Conflicting Limitation Periods for Car Accident Insurance Claims

By Roger Foisy on September 14th, 2011

The car accident insurance case, Whorpole Estate v. Echelon General Insurance Co., [2011] O. J. No. 1644 (S. C. J.) has brought up the issue of conflicting limitation periods, where more than one limitation period exists and a decision must be made over which applies. In particular, this case shows the conflict between a limitation period according to the Trustee’s Act and one according to the Insurance Act.

The Insurance Act states that a claim against the insurer for loss or damage to a vehicle can be made within a year of the accident, but the Trustee Act gives the executor of the deceased, in this case the plaintiff, the right to extend this limitation period to two years.

To summarize the case, the plaintiff’s sister died in a car accident in Ontario on October 3, 2007 and her vehicle was a “write off”. The insurance company determined the value of the vehicle and sent an offer to the plaintiff in February 2008. The plaintiff got his own estimate and sent it back to the insurer in May 2008, believing that there was never an issue with the insurance company paying him for the damages. With no response from the insurer, he resubmitted the estimate in September 2008 and faxed it to them on October 3, 2008. The insurance claim was then rejected by the insurer on October 9, 2008. In April 2009, the damaged car showed up on the plaintiff’s driveway.

On October 1, 2009, almost two years after the date of loss, the plaintiff issued a Statement of Claim for damages on the vehicle and damages for bad faith on the part of the insurance company, occurring when the insurer refused benefits for a reasonable claim. In response, the insurance company filed for summary judgement, to avoid a full trial, based on the belief that the one year limitation period for this car accident insurance claim had ended and the claim was void.

While the court raised the possibility that the Trustee Act extended the limitation period from one year to two years, the court decided the case on the basis of the limitation period being extended to the two year mark because of the bad faith claim as against the adjuster. Based on this reasoning, the original limitation period no longer applied so the time limit for the Statement of Claim had not expired, enabling the plaintiff to make the claim against the insurer.

What I think is most important about this case is the argument which was presented (despite not decided on) that a section 38 Trustee Act trumps the one year limitation period provided for under section 259.1 of the Insurance Act.

As an Ontario insurance claims lawyer, my team and I take pride in our accomplished insurance claim compensation recovery on behalf of accident victims forced to submit insurance claims with their own insurers.

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