Auto Insurance Policy Section B Benefits

Every auto insurance policy includes no fault benefits which are also known as Section B benefits. These benefits are available to the driver of the vehicle as well as any passenger injured as a result of an accident, regardless of fault. Section B provides coverage for necessary medical treatment, prescription drugs, some lost income, and other services depending on your unique circumstances. When suing a third party in relation to your motor vehicle or car accidents claim, they will be entitled to deduct any benefits received from Section B. This is to ensure there is no double recovery when you reach a settlement or receive an award at trial. These deductions are also known as “set-offs”. The Nova Scotia case of MacKay v. Rovers, 1987 CanLII 130 (NS CA) dealt with the issue of set-offs when a plaintiff has not claimed available benefits under Section B. In that case the plaintiff suffered extensive injuries as a result of a motor vehicle accident in which she was a passenger. The plaintiff won at trial and the defendant appealed in part related to the special damages award regarding costs which they argued should have been put through the plaintiff’s accidents benefits insurer (Section B) but weren’t.

Relevant Issue on Appeal

Whether the appellant is entitled to off-set expenses incurred by the respondent which they were entitled to through Section B.

Law and Analysis:

The Nova Scotia Court of Appeal in MacKay found for a defendant to claim they are entitled to set-off costs that were available to the plaintiff under Section B, they must establish that a Section B policy was in place. If the defendant can establish benefits were available and not claimed by the plaintiff, they will likely succeed in setting-off the amount the plaintiff would have received under the policy. The plaintiff can counter this by proving that the benefits in question were claimed and refused by Section B. The Court of Appeal summarized the principle regarding Section B set-offs as such: “If it is alleged by a defendant that the damages which he would otherwise have to pay would be reduced by the amount the plaintiff could have recovered under the no‑fault provisions of an insurance policy, the burden rests firstly with the defendant to show that such a policy exists. If the defendant is able to show that such payments have been made or that they are available to a plaintiff entitled thereto then the defendant should succeed unless the plaintiff is able to establish that such payments have been claimed and refused. It is not necessary for the plaintiff to show that the issue between the plaintiff and the insurance company has been litigated but only that the insurer has taken the position that the plaintiff is not entitled to recover.” It is noteworthy that the burden is easily moved from the defendant to the plaintiff by showing there is a policy in place. Despite the low threshold for the defendant, the burden is also easily shrugged by the plaintiff so long as they can show they applied for the benefit in question and were refused. It is not required that the insurer be sued, only that they have refused recovery by the plaintiff. With respect to the issue of Section B benefits off-setting the special damages award, the Court of Appeal followed the reasoning of the Ontario case Stante v. Boudreau (1981), 1980 CanLII 1875 (ON CA) in which the injured plaintiff applied for disability benefits under the Ontario Insurance Act, R.S.O. 1990, c. I.8. The relevant section was similar to Schedule A of Nova Scotia’s Insurance Act, RSNS 1989, c 231, which deals with no fault accident benefits (Section B). The court found that the defendant had failed to discharge the burden upon him. The defendant could not show that the plaintiff had been disabled during the 84 weeks for which he received no payment and therefore refused to allow the claim against the defendant to be released by the amount which would have been paid had the plaintiff been entitled to receive these benefits. The Court of Appeal went on to acknowledge that the reasoning from Stante was adopted in Nova Scotia in the case of Stewart v. Nickerson (1986), 73 N.S.R. (2d) 175 “where an insurer had refused to pay disability payments because of a time limitation in the policy. Mr. Justice Richard held that this refusal was sufficient to cause him to reject an application to reduce the defendant’s damages on the argument that payments were available to the plaintiff under the provisions of the no‑fault policy of insurance.”

Of note in Stewart is the importance placed on receiving a refusal from the insurer. The injured party must show that they made efforts to receive the benefits they may have been entitled to. The reasoning used in Stewart guides the Court in MacKay. The Court in MacKay applied the established law from Stewart and found the plaintiff, through their counsel, had been advised by the opposing party that there were Section B benefits available for reasonable medical expenses under the policy. No claim was made against the insurer for these benefits and no refusal had been received. As such, the Defendants were able to establish at trial that such a policy existed and therefore had discharged their burden. The Court varied the amount of special damages awarded based on the findings from $1,555.67 to $177.95.

Relevant Case Law From Other Atlantic Jurisdiction

The New Brunswick Court of Appeal case of Morris v. Collette, 2003 NBCA 35 provides guidance with respect the difference of being entitled to a benefit vs. having a benefit available under the law. In this case the Court applied the reasoning of both Stante and Mackay and elaborated on the important distinction between what benefits a plaintiff may be “entitled” to vs. benefits which are in fact “available” to them. The Court found that regardless of whether a plaintiff may be “entitled” to certain benefits, if there is a refusal by the Section B insurer, than these benefits are not “available” and therefore cannot be used as a set-off in any damages award against the defendant.