Judges divided on how claimants prove involvement of unknown vehicles

The Court of Appeal of Alberta has ruled that motorists who claim to be hit by unidentified vehicles must prove that there was “physical contact,” and produce some kind of corroborating evidence of the involvement of an unknown vehicle.

The decision overturned a lower court ruling that The Family Protection Endorsement under Alberta’s auto insurance policy runs contrary to public policy because motorists who avoid collisions get no coverage.

In a divided decision released May 25, the Court of Appeal of Alberta ruled in favour of Wawanesa Mutual Insurance Company, overturning a 2017 Court of Queen’s Bench ruling. Wawanesa had asked the court to dismiss a claim from Andrew Funk, who suffered injuries (including one to his spinal cord) as a result of a rollover vehicle accident in 2008 near Edmonton.

Funk reported that he drove his vehicle off the road in order to avoid a head-on collision with an unidentified oncoming vehicle, which did not stop. He had bought a Family Protection endorsement (known in Alberta as SEF No. 44) from Wawanesa. The endorsement is intended to provide coverage if a motorist is involved in an accident with an underinsured or unidentified vehicle.

Alberta’s Motor Vehicle Accident Claims Fund paid $200,000 to Funk, who wants his Family Protection Endorsement to cover damages in excess of that $200,000.

But in such cases, there needs to be “physical contact with the unidentified automobile,” and the insured must also provide independent corroborating evidence of the involvement of that unknown vehicle,” wrote Justices Frans Slatter and Patricia Rowbotham of the Court of Appeal of Alberta in the May 25, 2018 ruling.

Originally, Justice Eldon Simpson of the Court of Queen’s Bench ruled that Wawanesa must cover Funk. Justice Simpson reasoned that the “effect” of enforcing the “physical contact” portion of the policy “generates an unreasonable outcome.” This, Justice Simpson contended, is because an insured who takes evasive action gets no coverage but an insured to fails to take evasive action is covered.

In overturning Justice Simpson’s ruling, the majority of the Court of Appeal of Alberta (Justices Slatter and Rowbotham) noted that auto insurance in Alberta is “highly regulated” and the wording of standard auto insurance policies are approved by the Superintendent of Insurance.

“The approach of stepping around the terms of an insurance policy on the basis of ‘unjust or unreasonable’ terms, ‘public policy’, or ‘relief from forfeiture’ runs the risk of throwing any semblance of certainty out the window,” wrote Justices Slatter and Rowbotham. “While these concepts are recognized in law, they must be applied with caution with respect to standard form, statutorily mandated insurance policies.”

Dissenting was Justice Ronald Berger, who would have dismissed Wawanesa’s appeal. Justice Berger contended that the claimant “had a reasonable expectation that he had purchased insurance coverage which would apply when he was involved in an accident with an unidentified motorist, provided that he was able to provide physical evidence indicating the involvement of the unidentified automobile.”