Alberta Court Of Appeal Requires There To Be Contact Between Cars To Trigger Family Protection Endorsement Coverage

People purchasing automobile insurance in Alberta are able to purchase an optional piece of coverage known as the Family Protection Endorsement, or SEF 44, which provides them and their family members with excess insurance to cover damages over $200,000 in the case that the driver of a car they are in an accident with only carriers minimum insurance. A recent decision from the Court of Appeal of Alberta addressed whether an actual collision is necessary to trigger SEF 44 coverage.

The accident

The insured had purchased a standard automobile policy from the insurer, which included SEF 44 coverage. On May 20, 2008, he was operating his vehicle at night, driving on the side of the road. He had noticed an oncoming vehicle, but was not concerned because there was enough space for the two vehicles to pass. However, as the other car came closer, the insured claimed the other driver began to cross over the road towards him, leading him to swerve to avoid a collision. His vehicle rolled over in the ditch, avoiding contact with the other car. He suffered serious injuries as a result of the accident and was paid the statutory limit of $200,000. He also claimed additional payments under the SEF 44 coverage in his policy.

The insurer denied any further payments, arguing “physical evidence indicating the involvement of an unidentified automobile” and “physical contact of such automobile with the automobile of which the insured person is an occupant” are required in order to trigger coverage under SEF 44.

At trial

The trial judge found there to be no coverage on the face of the SEF 44 endorsement because there was no physical contact with the vehicle. However the trial judge also found that the insured was entitled to indemnity for his injuries because in order to meet the requirements of his coverage, he would have had to commit a tort by ensuring he made physical contact with the other drive. The judge wrote, “ the insured who avoids physical contact has no coverage under the endorsement, but the insured who takes no evasive action and physically contacts the unidentified vehicle has coverage.” As a result, the judge, relying on the Judicature Act, extended coverage to the insured notwithstanding his noncompliance.

On appeal

The insurer appealed the trial judge’s decision. The court found that the trial judge’s decision, which involved the judge proactively stepping around the terms of the insurance policy “runs the risk of throwing any semblance of certainty out the window.” The court found it necessary to follow the words in the policy, writing “The Endorsement provides for insurance coverage if certain defined risks emerge, and excludes coverage if those risks do not emerge. The Endorsement does not require the (insured) to do anything, much less commit a tort. If an unidentified motorist had negligently made contact with his vehicle, the (insured) would have been entitled to indemnity for his damages, but the (insured) was not entitled to indemnity for damages for any uncovered risks.”

While the trial judge found that the insured would have had to commit a tort by ensuring contact was made with the other car, the court outlined a number of scenarios in which contact could have accidentally have been made, including the insured panicking or freezing in the moments before a collision.

The court allowed the appeal and the trial judge’s decision as overturned.

If you find yourself seriously injured following an automobile accident, your first step should be to speak to a qualified and experienced personal injury lawyer. At Derfel Injury Law we assist our clients in claims for damages stemming from automobile accidents, helping our clients identify every potential avenue for compensation. Please contact us by phone at 416-847-3580 or online to talk to us today.