On February 11, 2014, the Ontario Court of Appeal decision in Sietzema v. Economical Insurance1 confirmed the importance of insurers providing: (i) clear instructions when it comes to limitation periods, and (ii) an unambiguous notice of refusal to pay a certain benefit.   

On November 11, 2005, Tanya Sietzema was involved in a motor vehicle accident.  Ms. Sietzema applied to her own insurer for benefits under the Statutory Accident Benefits Schedule (SABS).

On December 19, 2005, the insurer replied to the application by sending Ms. Sietzema a form entitled ‘Explanation of Benefits Payable by Insurance Company’ (OCF-9).  At the bottom of the page, under the heading, “WARNING: TWO YEAR TIME LIMIT,” the form explained, among other things, that Ms. Sietzema had two years from the insurer’s refusal to pay a benefit to commence a lawsuit. Furthermore, the OCF-9 indicated that Ms. Sietzema was eligible for Income Replacement Benefits but not eligible for Non-Earner Benefits because she was employed at the time of the accident.

At the time the insurer denied Ms. Sietzma’s eligibility for Non Earner Benefits, it was generally accepted in the insurance industry that employment at the time of an accident precluded receipt of Non-Earner Benefits.2 This changed in 2012 when the Ontario Court of Appeal determined inGladamez v. Allstate Insurance Company of Canada that a person who was able to continue working might nevertheless qualify for Non-Earner Benefits.

Ms. Sietzema ultimately returned to work on February 13, 2006 after consulting with a lawyer. Her insurer terminated her Income Replacement Benefits shortly afterwards.  

Several years after returning to work. Ms. Sietzma re-asserted a claim for Non-Earner Benefits.

Ms. Sietzema argued that the insurer had misled her concerning her entitlement to Non-Earner Benefits. The Court disagreed, and pointed to the fact that she hired a lawyer in 2006 to advise her of her rights as a result of the accident, including her right to accident benefits. Her lawyer that was obligated to inform her of the benefits that she was entitled to and the deadlines for obtaining those benefits. Ms. Sietzema submitted that she was given the wrong reason for her ineligibility for Non-Earner Benefits. The Court, relying on, Turner v. State Farm Mutual Automobile Insurance Co., held that clear and unequivocal notice given by the insurer, cancelling the insured’s benefits, was sufficient to trigger the limitation period, notwithstanding that the insurer gave legally incorrect reasons for cancelling the benefit.

Ms. Sietzema also argued that her insurer breached its duty to provide her with a written explanation of the benefits available and to assist her in applying for them. The Court again disagreed and found that the information package sent to Ms. Sietzema complied with the SABS and stated the test for Non-Earner Benefits as it was then understood.

The Court ultimately dismissed Ms. Sietzema’s claim holding that the OCF-9 sent to Ms. Sietzema clearly: (i) stated that she was not eligible for Non-Earner Benefits, and (ii) gave notice of Ms. Sietzema’s rights to litigation and the two year limitation period. The limitation period began to run when Ms. Sietzema’s claim for Non-Earner Benefits was refused.  The Court also stated that there is nothing in the Insurance Act or SABS that required an insurer, on termination of benefits, to give the claimant a further notice advising that he or she may have a right to renew a claim for a benefit that had previously been denied.3