Damage Awards Don’t Apply in Some Foreign Jurisdictions

Insurers don’t necessarily have to pay out damages caused by an uninsured motorist if the collision happens in a jurisdiction that does not mandate third-party liability insurance, Newfoundland’s high court has ruled.


In the case cited as Kennedy v CGU Insurance Co of Canada, the Newfoundland and Labrador Court of Appeal upheld a trial judge’s decision that denied the plaintiffs their claims of either the lesser of $200,000 or the “minimum limit for motor vehicle liability insurance coverage” in the jurisdiction in which the crash happened.


In the collision, a driver who struck the plaintiff’s rental car did not have insurance. But Florida does not require motorists to carry third-party liability insurance, so the plaintiffs were denied their damages claim after the appeal court determined there can be no recovery of damages caused where third-party liability is not required.


The appeal court acknowledged the parties agreed that Florida law requires drivers to carry third-party property damage insurance coverage of at least $10,000, although the state statute makes no reference to damages for personal injuries suffered by third parties, such as the appellants.


The appellants submitted that as no mandatory third-party personal injury insurance requirement at all existed in Florida, it is not correct to say a minimum limit for third-party personal injury insurance existed in that jurisdiction.  


The appellants argued that had the provincial legislature intended to address the situation where a jurisdiction had no mandatory liability insurance whatsoever, the legislature would have done so with clear and unambiguous wording.


The respondents, which included CGU Insurance Company of Canada, The General Accident Insurance Company of Canada, and South Coast Insurance Agency, argued that the wording, given its ordinary meaning, “clearly expresses an intention that a person injured by an uninsured driver outside this Province can recover by way of damages only up to the minimum level of coverage required by the outside jurisdiction, subject to the maximum of $200,000 established under subsection 21(1) of the Act,” the appeal court acknowledged.


They submit that the minimum level in Florida is zero since no third-party personal injury insurance at all is prescribed. The appeal court concluded  the policy covers only the lesser of the minimum limit in the Florida jurisdiction, and the appeal was dismissed.


Insurers might consider sharing the court of appeal development with Snowbirds as they prepare to flock to jurisdictions like Florida where this case originated.

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