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Case of vanishing insurance Don’t let insurers cancel your policy retroactively, or take away your right to sue

BY ALAN SHANOFF ,TORONTO SUN 

Motor vehicle insurance is compulsory in Ontario.

Driving without insurance can lead to fines, licence suspension and vehicle impoundment.

It’s also financially risky.

Uninsured drivers are personally responsible for any accidents they cause.

But what isn’t so obvious is that they also forfeit the right to sue other car owners or drivers.

The purpose of this law is simple.

We don’t just want to keep uninsured drivers off the road.

We also want to prevent those who haven’t paid into the pool of insurance premiums from suing or obtaining money from insurance companies and drivers who have paid into that pool.

This law makes sense.

What doesn’t make sense occurs when an insurance company tries to use the law to retroactively void an insurance policy, to take away an injured driver’s right to sue.

That’s what happened to Wayne Radwan Alof.

Alof obtained car insurance in Nova Scotia, where his car was registered.

He moved to Ontario and had his car registered in Ontario in February, 2010.

He had a discussion with his insurance company after moving to Ontario, advising it he didn’t know if the move was going to be permanent.

Alof had the misfortune of being in an accident in Mississauga in July, 2010.

He apparently suffered serious injuries and sued the other driver.

One month after reporting the accident his insurer, TD Insurance, notified Alof his insurance had been retroactively voided as of the previous February, due to a failure to advise the insurance company that his car had been registered in Ontario.

So, Alof had insurance as of the date of the accident, but his insurance company retroactively withdrew the insurance after the accident, leaving Alof in a precarious position.

Could this “now you see it, now you don’t” insurance policy result in a retroactive forfeiture of his right to sue to recover compensation for the injuries he suffered in the July accident?

That’s precisely what the other driver’s insurance company argued in a court motion to dismiss Alof’s lawsuit.

The motion was argued in January with a decision released in April.

Superior Court Justice Wendy Matheson ruled the lawsuit could proceed.

She applied some common sense, ruling that regardless of TD Insurance’s attempt to retroactively void Alof’s policy, the fact remained that at the time of the accident Alof did have insurance coverage, so he did have the right to sue.

I can’t help but think insurance companies and their lawyers stay up all night trying to dream up ways of defeating valid claims.

Fortunately, we have many good judges who stand ready to protect our rights.

Leassons to be learned

But there are some lessons to be learned in this case.

Any move, from one province to another, to a different city or town, or even within the same city or town, can trigger a change in risk for your auto insurance.

Changes in the use of a vehicle and vehicle modifications, even some cosmetic ones, can also lead to a change in risk.

Changes in ownership and the addition of a new driver also trigger changes in risk.

It’s important that any potential changes in risk be reported to your insurance company.

Ask for an email address so you can send an email and obtain a record of your disclosure.

Your insurance company may decide to modify the premium — up or down — but you will have the peace of mind of knowing your coverage is intact, as is your ability to sue others for your losses.

Failure to report a change in risk can lead to the cancellation or voiding of your policy.

If you are in an accident your insurer may deny coverage.

Do the right thing. Even if in doubt, report all changes.

Do Ontario accident victims heal more slowly?

By Donald Horne  19 Jun 2014

 It is a question brokers within the province are asking after looking at the statistics, especially when Ontario insurers are trying to meet the 15 per cent premium targeted cut.

 “In provinces other than Ontario, accident victims heal and they heal quickly. And we have the science to prove it,” says Don Forgeron, president and CEO of the Insurance Bureau of Canada. “This isn’t just an opinion. It’s a fact. A peer-reviewed study published in 2010 in the Journal of Occupational and Environmental Medicine showed that whiplash victims of collisions in Alberta have shorter recovery times following treatment than their counterparts in Ontario.”

 Studies reveal that at the sixth-month mark, more than half of all whiplash victims in Alberta have recovered. In Ontario however, only a third have recovered in the same sixth-month period, and yet the average premium paid by policyholders in Alberta is 25 per cent less than in Ontario.

 “And it should be noted the streets of Alberta’s cities are not strewn with accident victims,” says Forgeron. “(Alberta has) an affordable product with better post-accident recovery. Perhaps we should be studying our neighbours more closely.”

 Forgeron does acknowledge that the industry needs to “stand up” for those who are paying the bills.

 “Car accident victims who live in Alberta, Nova Scotia, New Brunswick, and other provinces in this country recover just as quickly from their injuries as Ontario drivers do and they pay far less for their insurance. Why?” he asks. “Because the benefit packages are under control; because they are linked to the science of recovery and there are logical limits in place.”