Volume. 5 Issue. 49- November 10, 2021
This week we review a coverage case and a limitation period case both quite interesting reads.
In the coverage case, the Tribunal found that an Applicant driving without liability insurance, was not barred from proceeding with a claim for IRB, as it was determined that he neither knew nor reasonably ought to have that this was in fact the case.
In the Limitation Period case, the Tribunal considered the effectiveness of a March 2015 IRB denial sent to the insured person, but not delivered to his counsel that was subsequently retained until February 2019.
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Driving Without Insurance However Still Entitled to IRB
No Insurance, No Problem – Darrin Vaillancourt found himself without liability insurance while operating his motorcycle precluding him from receiving disability benefits. He had, in November 2016 requested a change to his coverage, as his motorcycle was in storage and was not being driven. Then in late spring/early summer 2017 he took the motorcycle out of storage, without changing the coverage, and ultimately met with an accident that resulted in his being injured and disabled from work.
Intact (19-009063), took the off coverage position. At issue therefore was whether the exclusion in s. 31(1)(a)(i) of the Schedule applied, namely that disability benefits were not payable, as Vaillancourt was driving the vehicle whilst he knew or ought reasonably to have known that he or she was operating the automobile while it was not insured under a motor vehicle liability policy. Vaillancourt agreed that there was no liability coverage in force, however contended that he found out for the first time after the accident.
The Tribunal noted that it “does not matter whether the applicant was wrong or made in error in his knowledge of his insurance coverage, what matters is what the applicant himself understood the coverage to be.” Vaillancourt’s broker had confirmed the requested change in cover, advising him in part that “we will send request to the insurance company to remove the road coverages from the [Motorcycle]…we cannot issue a liability slip for the [Motorcycle] as it has no road coverages.”
Vaillancourt testified that he was aware “road coverages” had been removed, however he took that to mean that “if he was involved in an accident that the property damage would not be covered. Vaillancourt testified that it was only collision coverage that he wanted removed as he understood that if he removed anything further that it would cancel the policy of insurance.”
Both brokers agreed that “this was not explained to the applicant nor does the term road coverages show up in the policies of insurance. Both brokers as well confirm that they did not know the implications of the removal of liability on the access to the accident benefits.” The Tribunal found there to be no evidence to refute the Applicant’s testimony that he did not know what road coverages meant nor the consequences of removing them.” Therefore, “To ask the applicant to connect that the removal of road coverages means to remove liability coverage is not reasonable especially when this was not explained to the applicant.”
Further, the certificate of insurance “does not state that there is no liability coverage on the motorcycle. What it does state is that there is no bodily injury and property damage. The respondent has provided no evidence that the applicant knew or ought reasonably to have known that bodily injury and property meant liability coverage.” Vaillancourt “did not connect the dots between the removal of road coverages and no updated liability slip to mean there was no liability coverage on the motorcycle.” Therefore, Vaillancourt was not precluded from claiming disability benefits due to the exclusion in s. 31(1)(a)(i) of the Schedule.
“Adequate” Denial Not Effective Until Delivered to Counsel, 4 Years Later
Denial Not Copied to Counsel Not Effective – Injured in a January 2015 accident, Belanger in 19-013755 v Intact had received a letter sent directly to him from Intact confirming a March 2015 (effective January 2015) denial of IRB based upon him having confirmed a work return. Belanger retained counsel in June 2015 who had initially requested a copy of the AB file, in addition to a breakdown of the benefits paid to date.
In January 2016, the insurer sent a release and Settlement Disclosure Notice directly to Belanger. In April 2016 counsel wrote the insurer again, indicating that sending these documents directly to Belanger was improper and violated the solicitor-client relationship. Not until July 2018 did Intact advise counsel that the matter had resolved on a full and final basis. Belanger continued to work through to November 2018 at which time he stopped working, and counsel confirmed that the matter was not resolved as suggested by the insurer.
On February 15, 2019, Intact advised that it would not consider further IRBs, based upon the March 2015 denial, further confirming at this time that the stoppage letter had not been provided to counsel until February 15, 2019. The Tribunal was left to determine whether the limitation period began running March 2015 or February 2019.
Despite the insurer having for a fact delivered the required notice to the insured person, as required under the Schedule, it was found that they “did not deliver the March 26, 2015 IRB stoppage letter to the Applicant’s counsel in accordance with section 64 of the Schedule until February 15, 2019. Therefore, the two-year limitation period within which the applicant could apply to the Tribunal to dispute Intact’s decision regarding the IRBs did not expire until February 14, 2021.” The Respondent’s failure to provide the requested complete accident benefits file to counsel within a reasonable time frame was prejudicial to the Applicant.” The Tribunal found it unfair to allow reliance upon a March 2015 denial given the failure to provide a copy to counsel within a reasonable period of time.
Belanger had also argued that a “language barrier” prevented his understanding of the denial notice. However the Tribunal found that Belanger could have asked his broker or the insurer for assistance. An “applicant cannot claim that they did not understand the content of a letter and its implications when they made no request and no effort to have the document translated into a language of their preference.” Further, it would be reasonable to expect that Belanger “would know, at the very least, that it is pertaining to his motor vehicle accident claim. Consequently, it is reasonable to assume that he would know how important it would be to understand the content of such a letter. The facts point to the applicant seeking assistance from his broker to complete the application, but he did not seek the Broker’s help to understand the IRB stoppage letter.” Despite this, it does not appear that it would have been “reasonable to assume” that the Applicant would have sought said assistance through his chosen counsel.
Related LAT inFORMER Issue(s):
$10,000 S.25 IRB Report Not Payable & IRB Exclusions – No Insurance & No Licence
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