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Insurance Law - Automobile insurance - Accident benefits - Deductions

Thursday, December 08, 2016 @ 7:00 PM  

Appeal by the insured, Hamblin, from refusal of declaratory relief against her insurer, Standard Life. The appellant received non-earner benefits (NEBs) from her automobile insurer, a non-party to the litigation, in connection with a 2013 accident. The appellant also received long-term disability (LTD) income payments from the respondent insurer in connection with a prior 2011 accident. The appellant was not working at the time of the second accident. In order to qualify for the NEBs, she was required to show a complete inability to carry on a normal life within 104 weeks after the accident, and that she did not qualify for an income replacement benefit. Although the appellant’s automobile insurer was entitled to deduct the LTD payments from the NEBs, it did not do so. However, the respondent determined it was entitled to reduce its LTD payments by the amount of the NEBs. The appellant sought a declaration that the NEBs were not deductible from the LTD payments. The application judge found in favour of the respondent, as the deduction of the NEBs was consistent with an LTD indemnity policy. Hamblin appealed.

HELD: Appeal dismissed. The application judge’s interpretation of the LTD policy was correct. There was no dispute that NEBs were payable under provincial auto insurance law and clearly constituted disability benefits deductible under the LTD policy. The policy language was clear and unambiguous, and mandated the deduction. A deduction permitted by the plain language of the policy did not constitute a windfall for the insurer.