Accident victims pursue $600 million in lawsuits

Written By Aidan Macnab | Law Times

Six Ontario automobile insurers have been named in a series of class-action lawsuits by accident victims who are seeking millions in benefits they say they were denied because the insurer improperly subtracted the harmonized sales tax from their benefits packages.

Lawyers for the class members are seeking an injunction to have the insurance companies cease subtracting the HST from payable benefits. They are also asking the court for a damages assessment to have the insurance companies pay back to injured claimants the HST they charged them since 2010, when the tax was introduced. They are asking for punitive damages as well.

Six insurers are named in the suit: Aviva Insurance Company of CanadaIntact Insurance CompanyCertas Home and Automobile Insurance Company, Belair Insurance Company Inc.Allstate Insurance Company of Canada and Unifund Assurance Company.

The claim also accuses the Financial Services Commission of Ontario of turning a blind eye to the practice of the insurers after they were notified that their policies regarding the HST were not being followed properly.

Acting for the insurance claimants is Paul Harte of Harte Law PC, Kevin Kemp of Kemp Law PC in Alliston, Ont. and Jay Ralston of Murray Ralston PC in Barrie, Ont.

Harte says that, aside from the class-action lawsuits, the issue will require a response from the provincial government. He says it is a widespread industry practice and they are still investigating in order to add insurers to their list.

“You cannot sell auto insurance in this province without a licence from FSCO,” Harte says. “So, if the government wanted to stop this practice, they could stop it immediately by directing FSCO to take disciplinary action against the insurance companies that continue this practice and ultimately threaten their licence to sell insurance.”

NDP member Gurratan Singh has expressed interest in the issue, says Harte, but he has not heard anything from the Liberals or Progressive Conservative Party.

“We certainly hope that the new government has a lot more concern for the little guy — the small individual that’s injured in these accidents, because there are over 60,000 a year in the province that are injured,” says Ralston. The six claimants have claimed “general, special and aggravated damages” of $100 million each, for “personal injury costs and economic loss,” which would total $600 million.

According to an email from Teri Lehmann of Intact Insurance Company, which was part of a media brief provided by lawyers for the class action claimants, Intact modified its system so that HST no longer comes out of its customers’ benefits.

Ralston says Belair has also reimbursed some of its customers who were charged the HST.

In 2016, on behalf of the Ontario Trial Lawyers Association, then-president Adam Wagman wrote to CEO and superintendent of the FSCO, Brian Mills, to alert him of the practice by insurers regarding the HST.

Ronald Bohm, president of the OTLA, says that prior to that, members raised the issue within the OTLA.

“While individually they were often small amounts, it seemed like it was wrong and it ought not to have been taking place,” he says. “So, once we looked into it a little bit, [we] realized that the concerns were well founded.”

Bohm says the FSCO told the OTLA it was aware insurers had been misapplying the HST, that it had contacted them and those insurers had ensured the regulator they would not subtract the HST from benefits in the future.

In two 2017 decisions from the Ontario Licence Appeal Tribunal, Aviva was forced to pay the HST for injury claimants. In another Licence Appeal Tribunal decision between an injured claimant and the Motor Vehicle Accident Claims Fund, adjudicator Ian Maedel wrote, “It has long been FSCO’s policy that H.S.T. is payable in addition to any rehabilitation benefit.”

Responding to a request for comment, Aviva said via email that it is seeking clarification from the government on how the tax is applied to its customers.

“In fact, this is part of our commitment to continually explore ways to reduce or eliminate complexity for them and to increase trust in the insurance industry overall. We exist to help our customers in their time of need,” says Aviva Canada spokesman Fabrice de Dongo.

As the issue is before the courts, it is inappropriate to comment on the details, says de Dongo. In an emailed statement, Sarah Kennedy, director of corporate communications for Royal & Sun Alliance Insurance Company of Canada, which controls Unifund Assurance company, said, “As this matter is before the court, we cannot provide comment.”

Certas Home and Automobile Insurance Company is controlled by Desjardins. Its spokesman,  John Bordignon, said via email that the company was “unable to comment further.” Intact Insurance Company, Belair Insurance Company Inc. and Allstate Insurance Company of Canada could not immediately provide comment.

Malon Edwards, senior communications officer for the Financial Services Commission of Ontario, said via email, “FSCO is aware of the statements of claim involving FSCO. As the matter is before the courts, FSCO is unable to comment further.”

Proposed class actions allege Ontario insurers broke payment rules

By Shawn Jeffords

THE CANADIAN PRESS

TORONTO _ A series of proposed class-action lawsuits launched against major insurance companies in Ontario claim the firms have been shortchanging auto-accident victims for years by breaking rules that govern payouts.

Statements of claimed filed in the suits allege the companies did not pay or reimburse HST on benefits in some cases and included HST in the calculation of benefit entitlements in others  all in violation of rules set up in 2010 when the tax combining the federal goods and services tax and the regional sales tax was introduced.

“The insurers shortchanged thousands of auto-accident victims, reducing care benefits to injured individuals to boost already record profitability,” lawyer Paul Harte, who is part of the team that filed the legal action, said Thursday.

Insurance companies Aviva, Intact, Belair, Allstate, Unifund and Certas are named in the suits, which contain allegations that have not been proven in court.

The legal action also alleges Ontario’s insurance regulator _ the Financial Services Commission of Ontario _ has known about the HST issue for years but has failed to take action against it.

“They’re responsible for protecting the public and policing the industry,” Harte said. “The claim alleges that FSCO turned a blind eye to unfair industry practices even when they knew that members of the insurance industry were wrongfully denying the public benefits.”

According to the lawsuits, the insurance regulator directed insurance companies to pay applicable HST in addition to the costs of goods and services provided under accident benefit agreements, and told them not to include applicable HST within calculation of caps on benefits.

The lawsuits seek a combined $600 million in compensation and an injunction to prevent further alleged breaking of the rules around payments of the HST.

Harte said 60,000 injuries occur every year in Ontario as a result of vehicle accidents. And while six companies are named in the series of lawsuits, the alleged issue could be more widespread, he added.

Jill Nicholson, a 34-year-old Ottawa resident who works in law enforcement and is a plaintiff in the legal action, said she was involved in a serious accident while riding her motorcycle home from work in June 2012.

Over the past six years she has had six surgeries and exhausted the benefits available to her through her insurance, she claimed. Her lawyers alleged her insurer had not paid the HST on her benefits as they should have and deprived her of needed money for treatment she still requires.

“As I’ve run through all my benefits to this point, I no longer see a psychologist and I only see a massage therapist minimally so that I can afford to continue going,” she said. “However, I suffer from chronic pain so every day that I don’t get therapy is just more pain added to me for the next day.”

A spokesman for Aviva said the company has sought to clarify rules around HST with the government.

“This is part of our commitment to continually explore ways to reduce or eliminate complexity (for customers), and to increase trust in the insurance industry overall,” Fabrice de Dongo said in a statement.

Certas and Unifund said they couldn’t comment on the legal action as it was before the courts while the three other companies named in the suits did not immediately respond to requests for comment.

A spokesman for the Financial Services Commission of Ontario said the agency was aware of the lawsuits but couldn’t comment on them as they were before the courts. Finance Minister Vic Fedeli, whose ministry oversees the agency, also declined to comment.

Trick or treat! Eight tips for Halloween Safety

It’s the time for pumpkins, candy and costumes, and CAA South Central Ontario (CAA SCO) is reminding parents and motorists to practice patience, to ensure a safe and enjoyable Halloween for everyone.

halloween-2016_1

CAA SCO recommends four tips motorists can follow this Halloween.

1.

Don’t use a cell phone while driving. Turn off your cellphone and put it away.

2.

Drive below the speed limit in residential areas, and be extra alert behind the wheel.  

3.

If you are dropping or picking up a group of children, turn on your hazard lights while they exit from the car to alert other drivers.

4.

Be extra vigilant while backing your car out of its parking space.

Parents can ensure children have a safe night of trick-or-treating with these tips:

1.

Pick bright colours for Halloween costumes, or use reflective tape around the outfit to improve visibility to drivers.

2.

Costumes should fit well and not drag on the ground, as they can pose a tripping hazard.

3.

Replace your child’s mask with makeup to make sure that they have a clear view of their surroundings.

4.

Remind children to follow street crossing rules. Always look both ways before walking across the street.

“In the excitement of Halloween, children sometimes forget to watch for cars. For this reason it’s essential that parents and guardians accompany their children, or if they are old enough, make sure they are with a group of responsible friends,” said Jeff LeMoine, Communications Consultant, CAA SCO. “Motorists should also avoid all distractions behind the wheel to help keep everyone safe,” he added.

For more tips on Halloween safety, visit http://blog.caasco.com/community/heres-how-you-can-have-a-safer-halloween-night/.

For over a hundred years, CAA has been helping Canadians stay mobile, safe and protected. CAA South Central Ontario is one of nine auto clubs across Canada providing roadside assistance, travel, insurance services and member savings for our 2 million members.

SOURCE CAA South Central Ontario

Does your small business need cyberattack insurance?

Front Row Insurance says small businesses in Canada are so poorly covered because the process is too complex and costly

For many small businesses, a fire that destroys all of their operations might be preferable to getting hacked. At least in the case of the fire, there’s a good chance the damages will be covered by insurance.

Cybersecurity protection for losses of data or network assets is in its infancy in Canada, at least as far as small and medium enterprises are concerned. Only about 7 per cent of small businesses – those with fewer than 50 employees – had cyberliability insurance in 2017, according to Statistics Canada.

Medium-sized businesses, or those with 50 to 249 employees, were slightly more prepared at 14 per cent, versus 24 per cent for large companies.

The costs are huge, meanwhile, with reports estimating that cybercrime costs the Canadian economy between $3-billion and $5-billion a year.

Figures from the United States suggest that nearly half of cyberattacks are aimed at small businesses, many of which never recover. About 60 per cent of companies go out of business within six months of an attack, according to U.S. National Cyber Security Alliance.

Part of the reason for why small businesses in Canada are so poorly covered might be because the process is too complex and costly.

“They were getting these applications that we were sending them [on behalf of] insurance carriers that were extremely complicated, asking very complex questions,” says Mike Groner, account executive for Front Row Insurance. “These were also clients who weren’t in a position to pay six, seven, even eight-hundred dollars a year for cyberliability insurance.”

To that end, Toronto-based Front Row has launched its own product, Hackinsure, which offers coverage for cybersecurity issues ranging from theft, fraud and ransomware to business interruption resulting from data loss.

Businesses can sign up online for the product, underwritten by Swiss insurer Chubb, without having to talk to a broker. Coverage ranges from $100,000 to $1-million, while annual premiums begin at $200.

Mr. Groner says Front Row was able to negotiate with Chubb to remove about 80 per cent of the standard cyberliability application that bigger enterprises typically must deal with.

Such applications generally ask companies to spell out corporate structures, including listing the names of various directors, executives and their responsibilities. Front Row boiled it down to only the most pertinent information.

“We removed any questions where it would have absolutely no bearing on the premium and quote itself,” Mr. Groner says. “They’re simple questions, like are they using Windows 7 or higher? Are they using an antivirus program? Are they using firewalls? Are they using backup-and-recover procedures? It doesn’t get invasive beyond that.”

Insurance industry experts say the problem with poor coverage may also stem from a lack of education and regulatory involvement. About 19 per cent of small and medium enterprises in the United States and 15 per cent in Britain are estimated to have standalone cyber coverage.

“Canadian companies are very bad with data,” says Mary Hardy, professor of actuarial science at the University of Waterloo. “There’s not so much oversight and requirement to produce data like there is [elsewhere].”

The federal government has taken notice of the problem, which was the impetus for a renewal of the National Cyber Security Strategy this past June. The plan is devoting $500-million over the next five years to help educate the public on cybersecurity and to develop expertise in the field.

Jeremy Depow, vice-president of policy and research for the Information and Communications Technology Council, says products such as Front Row’s HackInsure are positive steps toward spreading awareness. Companies getting hacked is no longer a question of if, but rather when, he says.

“Hopefully it starts to force businesses to live up to some kind of standard,” he says. “Insurance could be a way where you build in those standards to at least get small businesses up to the basics.”

The cybersecurity insurance market is expected to balloon over the next few years, hitting US$17.55-billion by 2023 from US$4- billion in 2017, according to a Reuters report.

Until recently, Front Row has focused mainly on providing insurance products to the entertainment industry, but the company has moved to the cybersecurity market by customer demand.

How Much Car Insurance Do I Really Need? – Accident Benefits

Article by Adam Wagman

Have you ever made a seemingly minor decision that you really thanked yourself for later on? For example, keeping that receipt that you were about to throw away, only to discover months later that you need that receipt for the product warranty? In the case of automobile insurance, making what might seem like a minor decision to purchase optional accident benefits right now is something that you and your family might really be thankful for in future years.

Accident benefits, also referred to as no-fault benefits, are a mandatory part of every auto insurance policy in Ontario. Those benefits pay for treatment, care, income replacement, and some other expenses, if you or members of your family are hurt in almost any type accident involving an automobile (car, truck, snowmobile, ATV, bikes or pedestrians hit by cars, etc.).

No one expects or anticipates they will ever be in a position where they need to draw upon potentially thousands of dollars in accident benefits. The whole point of purchasing insurance is to pay for something that we hope we will never need! Unfortunately, we all know someone who has been involved in a car accident, and chances are, at some point during your lifetime, you or someone in your family will need to access those benefits. Tragically, each year in Ontario, tens of thousands of people are involved in collisions that result in personal injuries. Several hundred of these people will sustain catastrophic injuries that leave them with debilitating injuries and permanent disabilities that will profoundly affect their lives and the lives of their loved ones.

Fortunately, anyone involved in a motor vehicle accident in Ontario can make a claim for benefits under the Statutory Accident Benefits Schedule (SABS). Unfortunately, with recent reductions to these benefits, you may not be adequately covered if you sustain a significant injury.

In this blog post, I’ll outline what’s covered in the SABS and what other types of coverage you may have, and finally explain why you should consider adding optional benefits to your auto insurance policy.

What Are The Standard Accident Benefits?

Any person injured in a motor vehicle accident in Ontario – even if they are at fault for the accident – is eligible to claim accident benefits proscribed by the SABS. Whether you’re a driver, passenger, pedestrian or cyclist, if you’re injured you will be able to make a claim:

  • through your own auto insurance policy;
  • through the policy of another motorist involved in the accident if you do not carry auto insurance, or;
  • through the Ontario government’s Motor Vehicle Accident Claims Fund if no one involved in the accident has insurance

The SABS outlines the standard accident benefits that must be made available in every insurance policy. The maximum amounts you can claim for the various benefits (and the definitions used to qualify for those benefits) have changed frequently over the years. Currently, the SABS categorizes injuries as catastrophic, non-catastrophic and minor. Depending on the extent of your injuries and whether you satisfy specific qualifying criteria, standard benefits may cover the following expenses:

  • Medical & Rehabilitation;
  • Attendant Care;
  • Housekeeping & Home Maintenance;
  • Income Replacement;
  • Caregiver;
  • Non-Earner, and;
  • Cost of Examinations

Howie, Sacks & Henry has created a handy chart showing the amounts of these basic entitlements.

What Other Coverage Do I Have?

In an earlier blog I outlined the other mandatory parts of every auto insurance policy in Ontario. Every Ontario driver is required to have a policy with a minimum of $200,000 in third party liability insurance (though $2 million is recommended), direct compensation (to cover property damage if you are not at fault in the accident), and uninsured automobile coverage (to protect you in the event of a hit and run or if you are involved in an accident with an uninsured or underinsured driver).

I also discussed some of the types of optional coverages you can add to your policy, including the Family Protection Endorsement. This endorsement will allow you and/or dependant family members to claim up to the amount of your third party liability insurance coverage if an at-fault driver cannot cover the amount of your damages claim with their own third party liability insurance limits.

It’s important to remember that while standard auto insurance policies provide a minimum amount of coverage, in the event of a serious accident, this coverage can be exhausted quickly.

How Has SABS Changed?

If you clicked the link to the SABS chart above, you will have seen how the government has made changes to the SABS benefit limits over the years. The changes in 2016 substantially lowered the amount an injured person is able to receive in Medical, Rehabilitation, and Attendant Care benefits.

Prior to the changes in 2016, those victims with a catastrophic injury could access up to $1 million in Medical and Rehabilitation benefits plus up to $1 million for Attendant Care benefits over their lifetime, for a total of $2 million. Injured victims with non-catastrophic (but not “minor”) injuries could access $50,000 for Medical and Rehabilitation benefits over 10 years and up to $36,000 over 2 years for Attendant Care benefits, for a total of $86,000.  As recently as 2010, the total available for those non-catastrophic benefits was $172,000!

The cuts to benefits in 2016 were very significant. Catastrophically injured victims can now only access $1 million combined for Medical, Rehabilitation, and Attendant Care benefits over a lifetime, a 50% reduction from the previous limit. Victims with non-catastrophic injuries can now only access a combined $65,000 for these benefits, over 5 years, over a 60% reduction from the limit in 2010 .

As an experienced personal injury lawyer who has represented clients with significant, life-altering injuries, I can tell you that the current SABS benefits (both catastrophic and non-catastrophic) are woefully inadequate for many of my clients. The cost of caring for victims with catastrophic injuries – particularly if they are younger – can be astronomical. For example, if you or a loved one sustains a traumatic brain injury or spinal cord injury that requires ongoing rehabilitation therapy and prevents you from living independently, the benefits could well be exhausted in only 5-10 years!

Without additional insurance coverage, your or your loved ones will have to pay for this care and therapy out of pocket. These expenses can eat away at any savings you have, force you to sell any assets you might have, and create huge debt.

Victim’s rights advocates, including personal injury lawyers, have warned the government that the cuts to the SABS have the potential to put people in financial jeopardy, but so far it seems that the desire to save insurance companies some money has trumped the need to protect the injured.

What Are Optional Benefits and Do I Need Them?

While the mandatory minimum insurance limits will likely come up short if you are ever critically injured in an accident, fortunately there are ways to better protect your family.

Insurance companies must offer optional benefits packages that provide additional levels of coverage.  You can purchase the following optional benefits to increase the Medical, Rehabilitation and Attendant Care coverage:

  • in the event of a non-catastrophic injury, up to $130,000
  • in the event of a non-catastrophic injury, up to $1 million and in the event of a catastrophic injury, up to $2 million
  • in the event of a catastrophic injury, an additional $1 million

We encourage everyone to speak with their broker or insurance company to find out the cost of adding any of these coverages to your policy. Generally, for just a few dollars a month, you can purchase the optional benefits to protect your family.

Other optional benefits can:

  • Increase the weekly income replacement benefit from $400 to $600, $800 or $1000 (consider this option if you don’t have a long term disability policy through work or privately)
  • Expand the caregiving or housekeeping benefit to persons with non-catastrophic injuries (consider this option if you or your spouse are a stay at home caregiver for young children)
  • Increase the death and funeral benefit (consider this option if you don’t have, and cannot otherwise get, life insurance)

For your own peace of mind and to protect your loved ones in the event of a serious injury, I highly recommend purchasing optional insurance benefits for Medical, Rehabilitation and Attendant Care. These can be significant drains on your finances once the mandatory limits are exhausted. Deciding to add other optional benefits will depend on a number of factors, including your income level and your desire and need for extra care or coverage.

The likelihood that you will be involved in a motor vehicle accident where you sustain a life-altering injury is low. But if you ever have the misfortune of becoming one of the thousands of Ontarians each year who do suffer significant injuries, you will really thank yourself for taking the time to talk to your insurance provider to ensure you have adequate coverage for you and your loved ones.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

Kelowna resident named one of Canada’s top ten insurance brokers

KelownaNow | John Luke Kieper

A Kelowna insurance broker has been nationally recognized by a well know business magazine.

Photo Credit: Darren Hull

Garrett Jones, regional manager of commercial insurance at Valley First, a division of First West Credit Union, has been recognized as a “Top 10 Under 40” by Canadian Insurance Top Broker Magazine.

Jones was selected as one of the best and brightest in the Canadian Insurance landscape for his leadership and commitment to the community.

“I was surprised and honored to be named amongst this very talented group who are shaping the future of our industry,” said Jones. “When I reflect back on my career, I’ve learned the importance of working for an organization whose values align with my own. It’s these shared values that enable me to have a strong connection locally to help our communities and members thrive.”

Jones is actively involved in the community through the Okanagan Young Professionals Collective and he is currently volunteering with the Okanagan Community Food Bank to offer operational expertise and support. He has also created an internal committee at Valley First to help young professionals within the organization grow closer to the community.

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