Case Summary: Wage v Canadian Direct Insurance Incorporated

Defence + Indemnity

April 2020 The Alberta Court of Appeal found that the territorial limitation provisions in the standard Alberta auto policy apply to the entire policy, such that if the insured is injured or killed in a jurisdiction other than Canada or the United States, there is no coverage under Section B and SEF44 Endorsement.

Wage v Canadian Direct Insurance Incorporated, 2020 ABCA 49

Facts + Issues

This matter involves the death of Ms. Wage, who was a pedestrian struck and killed by a motorcycle while vacationing in the Philippines. Ms. Wage's vehicle was insured under an SPF No. 1 standard Alberta auto policy (the "Policy") with an SEF 44 Endorsement issued by Canadian Direct Insurance. The Wage vehicle was parked in Edmonton at the time of the accident.

The territorial limitation provision, contained in the general provisions section of the Policy, stated: "This Policy applies only while the automobile is being operated, used, stored or parked within Canada, the United States of America or upon a vessel plying between ports of those countries."

The SEF 44 Endorsement provided that "the Insurer shall indemnify...for the amount that such eligible claimant is legally entitled to recover from an inadequately insured motorist as compensatory damages in respect of bodily injury...arising out of the use or operation of an automobile" (emphasis added by the Court). Furthermore, the Endorsement provided that "[e]xcept as otherwise provided in this endorsement, all...provisions...of the Policy shall have full force and effect" [emphasis added by the Court]. There was nothing in the Endorsement that "otherwise provided" regarding the Policy's territorial limitation provision.

That term "automobile" had its own definition in the SEF 44 Endorsement: "a vehicle with respect to which motor vehicle liability insurance would be required if it were subject to the law of the province governing the Policy".

Canadian Direct denied the Wage's coverage under Section B of the Policy and the SEF44 Endorsement on the basis that the vehicle which killed Ms. Wage was not "being operated, used, stored or parked within Canada, the United States of America or upon a vessel plying between ports of those countries".

Canadian Direct's application for summary dismissal in Master's chambers on the basis that the territorial limitation did not apply to the SEF 44 Endorsement and did not apply to negate coverage under Section B of the Policy. Canadian Direct's appeal...