Recent Decision Limits Limitation Period for Disability Insurance

There are different types of disability insurance coverage but generally when it comes to income replacement coverage – i.e. the payments you’d get as replacement for the income you’re not able to earn due to a covered disability – you’re looking at payments spread out over a regular schedule such as every two weeks or every month.

It used to be that when a long term disability insurance company failed to make one of those payments, and it was later determined that there were no valid grounds to do so, the period of limitations when it came to launching a lawsuit began again with each payment date missed. In other words, the clock started ticking with each schedule date of payment.

A recent court decision in Alberta, however, seems to reverse this trend. The Alberta Court of Appeal ruled against what amounts to a continuing series of contractual breaches (Halter v. Standard Life Assurance Company of Canada, 2014 ABCA 57).

The Case

In this case, the plaintiff was paid under a long term disability insurance policy and the facts of the case include:

  • The company terminated his coverage in 2001.
  • The plaintiff didn’t file his claim until 2006.
  • The applicable limitation period was two years under Alberta’s Limitations Act.

Using the ongoing period of limitations theory, the plaintiff argued he was entitled to the disability payments he would have gotten from 2004 to 2006. The Court of Appeal disagreed, holding instead that the limitation period began to run as soon as the insurer “no longer accepted that [the plaintiff] had a continuing disability” and indicated it would no longer make monthly payments.  The judge ruled that the claim was closed at that point and the plaintiff had to make a decision to launch a lawsuit within that initial two year period.

The Implications

Ontario’s current applicable legislation, the Limitations Act, uses similar language and logic as that of the Alberta law that led to the recent decision.

  • What it means: If your long term disability insurance claim has been denied and the insurance company has told you that you were no longer entitled to disability benefits, you need to get legal advice as soon as possible.

You can’t afford to wait. You buy disability insurance or pay for group insurance enrolment to protect yourself financially when you can’t work and many claims are initially denied only to be reinstated after negotiations or in some cases legal action. Let us help. Call the experienced disability insurance lawyers at Petrillo Law today.

We Focus On Disability Insurance, Personal Injury & Motor Vehicle Accident Claims

Petrillo Law has been providing competent, caring legal advice to disability insurance clients in Mississauga, the Greater Toronto Area (GTA) and across Ontario for over 20 years. We can evaluate a case to determine whether it meets the provincial threshold required to start a lawsuit as well as represent injured people who have been denied accident benefits by their own insurance company.

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