Insured’s claim for uninsured motorist coverage denied on the basis of fraudulent claim for disability benefits under same policy

Insurance law – Automobile insurance – Uninsured motorist – Fraud – Benefits – Statutory provisions – Practice – Leave to appeal – Standard of review – Summary judgments

Abbas v. Esurance Insurance Co. of Canada, [2021] A.J. No. 562, 2021 ABQB 303, Alberta Court of Queen’s Bench, April 21, 2021, B.B. Johnston J.

The insured was a passenger in the backseat of a motor vehicle involved in an accident. He was thrown from the vehicle and sustained injury. The insured brought a claim against the driver of the vehicle, who was uninsured and noted in default. The insured filed a claim for disability benefits and sought coverage under a SEF (uninsured or underinsured motorist protection) endorsement.

When the insured applied for disability benefits, he lied about his employment situation to qualify for benefits. He subsequently lied to the adjuster and provided a false employer’s certificate. The insured was denied disability benefits because he did not qualify and was also denied SEF 44 coverage on the basis of his false statements.

The insured brought a claim against the insurer. The insurer brought an application to dismiss the claim. The Master was not prepared to dismiss the claim because the insured’s dishonesty was not materially connected to the SEF 44 claim.

On appeal the court dismissed the claim finding that the Insurance Act as a whole supports the forfeiture of an indemnity in the face of fraud.

This case was digested by Cameron B. Elder, 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 Cameron B. Elder at [email protected].

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