If an auto insurance claimant fraudulently applies for accident benefits payments arising out of a crash, the insurer can deny the entire auto claim, not just the fraudulent part of the claim, the Alberta Court of Appeal has confirmed.
In Abbas v. Esurance Insurance Company of Canada, Ali Alrida Abbas suffered life-altering injuries in a collision while travelling as a passenger in a vehicle driven by an uninsured motorist. Under Alberta’s Insurance Act, the injured claimant’s insurance company steps into the shoes of the uninsured motorist and pays SEF No. 44 benefits. Abbas admitted to faking he was employed, so he could collect Section B SPF No. 1 no-fault benefits, which include employment income replacement benefits.
The insurer, Esurance, denied Abbas’s entire claim. The insurer said his admission of fraud negated the whole insurance contract, including both the Section B and SEF No. 44 claims. Abbas disagreed, saying the fraud only related to the Section B claim, and he should have been entitled to the SEF 44 claim.
Alberta’s Appeal Court decision was unequivocal. If you lie on any part of the insurance claim, the whole claim can be denied.
“Section 554(1) of the Insurance Act relieves the insurer of the obligation to provide the insured with SEF No. 44 benefits,” a unanimous three-judge panel for the Appeal Court wrote in a decision released last Monday. There are two reasons for this conclusion.
“First, the insured’s lie in his proof of loss for Section B...
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