UMP coverage available to satisfy judgment under a claim commenced pursuant to the Family Compensation Act is limited to the deceased’s policy limit

In British Columbia an insured is entitled to $1,000,000.00 of uninsured motorist protection. In an action commenced under the Family Compensation Act, the total entitlement to uninsured motorist benefits remains at $1,000,000.00, despite the fact that there may be more than one insured entitled to damages in the action.

Lougheed v. Co-operators General Insurance Co., 2007 BCCA 503, British Columbia Court of Appeal, L.S.G. Finch C.J.B.C., R.E. Levine and P.D. Lowry, October 18, 2007

Cameron Lougheed was a passenger in a vehicle in which the driver lost control, resulting in an accident that killed Mr. Lougheed. The vehicle was insured by Co-operators General Insurance Co. under a policy issued in Alberta, where the driver resided. Under its terms, coverage for third party liability was limited to $500,000.00. Mr. Lougheed’s sons obtained Judgment and proceeded to an underinsured motorist’s protection arbitration to determine their entitlement to benefits. Although $1,000,000.00 of underinsured motorist protection coverage is mandatory in British Columbia, Mr. Lougheed’s sons claimed that they were each entitled to $1,000,000.00 of underinsured motorist protection coverage under the British Columbia legislation, as opposed to $1,000,000.00 in total. The trial Judge determined that if Mr. Lougheed had survived, he could have recovered no more than $1,000,000.00 underinsured motorist protection for his injuries, and that his sons were therefore limited to the $1,000,000.00 underinsured motorist protection that Mr. Lougheed was entitled to, not $1,000,000.00 each. The matter was appealed to the British Columbia Court of Appeal.

The underinsured motorist protection is found in Part 10, Division 2 of the Revised Regulation (1984) under the Insurance (Motor Vehicle) Act, B.C., Reg, 447/83 promulgated under the Insurance (Motor Vehicle) Act, R.S.B.C. 1996, c. 231 [now the Insurance (Vehicle) Act]. At the date of the accident, the limit of coverage for underinsured motorist protection was $1,000,000.00 per insured person. The issue to be determined by the trial Judge was that the insured person was Mr. Lougheed as opposed to Mr. Lougheed’s sons (as well as his spouse). The Court of Appeal noted that the action brought by Mr. Lougheed’s sons, and his spouse, was a Family Compensation Act action, and as such the action had to be commenced by the personal representative of Mr. Lougheed on behalf of all the beneficiaries. The key to the Family Compensation action was that the action must be treated as a single cause of action brought on behalf of all Mr. Lougheed’s beneficiaries. The Court determined that the “insured” referred to in the Regulations must be the personal representative who is the individual entitled, either directly or indirectly, to maintain a Family Compensation action as a result of the death of Mr. Lougheed, and not each of the beneficiaries. The British Columbia Court of Appeal dismissed the Appeal, and upheld the trial Judge’s finding that the beneficiaries were entitled to a total of $1,000,000.00 in underinsured motorist protection coverage.

This case was originally edited by David W. Pilley.

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