Earlier this year, the Ontario Court of Appeal ruled that disability insurers in Ontario do not have to provide written notice of the applicable Limitation Period when a claim is denied, other than as set out in theInsurance Act, R.S.O. 1990, c. I.8, as follows:
“Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Limitations Act, 2002.”[ii]
Mr. Usanovic worked as an eavestrough installer who fell from a roof in 2007. He claimed LTD benefits from Penncorp and was paid until November 2011 when Penncorp terminated his benefits on the basis that he no longer had a “total disability” as defined in the policy.
Penncorp, through its’ lawyer wrote to Mr. Usanovic on January 12, 2012 explaining that since his benefits had been paid for 24 months, the test for “total disability” had changed from disability from his “own occupation” to disability from “any occupation”.The letter also invited Mr. Usanovic to provide further information within 60 days. The requirement to include the above information did not come into affect in Ontario until after January 12, 2012, so Penncorp was not obligated to include that statement. [iii]
It wasn’t until 2015 that Mr. Usanovic saying he considered doing something earlier but couldn’t afford a lawyer. The lawsuit was commenced in April 2015, which resulted in Penncorp bringing the motion to have the case dismissed.
The Court of Appeal has rejected the notion that insurers in Ontario have a good faith obligation to provide notice of the applicable limitation period and the Court has suggested that this requirement is up to the Ontario government if they choose to amend the Insurance Act further.
Both Alberta and British Columbia have regulations that require insurers to provide such notice, but this constitutes a regulatory requirement rather than a good faith obligation.[iv]
As it stands, the Ontario government has not done anything to amend the Insurance Act to require the same type of notice as required in B.C. or Alberta.
In our experience, most insurers are now including catch-all notices in their denial letters that often make reference to multiple provinces, which are very confusing to most people who are not familiar with disability insurance law.
LTD Claim Lesson
The lesson for people whose LTD claims have been denied is to get legal advice as soon as your claim has been denied so that you can clearly understand any deadlines that may apply. Don’t fall into the same trap as Mr. Usanovic, who felt he could not afford a lawyer. In our office the initial consult is free and if we’re able to accept your case, no fees are charged unless we recover money for you from the insurance company. You have nothing to lose by speaking with a lawyer to see if you have a case and also to make sure you understand what deadlines apply to your case. If the deadline passes, any chance of recovering additional LTD benefits will have been lost.
[iv]Insurance Regulation, B.C. Reg. 403/2012, s. 4,https://www.canlii.org/en/bc/laws/regu/bc-reg-403-2012/latest/bc-reg-403-2012.html#sec4_smooth and