The insured was granted relief from forfeiture for failing to meet the contractually imposed deadline for submitting a claim for long term disability benefits.
Insurance law – Disability insurance – Exclusions – Policies and insurance contracts – Rights and duties of insured – Notice – Relief against forfeiture
Dube v. RBC Life Insurance Co., O.J. No. 42, January 7, 2015, Ontario Superior Court of Justice, M.A. Garson J.
The respondent was insured pursuant to a disability insurance policy issued by the applicant insurer. The respondent was involved in a motor vehicle accident on May 24, 2010, but did not notify the insurer until March 9, 2012 and did not submit a claim for long-term disability benefits until June 5, 2013. The insurance policy at issue required notice of claim to be given 30 days after the respondent’s disability began. It also stipulated that it must have been given 90 days after the disability began, and was absolutely required no later than 90 days plus one year after the disability began. The insurer denied coverage on the basis of the respondent’s breaches of the notification provisions. The respondent sought relief from forfeiture.
The court held that the respondent is bound by the notice provisions of the insurance policy. The court then considered the respondent’s claim for relief from forfeiture brought pursuant to section 328 of the Insurance Act, RSO 1990, c I.8, and section 98 of the Courts of Justice Act, RSO 1990, c C. 43.
First, the court determined that the conduct of the respondent was reasonable. The respondent’s employer had previously told the respondent he did not have long-term disability coverage. Furthermore, the respondent had been compliant with numerous medical record requests from his employer. Second, the court considered the gravity of the breach, which here was a delay of six months and 17 days. The court deemed this breach to be on the lower end of the spectrum, particularly in light of the fact that the respondent received misleading information from his employer. Finally, the court considered the disparity between the value forfeited and the damage caused by the breach being significant. Any prejudice to the insurer by way of a lost ability to conduct its own investigations and medical examinations would not outweigh the prejudice that would be caused to the respondent if he were unable to pursue the claim.
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