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Insurance Law - Automobile insurance - Accident benefits - Total disability - Compulsory government schemes

Thursday, November 24, 2016 @ 7:00 PM  

Appeal by the insurer, Economical Mutual Insurance, from a judgment awarding the insured, Van Galder, interest arrears owed for statutory accident benefits. The insured was badly injured in a 2004 motor vehicle accident. The insurer paid attendant care and housekeeping benefits for non-catastrophic cases until January 2006. The insurer took the position that the medical evidence did not support a finding of a catastrophic impairment. Between 2007 and 2012, the insured filed four applications for a determination she suffered a catastrophic impairment. Following the fourth application, the insurer’s medical examiners evaluated the insured and the insurer conceded she had sustained a catastrophic impairment. The insurer paid a lump sum for the additional retroactive benefits, but refused to pay interest on the attendant care benefits, housekeeping and home maintenance benefits on the basis that no overdue amounts arose until the insured’s application and final determination in 2013. The judge ordered the insurer to pay compounded interest of two per cent per month on the benefits accruing from 2005 and 2006 on the basis the insured was catastrophically impaired since her accident, the additional amounts were therefore overdue, and denial thereof would be inequitable. The insurer appealed.

HELD: Appeal dismissed. The insured made her initial application for statutory benefits within the statutory deadlines and submitted to numerous assessments. Although the insured did not apply for a catastrophic impairment determination within the required timeline, the application judge accepted she was catastrophically impaired since the accident, entitling her to the benefits at issue beyond the 104-week period, and up to the catastrophic impairment ceiling. The insurer’s failure to recognize the insured’s impairment and entitlement to enhanced benefits did not affect the fact that those benefits were owed and overdue from 2005 and 2006 onward. The amount of the interest award was not unduly punitive or prejudicial given the compensatory nature of the SABS regime. There was no error in the application judge’s analysis, findings or conclusion. The insurer’s submission the insured was not catastrophically impaired until 2013 was raised for the first time on appeal and was therefore not entertained, as there was an insufficient factual record to determine the issue.