Priority Between Income Replacement Benefits After an Accident


After a car accident, an injured person may have access to multiple forms of income replacement insurance. However, there is legislation and legal rules in place to prevent double recovery, and to determine which coverage provider takes priority, and pays out first.

Types of income replacement that may be available after a car accident

Anyone that is seriously injured in a car accident will have access to statutory accident benefits, and if they are unable to return to their regular employment as a result, they can make a claim for income replacement benefits (IRBs).

In addition to accident benefits, many Canadians that are unable to work as the result of an ongoing disability may also have access to Canada Pension Plan benefits. Access to these disability benefits depends on past contributions made to the Canada Pension Plan.

Finally, many Canadians have income replacement coverage through private or employer short or longer term disability insurance plans.

Which insurance provider takes priority after a car accident?

If you qualify for IRBs (which we discussed in detail here) through accident benefits, the payments will be reduced by any other income replacement insurance to which you are entitled, including CPP and private coverage. This means that any privately available coverage is going to pay you first, and “topped up” by your accident benefits insurer if the amount you receive is lower than the available IRB amount.

If a third party is liable for your injuries, you may also succeed in winning compensation in a civil claim. If you are awarded damages for past income losses, you may be required to reimburse your private insurer for any amounts that were paid out under a disability policy.

Experienced disability and insurance lawyers for accident victims

Determining how to access income replacement insurance following an accident can be very complex, and assistance from an experienced disability insurance lawyer can help ensure that you receive the maximum benefits to which you are entitled.

At Jasmine Daya & Co., we have over four decades of experience assisting the victims of car accidents, and can help with claims for coverage through accident benefits or private insurance plans. We give free consultations for all new clients. To discuss an accident benefits or any other insurance matter with one of our lawyers, contact us online, or by calling 416-967-9100.