CR369
Impairment Benefit
Physical impairment benefit; claim for permanent loss of use of ankle admitted but claim for permanent loss of use of leg declined; combination of loss of use of limbs
Background:
1. The complainant developed peripheral neuropathy, a condition that damages the nerves, in his right foot. The condition is said to be extremely painful and restricted the use of the affected foot. The complainant became unable to drive his car and he could no longer perform his occupation as a travelling salesman.
2. The policy did not provide for occupational disability but the insurer admitted the claim for the loss of the use of the foot below the ankle and paid the complainant 25% of the physical impairment benefit in accordance with the policy provisions.
3. The complainant argued that even though the medical evidence showed that the condition was present in his right foot only, he was not only inhibited from using his foot but his whole leg. He claimed that he was entitled to the percentage allocated for the loss of the use of the full leg, being a further 25%,as provided in the policy as follows:
“Claim events for Physical Impairment Benefit
Permanent impairment Maximum per insured life %
One foot (ankle and below) 25%
Both feet 50%
One leg below the knee 50%
Both legs (above the knee, including the knee and below) 100%
…
4. Furthermore, the complainant was of the view that the policy wording provided for his entitlement to 100% of the benefit, due to the combined loss of the use of his foot and leg. The complainant relied on the following provisions in the policy:
“Total and permanent loss of use and/or loss of:
Combination of any two of the following: 100%
Hand
Foot
Leg
Arm”
Discussion:
5. The office agreed that the loss of the use of the foot below the ankle also rendered the rest of the leg of no use and that the complainant was entitled to 50% of the benefit for the loss of the use of one leg below the knee.
6. However, the complainant’s view, as set out in paragraph 4, above, that because he had no use of a combination of a foot and a leg, he was entitled to his full 100% benefit, required consideration. The office’s stance was that the provision in paragraph 4 cannot be interpreted to justify a benefit of 100%, as the provision must be interpreted in such a manner as not to conflict with the provisions of the policy set out in paragraph 3, above.
7. To give proper meaning to the provision set out in paragraph 4, above, it must be interpreted in such a manner that entitles the insured to 100% if, for instance, he loses the use of a leg and a hand or if he loses the use of an arm and a foot. It was decided that the provision set out in paragraph 4, above, did not apply to the insured and that a benefit of 50% for the loss of his leg below the knee was warranted. A further consideration was that, on this interpretation 50% of the benefit would be preserved for future claims for the impairment benefit.
Result:
8. The insurer agreed to pay the complainant a further 25% of the benefit, having paid an initial 25%. However, the insurer later decided to pay the complainant the balance, bringing the total benefit to 100%, with an acknowledgment that the wording of the policy in regard to the combined loss of limbs, required clarity and that this type of policy would no longer be marketed.
NvC
April 2016
