One of the most serious concerns for people involved in automobile collisions or other accidents leading to personal injury is the chance of losing income due to disabilities arising from their injuries. For people seriously injured, Section B total disability benefits can provide much-needed income following an accident. But as we saw in a recent decision from the Provincial Court of Alberta, it’s important to understand the details involved in calculating benefits.
The injured party does not collect the benefits they were expecting
The plaintiff was injured in a motor vehicle accident and applied for Section B total disability benefits. Her insurer, the defendant in the trial, paid her disability benefits of $180.14 per week. The plaintiff argued that the insurer was not paying her what she was entitled to, and asked for the allowable maximum of $400 per week.
The disagreement was over the interpretation of “average gross weekly earnings”, which is the calculation used to determine someone’s benefits under the Alberta Automobile Accident Insurance Benefits Regulation. The plaintiff told the court she had only been working for her employer for two weeks when the accident occurred but had worked for another employer for about 20 weeks prior to her new job. The plaintiff’s position was that her weekly earnings average should have taken both of her jobs into account by totaling the amount of money she made between both jobs and dividing it by 22 (the number of weeks worked).
Instead, the insurer added the money she made from both jobs and divided it by 52, considering the 30 weeks the plaintiff had no income. The insurer asked the court for a summary dismissal of the action.
Should average gross weekly earnings include weeks where the injured party did not work?
The Act states that weekly benefits should be the greater of two calculations. The first is the “average gross weekly earnings from an occupation or employment for the 4 weeks preceding the accident” while the second is the “average gross weekly earnings from an occupation or employment for the 52 weeks preceding the accident.”
The insurer argued it was simply a matter of calculating weekly earnings by 4 or 52 weeks, and that it based its calculations on the average gross weekly earnings during the 52-week period. They cited two Ontario decisions that support their position, including one where the court was asked to determine whether the calculation should be based on weeks worked or 52 weeks. In that case, the court found that all weeks counted, not just weeks worked.
The plaintiff that the sentence “average gross weekly earnings from an occupation or employment” means that only weeks where the injured party was employed should be factored in. She cited decisions from PEI and Ontario in support of her position.
The court spent some time defining the applicable individual words in the policy, focusing on the “gross” and “weekly,” finding that there is no mention of weeks worked, but simply a gross weekly average. As a result, the court found the policy clearly means that the calculation should be based on the average weekly income over the span of the year. The court sided with the insurer and dismissed the matter.
The exceptional insurance lawyers at HMC Lawyers in Calgary have successfully argued personal injury cases in front of Alberta’s courts and defended against claims for serious bodily injury at all levels of courts throughout Western Canada. We work with both Canadian and international insurance providers to defend against claims for serious bodily injury. To speak with a member of our Insurance team about a bodily injury defence claim, contact us online or call 1-800-480-3534 today.