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When Does a Cause of Action Arise for Section B Claims in the Maritimes?

The Legal Importance of Cause of Action in Maritime Car Accident Claims

Understanding when the cause of action arises is crucial in determining the limitation periods for
Section B benefits in New Brunswick (NB), Nova Scotia (NS), and Prince Edward Island (PEI).
However, this is not as straightforward as it might seem.

Defining “Cause of Action” Under Section B

A “cause of action” under Section B of an insurance policy typically refers to the legal basis upon
which a claim can be made for accident benefits. Section B is a provision commonly found in
standard automobile insurance policies in Atlantic Canada, including New Brunswick, Nova
Scotia, and Prince Edward Island. It covers medical, rehabilitation, and wage loss benefits after a
motor vehicle accident, regardless of fault. If you are injured in a car accident, you can make a
Section B claim directly to your insurance company, even if the other driver was responsible for the
crash.

Section B benefits are designed to assist with immediate post-accident expenses. These benefits
include medical treatment costs, such as hospital visits, physiotherapy, and prescription drugs, as
well as income replacement if the injury prevents you from working. The cause of action arises
when the insurance company fails to provide these benefits as outlined in the policy. In such cases, the injured party may need to pursue legal action to enforce their rights and recover the benefits owed to them under Section B.

The key factor in a Section B cause of action is proving that the claimant is entitled to the benefits
as specified in the insurance contract. The claimant must demonstrate that they have met the
necessary conditions—such as being injured in a car accident and requiring medical treatment or
losing income due to the injury. If the insurer denies or delays payment, the injured party may file a
lawsuit for breach of contract, seeking to enforce their right to the benefits provided under Section
B.

Differences in Statutory Language

The limitation period is not strictly tied to the car accident date but depends on when the “cause of
action” begins, which is often linked to the insurer’s actions, such as denying benefits or stopping
payments.

The statutory language in NB, NS, and PEI reflects a key difference in how limitation periods are
applied. For instance, Section 262 of the Insurance Act in NB refers to a limitation period of “not
less than one year after the happening of the accident.”

This language contrasts with that of Section B, which speaks of the “date on which the cause of
action arose.” Similarly, NS and PEI’s insurance laws highlight the “cause of action” as the point
when the right to sue begins, not when the accident occurs. This is crucial, as it allows for more
flexibility in determining when the clock starts on the limitation period.

Beyond the Accident: The Broader Scope of ‘Cause of Action’

The term cause of action under Section B is broader than the accident itself. For example, the
insurer’s ongoing duty to pay weekly indemnity benefits for as long as a disability persists means
that a cause of action can arise long after the accident.

This interpretation applies to NB, NS, and PEI, where the courts have recognized the insurer’s
obligation to continue making payments until they definitively deny a claim.

In NB, the case of Shanks v. TD Home and Auto Insurance Co. serves as a precedent. Here, the
court ruled that the limitation period started when the insurer denied further Section B benefits, not
on the accident date. Similarly, in PEI and NS, if the insurer stops payments, that’s when the
limitation period begins, typically within one or two years, depending on the nature of the claim.

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The courts have recognized the insurer's obligation to continue making payments until they definitively deny a claim
Rolling Limitation Periods for Long-Term Disability

One of the key complexities in Section B claims is the rolling limitation period for long-term
disability benefits. In cases where the insurer continues to pay, the limitation period does not start
until payments are stopped.

This was reinforced in Couture v. Fidelity Insurance Co., where the NB Court of Appeal ruled that if the insured could prove their disability, the limitation period would reset each time a new payment was due. The one-year limitation only applied after a definitive denial of benefits or failure to provide further proof of disability.

This principle also applies to NS and PEI claims, where rolling limitation periods have been
interpreted similarly. Insured individuals have the option to either provide further proof of disability
or take legal action within one year of the insurer’s denial of benefits.

When a Denial of Benefits Triggers the Cause of Action

In all three provinces, NB, NS, and PEI, the limitation period for Section B claims is closely linked to
the insurer’s denial of benefits. This is especially relevant in cases where the claimant receives
long-term disability or medical benefits.

For instance, in the NB case of Vautour v. Gore Mutual Insurance Co., the court ruled that the
cause of action did not arise until the claimant’s disability insurance benefits expired. At that point,
the insured could certify continued total disability, and the one-year limitation period began.

In both NS and PEI, similar cases have highlighted how the limitation period starts when benefits
are denied or when the insured provides proof of continued disability. The courts emphasize the
need for prompt action once an insurer issues a denial letter or requests additional proof of
ongoing disability

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Several cases in the Maritime provinces provide guidance on when a cause of action arises for Section B claims .

In the Maritimes—New Brunswick, Nova Scotia, and Prince Edward Island—the question of when a
cause of action arises for Section B benefits plays a significant role in determining the limitation
period for legal claims. Whether due to ongoing disability benefits or an insurer’s denial of
coverage, understanding the trigger for the limitation period is essential to avoid missing the
window to file a claim.

Given the complexities and nuances of insurance law in these provinces, it iis vital to consult with a
knowledgeable personal injury lawyer to ensure your rights are protected. 

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