What is the likelihood of an insurer overpaying a plaintiff in a Section D auto accident?
Nova Scotia, Canada
The following excerpt is from MacKean v. Royal & Sun Alliance Insurance Company of Canada, 2015 NSCA 33 (CanLII):
It is especially unlikely that an insurer would overpay its insured in Section D cases, because of the doubtful prospect of any recovery from the defaulting third party (see for example, Somersall v. Friedman, 2002 SCC 59, para. 71). This circumstance is additional incentive for an insurer to pay no more than it must – i.e. no more than would be reasonable. As well, in limits cases where coverage is almost always exceeded, settlement at the insurance limit is further assurance that the settlement amount is reasonable. All these factors favour the reasonableness of settlement in such cases.
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