By Jordan W. Charness

Although he had been living in Quebec for over 20 years, he still retained the lilting tones of his native Philippines. His English is pretty well perfect and he has a basic knowledge of French as well. It’s true that sometimes, it is a wee bit difficult to understand him on the phone, particularly when he gets excited. However, he never thought that this would be the cause of an 11-month ordeal fighting his insurance company.

Sam had been insured with the same insurance company for the past 15 years. He had both auto and home insurance with the company. He paid his premiums on time and never once made a claim. Unfortunately, last October he had a car accident. It wasn’t a terribly big accident, or at least no one was hurt. He was in Ottawa at the time and although it was a Saturday he immediately called his insurance company to report the accident.

He’s not quite sure exactly what happened but it seemed someone was not paying attention and two cars collided. It happened on Bank Street and he was forced to leave his car in Ottawa because it was not in a drivable condition. Both parties waited for the police to arrive to fill out an accident report. The report was duly completed and a record number was given to Sam.

He called his insurance company and spoke to the duty person who was on for the weekend. He explained what happened and said that he was on Bank Street in Ottawa and it was near there that he left his car. To be doubly safe he called again on Monday and reported the accident one more time giving the same details. The car was eventually towed home where the damages were evaluated at over $3,200.

He was absolutely shocked to find out that his insurance company refused to honour his claim. Although he did have collision coverage the insurance company refused to pay a dime. The reason they gave was that in their opinion he had lied to them.

According to the insurance companies records of the conversations they had with him, he reported that he was involved in a hit and run. The insurance companies’ investigation showed that he was involved in a regular accident with another car where the driver had stayed and reported the accident. They believed that he was trying to avoid paying his deductible by claiming that it was a hit and run.

In addition, they relied on article 2472 of the civil code of Quebec which states that any misleading or false declaration given by an insured will lead to the loss of any right to payment for any damage related to the false declaration. Most other jurisdictions have similar legislation.

In this case the insurance company claimed that Sam’s report of a hit and run when he was involved in a regular accident cancelled his right to payment for damages to his car. They pointed out that this article is reproduced in the insurance policy itself and therefore they were within their rights to refuse to pay Sam for the damaged vehicle.

This paragraph is also used in many other insurance contracts and can apply to statements made when filling out the initial insurance application. For example if you marked down that the primary driver of your vehicle is the 42 year-old mother in the family when it turns out that it is really the teenage son, an accident by either mother or son may not be covered.

There have also been documented cases of people asking for life insurance and paying the lower premiums offered to those who are non-smokers. After their death it was proven that they actually did smoke at least occasionally. Insurance companies have successfully been able to refuse to pay out life insurance benefits because they had been lied to in the initial application.

In this particular case, Sam was adamant that he did not lie and that he had reported the accident fairly. In addition he pointed out that he had given the accident report number to the insurance company not once but twice. He noted that the police report clearly indicated that this was a two party accident where both parties remained at the scene. He was incensed that they had thought him stupid enough to have reported a hit and run and given a police report showing the opposite.

Notwithstanding this clear argument the insurance company dug in its heels and refused to pay him. He had no choice but to take them to court.

The judge listened to both sides and made the following ruling. He was convinced that there was a miscommunication on the part of the insurance company. He noted that neither English nor French was Sam’s mother tongue and perhaps that led to a small misunderstanding. Nonetheless he noted that Sam had reported that he had an accident on Bank Street in Ottawa and the insurance companies’ representative wrote down that his accident occurred at his bank. The judge ruled that this error was in no way Sam’s fault and that there was no lying on his part. The insurance company was ordered to pay Sam in full.

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