Some of my clients have the ability to access ‘Long Term Disability’ (also known as ‘LTD’) benefits through extended health insurance with their employer or provider. Obviously, the ability to access LTD benefits will depend upon the extent of the injuries from an accident and the specific insurance policy.
Typically LTD benefits amount to payment of your monthly income at a reduced rate (often somewhere in the 50% to 60% range).
The at-fault insurer typically has the right (through legislation – see Section 570 of the Insurance Act ) to argue that they ought not to pay any income loss to you that you have recovered from a LTD insurer!
Generally speaking the Courts have tried to prevent ‘double recovery’ when it comes to income loss (i.e. you get paid income replacement from your LTD insurer and then also claim that same income replacement from the at-fault insurer). There are some exceptions to this (which depend upon the LTD insurance contract), and you should get legal advice as to whether you may actually be able to claim both LTD benefits and income loss from the at-fault insurer (for the same amounts that you already received from the LTD insurer).
Depending upon the contract that your employer has with the LTD insurer, you may have the responsibility to pay back the LTD insurer from any settlement that you get from the at-fault party. This is known as the LTD insurer’s ‘right of subrogation’. Not every LTD insurance contract requires the insured (you) to pay back the LTD insurer from settlement funds. There are some legal principles that require that you be fully ‘indemnified’ (compensated for your injuries) before any ‘subrogated’ claims (e.g. the claim by the LTD insurer – made through you is a subrogated claim) are to be paid. These issues are something that your personal injury lawyer should advise you on.
Another issue that can arise is whether the at-fault insurer can ‘assume’ that you will continue to receive LTD benefits into the foreseeable future (thereby reducing your future income losses from the accident). It is unlikely that any LTD insurer will agree in writing that they will pay LTD benefits into the foreseeable future and if you are able to obtain an acknowledgement of that from the LTD insurer, you can use that admission against the at-fault insurer’s claims that the LTD insurance benefits would result in reduced future income losses.
As you can see from the above, there are many issues that can arise in the context of claims where the client has access to LTD insurance benefits. It is best to hire an experienced personal injury lawyer to assist you with these issues.