Court upholds Aviva’s travel deductible for trips to medical appointments

Newfoundland and Labrador’s Supreme Court has dismissed a proposed class action lawsuit against Aviva Canada and Aviva General Insurance Company over a discretionary travel deductible the insurer imposed on medical and rehab accident benefits expenses.

Aviva imposed a 25-kilometre (round trip) deductible on travel expenses related to medical appointments within this range, the court noted. The insurer did not need regulatory approval to do so, as it is within the insurer’s discretion, the court found.

“I believe travel costs fall within the term ‘all reasonable expenses’ [as found in the province’s standard auto policy],” Newfoundland and Labrador Supreme Court Justice Vikas Khaladkar wrote for the court in a decision released today. “I am further of the opinion that the decision as to whether the travel costs should, or should not, be reimbursed is discretionary and must, in the first instance, be defined by the insurer.

“If the injured party is dissatisfied with the decision of the insurer, then they would have resort to the courts to determine whether claimed expenses were reasonable under the circumstances.”

Background

Two Newfoundland drivers proposed to be the lead plaintiffs in a class action lawsuit against Aviva for not receiving medical expenses they incurred for their accident benefits claims, as they alleged in court documents.

Adam Crotty was involved in two motor vehicle accidents – one on Aug. 25, 2018, and the second on Jan. 14, 2019. Shawn Coleman was involved in a vehicle accident on Dec. 12, 2019. Both men received Section B accident benefits from Aviva.

Section B of the province’s standard auto policy says:

The Insurer agrees to pay to or with respect to each insured person as defined in this Section who sustains bodily injury or death by an accident arising out of the use or operation of an automobile:

• All reasonable expenses incurred within four years from the date of the accident as a result of such injury for necessary medical, surgical, dental, chiropractic, hospital, professional nursing and ambulance service and for any other service within the meaning of insured services under Medical Care and Hospital Insurance Act…”

The court noted the phrase “all reasonable expenses” is not defined in the province’s standard auto policy.

Crotty went to court after Aviva denied him his travel expenses.

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Aviva General told the court it compensates insured persons covered by auto policies for no-fault Section B accident benefits — specifically, transportation or mileage costs to and from medical appointments — at a rate of $0.25 per kilometer travelled.

“However, on or about Mar. 1, 2018, Aviva General Insurance Company changed its policy for reimbursing traveling expenses by giving adjusters the discretion to decide whether or not mileage claims less than 25 kilometers (round trip) should be reimbursed,” the court found.

“In Mr. Crotty’s case, no reimbursement for travelling expenses was offered to him. However, in Mr. Coleman’s case, he was advised that he would be fully reimbursed but would have to submit a claim by means of providing a travel log. Mr. Coleman did not apply for reimbursement.”

What the court found

Among other things, Crotty argued Aviva was legally required to have its 25-km travel deductible approved by a regulator during the rate-filing process. But the court found no law required the insurer to do so. Nor did the law require the insurer to pay for travel to medical appointments as part of “all reasonable expenses.”

The court did not address Aviva’s concerns with Crotty’s claimed expenses.

“Amanda Perry, claims leader for healthcare services for Aviva General Insurance Company, filed an affidavit with the court dated May 18, 2023,” the court’s decision states. “In that affidavit, she deposed that Mr. Crotty made a claim for 91 trips to and from visits to his physiotherapist and massage therapist.

“She indicated that Mr. Crotty was seeing his physiotherapist and massage therapist at the same place on a number of occasions and, therefore, that he was only entitled to claim for 48 of the 91 trips. Each of the return trips was less than 25 kilometers in length.”

Aviva ultimately denied Cotty’s claim for travel costs because the trips fell within its 25-km travel deductible.

In Coleman’s situation, the court found he was not actually denied payment for the travel expenses. In fact, Aviva told Coleman he was eligible to receive the benefits despite the 25-km travel deductible – he just didn’t apply for them.

“I note that Mr. Coleman was invited to apply for reimbursement, but no application was forthcoming from him,” Justice Khaladkar wrote. “The insurer said that it was ready, willing, and able to pay a claim for reimbursement without imposing a deductible. That being so, Mr. Coleman becomes a less likely candidate to be a representative plaintiff in a class action suit.”

Ultimately, the court framed the dispute in a larger context.

“It must be remembered, in this case, that there was no total loss of benefits,” the court found. “In the case of Mr. Crotty, he was paid $12,500 in Section B claims and denied $500 if all of his transportation claims were justifiable. And in the case of Mr. Coleman, he didn’t apply for reimbursement – even though the defendant [Aviva] was prepared to pay – so he lost nothing at all.”

Feature image courtesy of iStock.com/ljubaphoto