If you have been injured as a result of a motor vehicle accident in Ontario, you might be eligible for accident benefits under the Statutory Accident Benefits Schedule (“SABS”). While various types of statutory accident benefits are available under the SABS, one key benefit provides compensation for lost income.

This article introduces the SABS and income replacement benefits. It also looks at a recent decision of the Licence Appeal Tribunal where an applicant challenged an insurance company’s denial of her application for income replacement benefits on the basis that she missed the deadline to apply.

The Statutory Accident Benefits Schedule provides accident benefits to those injured in motor vehicle accidents

The SABS is a regulation made under the Insurance Act. The SABS sets out the terms relating to the benefits that insurance companies need to pay if a policyholder, or another specified individual, is injured in a motor vehicle accident. These benefits apply under every Ontario auto insurance policy. There are certain exclusions but they apply regardless of fault.

The types of benefits available and the amounts that the insurance company must pay depend on various things, including the particular policy purchased and the severity of the injury sustained. The available benefits can range from medical and rehabilitation benefits to attendant care benefits designed to replace income or unpaid caregiver services. 

The income replacement benefit compensates for lost income if you cannot return to work

The income replacement benefit can greatly help a person who is covered under the auto insurance policy and cannot work due to the injuries sustained in the accident. The income replacement benefits are payable for the period during which the person is substantially unable to perform the essential tasks of their employment.

The standard policy pays up to 70% of the injured person’s gross income, up to a maximum of $400 per week. The insurance company does not need to pay the benefit for the first week of the disability or after 104 weeks of disability unless the person is completely unable to engage in any employment for which they are reasonably suited. 

Motor vehicle accident victim’s partner applied for accident benefits

In the case of Thompson v Aviva Insurance Company, the applicant’s fiancé sustained catastrophic injuries in a motor vehicle accident in 2015. The applicant cared for him following the accident but had to stop work in 2019 when she had a psychological breakdown related to this care.

The applicant applied for accident benefits in May 2019 on the basis that she suffered psychological injuries as a result of her partner’s accident. The SABS defines “insured person” to include the spouse of the named insured: 

“if the … spouse … is not involved in an accident but suffers psychological or mental injury as a result of an accident in or outside Ontario that results in a physical injury to his or her spouse …”.

The applicant applied to the Tribunal after the insurance company failed to pay income replacement benefits

After a lengthy delay, the insurance company responded in January 2020, indicating that it would pay the applicant income replacement benefits. The insurer issued cheques, but these went to the wrong address and were never cashed.

In February 2020, the applicant told the insurer that she had not yet received payment. She received no further response from the insurer, so she applied to the Tribunal. 

In November 2020, the insurance company advised the applicant that, despite what it had previously said, she could not claim income replacement benefits because she applied more than 104 weeks after the accident. 

The SABS contains various time limits and eligibility criteria

Under section 36 of the SABS, after an applicant for income replacement benefits submits a disability certificate with their application, the insurer has ten business days to either pay the benefit, explain why they think the applicant is not entitled to the benefit, or request further information or an examination.

If the insurance company does not comply with this timeline, they need to pay the benefit from when they receive the application and certificate until they give notice that the applicant is not entitled or needs an examination. 

Under section 5, income replacement benefits may be available if the insured person cannot work as a result of and within 104 weeks after the accident. Further, section 32 provides that applicants need to notify the insurer of their intention to apply by the seventh day after the circumstances giving rise to the entitlement arose or as soon as practicable after.

The applicant was entitled to income replacement benefits until January 2020

The Tribunal found that the insurance company failed to comply with the time limit in section 36 of the SABS. It did not respond within ten business days, and instead took eight months. 

As a result, the Tribunal decided that the applicant was entitled to income replacement benefits from May 2019 until the company responded in January 2020.

However, income replacement benefits were not payable after January 2020

The Tribunal also found that section 5 of the SABS limits income replacement benefits claims to insured persons whose entitlement arises within 104 weeks of the accident, not within 104 weeks of when the symptoms arose. In this situation, the applicant noted that her impairment arose after this time. 

Alternatively, if the impairment arose within 104 weeks of the accident, the applicant did not notify the insurance company of her intention to apply for more than three and half years after the accident. The lack of a reasonable delay and reasonable excuse meant the applicant did not comply with the time limit in section 32 of the SABS. 

Therefore, the Tribunal found that the applicant was not eligible for income replacement benefits after January 2020.

Contact Campbell Litigation for Advice on Personal Injury Claims and Insurance Claims Denials

The experienced personal injury lawyers at Campbell Litigation represent clients throughout Waterloo, Kitchener and the surrounding areas who have been injured as a result of a motor vehicle accident. Our personal injury team understands how important accident benefits can be in allowing injured individuals to get the appropriate care and recover from their injury. If you have been denied coverage after an auto insurance claim for benefits, our lawyers can help you by advocating for your claim. To arrange a consultation with a member of our team, call us at 519-886-1204 or contact us online