Section B loss of income benefit: Income to offset lost earnings_.

The Section B loss of income benefit is a benefit provided to you by your insurer under a Standard Automobile Insurance Policy. This benefit, also called the “weekly indemnity benefit”, allows you to receive a portion of your income if you are unable to perform the essential duties of your occupation or employment following an accident. These benefits are calculated based on your gross weekly income.

For your convenience, we have created the following table demonstrating the loss of income benefit to which you are entitled based on the province in which you reside:

Courts across the country have interpreted Section B of the Standard Automobile Insurance Policy in order to determine benefits payable to an insured following a motor vehicle accident.

In Thompson v. Allstate Insurance Co. of Canada, 2005 NBBR 246, the insurance company lowered Ms. Thompson’s loss of income benefit from $154.88 to $110.38 per week after obtaining her records of employment and calculating her “average” gross weekly income. The court confirmed that benefits are to be based on gross weekly income, not “average” gross weekly income, and found Ms. Thomspon entitled to the full $154.88 weekly payment.

Will my settlement under Section A affect my action against Section B?

No. In Humprey v. Portage La Prairie Mutual Insurance, 2009 NSSC 153, the injured Ms. Humphrey settled her claim against the Section A insurer (at-fault driver’s insurance company) and proceeded to make a claim against her own insurance company (Section B) for failure to pay her no-fault benefits. The court concluded that the Section B insurer had to continue to make payments regardless of the settlement arising from a claim under Section A.

Are there time restrictions that apply to claims under Section B?

Yes. To be successful in your claim against Section B, it is important to respect certain time restrictions. In Smith v. Commercial Union Assurance Company of Canada, 1995 CanLII 4567 (NS SC), the court found that Ms. Smith was not eligible for Section B loss of income benefits as she did not report her accident within 30 days of the accident or a reasonable time thereafter. The court found the delay in reporting was critical to her claim for loss of income benefits, and therefore denied it.

Will my Workers’ Compensation Benefits affect my claim for Section B loss of income benefits?

It is important to know that if you are in receipt of workers’ compensation benefits, you may not obtain a full benefit for loss of income under Section B. In McLean v. Portage la Prairie Mutual Insurance Company, 2018 NSSC 110, the court found that Mr. McLean’s workers’ compensation benefits interfered with his ability to obtain loss of income benefits under Section B. The court held that these benefits must be deducted from his weekly loss of income benefit.

How long will I receive loss of income benefits?

“Own occupation” stage

The definition of “disabled” in order to recover weekly loss of income benefits changes after two years. In the first two years, in order to recover loss of income benefits, you must be unable to return to the job you previously worked.

“Any occupation” stage

After the initial “own occupation” stage, in order to be entitled to receive ongoing loss of income benefits, you must prove that your accident injuries have rendered you permanently disabled and unable to do any work for which you are reasonably suited.

What does it mean to obtain employment for which you are “reasonably suited”?

Although your insurance company will often try to terminate your benefits after the two-year mark, in many cases, there is an argument to be made that the benefit should continue. Generally, if your disability has rendered you unable to successfully complete the essential tasks of your employment, you will likely be unable to return to any other employment for which you are reasonably suited.

Case law demonstrates that the courts have determined that “an occupation for which you are reasonably suited” means an occupation suitable to your educational background, training and experience. It must also allow you to earn between 60 and 70% of your pre-disability income.

In Vantassel v. The Dominion of Canada General Insurance Company, 2015 NSSC 159, Ms. Vantassel’s Section B benefits were terminated at the 104-week mark after her insurance company obtained a functional capacity evaluation demonstrating that she would be able to return to a job for which she was reasonably suited. At the time, Ms. Vantassel was in fact in receipt of CPP disability benefits due to her accident injuries. Although her attempt at recovering her loss of income benefit was initiated a year past the limitation period, the Court allowed it as they had reasonable grounds to believe that Ms. Vantassel would be eligible to obtain benefits past the “own occupation” stage.

The Court in McCulloch v. Calgary (City) [1985], 15 C.C.L.I. 222 (Alta. Q.B.) stated that an individual is not required to take on alternate employment which is “trivial, menial or inconsequential or work for which they are overqualified or unsuited by background.” In other words, the employment must be a “reasonably related occupation.”

Watch the video below to learn the difference between “own occupation” and “any occupation.”

What if I’m able to work a job for which I am reasonably suited, but I am unable to enjoy my personal life due to strain caused by my work duties?

A wide variety of courts, such as the Court of King’s Bench of Alberta in Tesky v. Great West Life Assurance Co. (2001), 37 C.C.L.I. (3d) 53, have confirmed that a person who is able to perform work which brings them up to 60% of their pre-injury income but who is then rendered unable to enjoy a home or personal life, is not necessarily medically able to perform to that level because working to the point of exhaustion and to the detriment of one’s life outside work cannot be considered healthy.

If you believe that your accident injuries prevent you from returning to your own or other suitable employment, it is important to seek legal advice. Although the weekly loss of income benefit may seem small, if you are eligible on a life-time basis, the value of the benefit could be significant.

Is my Section B loss of income benefit taxable?

Similar to damage awards arising from personal injury lawsuits, Section B loss of income benefits are not taxable.

What if Section B stops paying my loss of income benefit?

While the Section B portion of your insurance contract is required by law, your policy as a whole is a contract between yourself and your insurer. If Section B is refusing to pay you a loss of income benefit to which you are entitled by the policy wording, you may be able to take legal action against them for breach of contract. A breach of contract signifies that one party failed or denied meeting their obligations as specified in the contract. Generally, where the insurance company breaches their contract, the insured has the right to recover damages. They also have the obligation to act in good faith.

In Whiten v. Pilot Insurance Co., [2002] 1 S.C.R 595, the Supreme Court of Canada held that the insurer owed the insured a duty of “good faith and fair dealing” under an implied term of the insurance contract. This was observed by the New Brunswick Court of Appeal in Walsh v. Nicholls and CGU Insurance Company of Canada, 2004 NBCA 59, when the court concluded that Mr. Walsh could successfully sue the insurance company for terminating his Section B benefits due to the fact that they had acted in bad faith in breaching their contractual obligations.