Limitation Periods in Long-Term Disability Claims – Usanovic v. Penncorp[i]
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.
[ii]https://www.canlii.org/en/on/onca/doc/2017/2017onca395/2017onca395.html, par. 41
[iii]https://www.canlii.org/en/on/onca/doc/2017/2017onca395/2017onca395.html , pars. 3-6
[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
Fair Practices Regulation, Alta. Reg. 128/2001, s. 5.3,https://www.canlii.org/en/ab/laws/regu/alta-reg-128-2001/latest/alta-reg-128-2001.html#sec5.3_smooth
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A note from our long term disability lawyers
Taking a medical leave from work is not an easy decision to make. Concerns about providing for yourself and your family and keeping your job may cause you to want to push through your pain, but this won’t make your problems go away. Stopping work is often the smartest decision for your long term health and well-being, and your disability benefits are there to provide you with financial support until you can return to work.
If you have made the tough decision to stop working and apply for your short term disability or long term disability benefits, you may feel overwhelmed by the process and have questions that your employer and your insurance company are not able or willing to answer. Share is There to see you through and answer your questions.
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We understand that things have not been easy for you over the last little while. Your health has been suffering, you are unable to work, and now your insurance company, who was supposed to be there in your time of need, has decided they will not pay your disability benefits or respect your disability claim. These benefits exist to provide you with the financial support you need so that you can focus on your health and rebuilding your life. It is unfortunate that your insurance company has not lived up to its promise. If your disability claim has been denied, we will fight to get you the benefits you are entitled to. Our disability lawyers have helped thousands of Canadians get their long term disability benefits over the past 35 years, and we can help you too.
Our experienced disability lawyers can fight back on your behalf
Share Lawyers believes that every client who is dealing with a disability claim deserves superior personal service. To achieve that goal, we have developed our team of experienced, compassionate, and caring long term disability lawyers, law clerks, and administrative staff to meet all of your needs. Our team of experienced long term disability, life insurance, employment, and critical illness insurance lawyers have made successful claims against many insurance companies, third-party administrators and employers.
If you are unable to work, your disability benefits should be there to provide you with the financial support you need. While your insurance company may be focused on finding ways to avoid paying your claim, our focus is on what is in your best interest. When Share Lawyers gets involved, you have an entire team of lawyers that are there to support you and to fight for what is yours.
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In this video, we explain the role of a long term disability lawyer and how we can support you when you have been denied your long term disability benefits.