SABS Update – The Definition of Incurred Revisited
Shokat and Axa Insurance (Canada), FSCO A12-001462, Arbitrator Isoken Osunde, October 3, 2014.
MVC April 23, 2010. The insured, Shokat, claimed various benefits including housekeeping and home maintenance benefits at the rate of $100.00 per week from April 24, 2010 to April 22, 2012.
The Arbitrator set out the test for entitlement to housekeeping benefits as enunciated in Waheed and RBC General Insurance Company (2007). Three elements must be fulfilled in order to prove entitlement to housekeeping benefits:
- The insured must have performed housekeeping and home maintenance services before the accident;
- The insured must suffer a substantial inability to perform those housekeeping and home maintenance services, as a result of the accident-related impairment, and;
- Additional expenses must be incurred for someone else to perform those services.
The Arbitrator accepted the insured’s testimony that, prior to the accident, she was responsible for all of the housekeeping duties in her home. The insured did not specify the number of hours she spent performing housekeeping tasks prior to the accident and did not call any witnesses to corroborate the housekeeping
services she performed prior to the accident.
Subsequent to the accident, the insured hired a service provider to assist with the housekeeping. She paid her $10.00 per hour. From the first day after the accident until September 2010, the service provider attended 3 times per week, 5 hours per visit, then reduced her visits to once a week for 10 to 12 hours per visit. The service provider stopped attending her home in October/November 2010, at which point she relied on her husband and children to assist with the housekeeping. She did not produce any receipts for the services provided by her family members, as she did not pay them for their services. The Arbitrator found “given the expectation that the relationship between her and her husband and children would be less formal, I do not find it unreasonable to believe that she did not document the services they provided to her.”
The Arbitrator concluded Shokat required assistance with her housekeeping tasks for the duration of her claim, and found as reasonable a weekly housekeeping benefit of $100.00 per week from April 24, 2010 to November 30, 2010. The Arbitrator also concluded she required less assistance once her family members took on the housekeeping from the service provider, and found as reasonable a weekly housekeeping benefit of $50.00 per week from December 1, 2010 to April 22, 2012. The Arbitrator found she was entitled to a housekeeping benefit for the period during which her family members assisted with the housekeeping, despite the fact she never paid her family members for their services provided. The Arbitrator noted:
Jurisprudence has established that an insured need not actually receive an item or service or spend money or become legally obligated to do so for expenses to be incurred. Establishing the reasonableness and the necessity of a service and the amount of expenditure is sufficient to satisfy the meaning of the word incurred.
This decision rightly upholds the jurisprudence which says an insured need not spend money for an expense to be incurred. An insured should not be denied a benefit simply because they cannot afford to pay for services while they wait for reimbursement which may never arrive. This collision occurred prior to the amendments which came into effect on September 1, 2010; a case involving a post September 1, 2010 collision may be decided differently.
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