Driver Seeks To Recover US Legal Fees Under Canadian Insurance Following A Motor Vehicle Accident

Travelling abroad can be a wonderful experience and a great way to spend one’s time. However, when accidents occur while traveling, people may find themselves engaged in a confusing and difficult to navigate situation. Such was the case in a decision from the Ontario Court of Appeal.

The accident and the state’s insurance

The situation before the courts involved a married couple traveling through Minnesota on a motorcycle. An accident occurred when their motorcycle was struck by a vehicle owned by the State of Minnesota. The couple retained a lawyer in Minnesota and sued the state for damages.

The state’s insurance policy had a single occurrence limit of $1,500,000 (USD), though it limited the amount payable to any single claimant at $500,000 (USD, inclusive of legal fees). The husband’s damages exceeded $500,000, but he was not able to claim any more than that from the state. Additionally, after paying his legal bill, he was left with $386,500 (CDN). In order to cover the difference between his damages and what he actually received, the husband made a claim against his personal motor vehicle insurance in Canada, which included Family Protection Coverage, known as SEF 44. His SEF 44 coverage was in the amount of $1,000,000.

His insurance company denied his claim, arguing that SEF 44 claims require the driver of the other vehicle to be “underinsured.” The insurance company found the state’s insurance to be adequate since it was for $1,500,000.

The husband sued, and at trial the motion judge found the state to be “underinsured,” and that the driver was an “inadequately insured motorist.” The motion judge also found that the husband could recover his legal fees under his Canadian insurance. The husband’s insurance company appealed the motion judge’s decision.The court had two issues to address. The first was whether the driver was an “inadequately insured motorist.” The second was whether the husband would be able to recover his legal expenses through the SEF 44 insurance.

Was the driver an “inadequately insured motorist”?

The court agreed with the motion judge that the driver of the vehicle was an “inadequately insured motorist.” The intent of the policy was to put the victim in the same position he would have been in had the other driver been insured in the same amount. The court noted that the state’s insurance put an individual cap of $500,000 towards damages for any single claim arising out of a single occurrence. A simple understanding of SEF 44 coverage led the court to decide that the husband was entitled to receive the amount under his policy above the amount available to him from Minnesota.

Did the motion judge err in permitting the husband to claim his legal fees?

The court found that the wording of the SFF 44 coverage stated that the amount available to the policy holder would be the amount of damages minus any funds obtained as compensation from the other driver. The state’s insurance provided up to $500,000 in damages, which went to the husband. The SEF 44 policy did not provide for deductions from that amount in order to cover legal fees. In order to do so, legal fees would have needed to be awarded as a special expense.

When you travel, you do everything you can to stay save and avoid accidents. But despite careful planning, injuries can still occur. The experienced personal injury lawyers at Derfel Injury Law have over a decade of experience in dealing with the insurance industry and claims for clients who have suffered accidents aboard. If you find yourself hurt while traveling we can help you recover any and all compensation you are entitled to. Please call us at 416-847-3580 or reach us online to discuss how we can help you today.