Traveling insureds beware: know the jurisdiction of your policy

Insurance law – Automobile insurance – Territorial limitations – Underinsured motorist – Practice – Appeals – Standard of review – Summary judgments – Availability

Wage v. Canadian Direct Insurance Inc., [2020] A.J. No. 139, 2020 ABCA 49, Alberta Court of Appeal, February 4, 2020, B.L. Veldhuis, F.L. Schutz and M.G. Crighton JJ.A.

The insured pedestrian was struck and killed by a motorcycle while vacationing in the Philippines. The insurer denied coverage on the basis that the motor vehicle that killed the insured was not “in Canada, the United States of America or upon a vessel plying between ports of those countries,” as set out in the wording of the policy’s territorial limitation provision.

The insured’s spouse and estate brought an action against the insurer claiming coverage under two sections of the policy: section B, which provided prescribed benefits to insureds following an accident, and SEF No 44, which provided underinsured motorist coverage. The insurer appealed after its application for summary dismissal was dismissed by a master and again in the Court of Queen’s Bench.

On appeal, the sole issue was whether the territorial limitation provision contained within the Alberta Standard form SPF No 1 motor vehicle insurance policy applied to deny coverage under both section B of the policy and SEF No 44. The appeal was allowed and the action dismissed on the basis that the territorial limitation provision was contained within the general provisions, which applied to the policy as a whole, including SEF No 44 and Section B.

This case was digested by Jaeda B. Lee, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Jaeda B. Lee at jlee@harpergrey.com.

To stay current with the new case law and emerging legal issues in this area, subscribe here.