage or what they might not be entitled to but believe they are. This is one of the reasons why it is so important to work with an experienced insurance lawyer in the event that you or a loved one are injured. 

In a recent case heard by the Court of Queen’s Bench of Alberta, a man injured in a motor vehicle accident was not aware that an optional policy could have been purchased, which would have provided him with additional coverage. His insurer tried to argue that he was too late to pursue it. 

Additional coverage discovered well after the accident

While many drivers have good insurance coverage for their car, accidents can and do happen involving drivers who are under-insured or not insured at all. Under Alberta law, the maximum someone can claim against an individual who is uninsured or underinsured is $200,000. However, SEF 44 coverage is a type of insurance policy which allows someone injured in such a situation to recover additional damages from their own insurer. Think of it as insurance against someone else not having enough insurance. 

The driver was the plaintiff in the matter. He was involved in an accident on July 31, 1998. He commenced an action on July 5, 2000, seeking damages of $51,000. On September 9, 2003, he filed an Amended Statement of Claim to the original action in the amount of $251,000. Six years later, he did so again, increasing his damages claimed to $634,500. This was settled on October 31, 2017. However, the plaintiff returned to court for action under his SEF 44 endorsement on December 20, 2018. His insurer argued that he was statute barred from doing so under the SEF policy.

The insurer alleged the plaintiff did not follow the policy rules

The plaintiff’s SEF 44 endorsement stated:

Every action or proceeding against the insurer for recovery under this endorsement shall be commenced within 12 months from the date upon which the eligible claimant or his legal representative knew or ought to have known that the quantum of the claims with respect to an insured person exceeded the minimum limits for motor vehicle liability insurance in the jurisdiction which the accident occurred. No action which is commenced within 2 years of the date of the accident shall be barred by this provision. 

The insurer told the court that the plaintiff knew or ought to have known that his claim exceeded the minimum coverage limits of $200,000 and that he waited more than the 12 months allowed under the policy to make his claim.

Plaintiff says the policy contravenes the Limitations Act

The plaintiff agreed that there is a limitation period in play, but that the province’s Limitations Act provides for a two-year period window in which to bring an action. 

The first question the court answered was when the limitation period started. The insurer told the court there were three possible dates. The first was September 9, 2003, when the plaintiff amended his claim to seek $251,000. The second date was the day he amended the claim to seek damages of $634,500. The third date, which the plaintiff supported, was on October 31, 2017, when the underlying tort action was discontinued following a settlement. 

Citing case law, the court followed previous decisions which stated that the limitation for SEF 44 claims period should commence once a claim has been settled or determined in court. It would be premature to pursue SEF 44 before that. The court did not rule out the possibility of this ever occurring, but did state that in this case, the 2017 date should be considered the time at which the limitation period began. Additionally, the court could not infer when the plaintiff’s lawyer knew or ought to have known that a SEF 44 claim should have been filed.

Does the limitation period last for one year or two?

The defendant relied on the SEF 44 provision, which states that the limitation period is one year. As we mentioned before, the plaintiff argued the provision cannot reduce the limitation period provided by the Limitations Act. While this specific contradiction in time limits had not yet been brought before courts, there was a case with a similar enough set of facts that the court could rely on. That decision, from 2011, stated:

“An action or a proceeding against an insurer in respect of insurance under a contract…must be commenced within the limitation period specified within the contract, but in no event may the limitation period be less than two years from the occurrence of the accident.”

The court agreed that while people can enter into contracts to extend limitation periods, they cannot do so if the result would be to shorten a limitation period. As a result, the court ordered that the plaintiff be allowed to pursue his claim. We will be sure to report back if there are further appeals in this that warrant updates to our readers.

HMC Lawyers can help ensure you don’t miss critical dates for your insurance policy claim

At HMC Lawyers, our experienced insurance lawyers have decades of collective experience in representing clients in matters related to insurance law, including those injured in motor vehicle accidents. We understand the risks involved in every step of the litigation process and work with our clients to help identify and avoid potential problems with their claims. To find out what you might be able to expect from an insurance-related dispute or to find out how we might be able to help you through the negotiation or litigation process, please don’t hesitate to contact us online or by phone at 403-269-7220.