July 7, 2014

SABS Upate – Vacationers Beware: No Statutory Accident Benefits Payable for Collisions Occurring outside North America

For the week of July 7 to July 11, 2014

Jama v. Aviva Canada Inc. FSCO A-13-004308
Arbitrator: Isoken Osunde

MVC: May 13, 2012. Mr. Abdishakur Jowar was involved in a fatal motor vehicle accident in Borama, Somaliland, Africa. He was driving his sister’s vehicle, which was uninsured. The deceased’s spouse, Ms. Jama, applied for death and funeral benefits from Aviva.

The issue on the arbitration is whether or not the territorial limitations set out in section 2(3) of the SABS, precluded the applicant from claiming statutory accident benefits arising out of an accident that occurred in Somaliland, Africa.


Section 2(3) of the SABS provides that benefits will be provided in “respect of accidents that occur in Canada or the United States of America, or on a vessel plying between ports of Canada or the United States of America.” Territorial limitations are also mentioned in section 59(1) of the SABS and in section 243(2) of the Insurance Act.

Section 59 (1) allows an insured to elect to receive benefits in Ontario for an accident that occurs in another province or territory of Canada or jurisdiction of the United States of America where there are no benefits received under the law of the jurisdiction in which the accident occurs. Section 243(2) expands coverage to other jurisdictions designated in the Statutory Accident Benefits Schedule.

Interpreting the 1994 Schedule, the Court of Appeal interpreted the phrase “in or outside of Ontario” to mean “throughout the world”. To limit the jurisdictional scope, section 243(2) was introduced to the Insurance Act. The current position of the law in Canada is stated in Nararali v. Allianz Insurance Company of Canada. In that instance, the applicants were barred from claiming accident benefits arising from a collision in Malawi.

The Applicants attempted to argue there was ambiguity about coverage outside North America and that the ambiguity should be resolved in favour of the insured. Rejecting this argument, the Arbitrator found that where the Act is silent about accidents that occur in other parts of the world (such as Africa), it makes good sense, given the legislative amendments to the territorial limitations, to interpret the silence as the intentional exclusion of other parts of the world rather than an ambiguity about the jurisdiction covered.

Consequently, the applicant was precluded from claiming funeral and death benefits.


Many Canadians will be traveling abroad over the summer months and many will rent vehicles or travel in vehicles belonging to extended family and friends. Particularly when outside of Canada or the United States, drivers should be cautious to ensure that the vehicles they drive are properly and adequately insured, in accordance with the laws of the jurisdiction. It is prudent to check coverage before getting behind the wheel or climbing into the passenger seat.

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