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04 Sep 2018

Requirement of Physical Contact under SEF No. 44 Endorsement Upheld by Court of Appeal

by Jason Caissie
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Funk v. Wawanesa, 2018 ABCA 200

This is an appeal of a decision we previously covered in October, 2017. 

On May 20, 2008, Mr. Funk was operating his vehicle at night when an oncoming vehicle crossed the center line into Mr. Funk’s lane of travel.  Mr. Funk took evasive action and managed to avoid a collision, but his own vehicle rolled over into a ditch and Mr. Funk suffered injuries.  The other vehicle drove off and was never identified.

Mr. Funk received statutory limits of $200,000 from the Motor Vehicle Accident Claims Fund, which covered loss occasioned by an unidentified or uninsured motorist.  Mr. Funk then commenced a claim against his SEF 44 insurer, for damages above the statutory limits.

The SEF 44 endorsement provided coverage for damage caused by an unidentified automobile, however the policy defined an unidentified automobile as one that causes bodily injury or death “arising out of physical contact” between the unidentified automobile and that of the insured. 

The motion judge on the matter agreed that the policy required “physical contact” so that on a strict reading, Mr. Funk would be denied coverage.  The judge however went on to find that the requirement of physical contact would have required Mr. Funk to commit a tort by not avoiding contact, and this was contrary to public policy.  The Judge found that he could extend coverage to Mr. Funk despite noncompliance with the policy.

Wawanesa appealed the decision and the Court of Appeal allowed the appeal.  The Court of Appeal found that the language of the policy was clear and as such, there was no ambiguity in the policy. 

Furthermore, the Court of Appeal pointed out that motor vehicle insurance was a highly regulated industry in Alberta, meaning that the requirement of physical contact had been specifically approved by the Superintendent of Insurance, and could not be said to be unreasonable or unenforceable, such to require court intervention.

You can read Funk v. Wawanesa, 2018 ABCA 200, in its entirety here.

At Foster & Company, we represent institutions and individuals looking for help understanding insurance coverages and responding to claims. Contact us by phone at 506-462-4000 or reach us online for advice.