Notification period doesn’t depend on insured’s co-operation

In an insurer’s investigation of an accident benefit claim, the non-cooperation of an insured accident victim doesn’t necessarily determine whether or not an insurer had sufficient time to serve notice on other insurers to dispute benefit payment obligations.

The Ontario Superior Court issued the ruling recently in Liberty Mutual Insurance Company v. Zurich Insurance Company.

In Liberty, a 13-year-old boy living in the Toronto area, Steven Lin, was injured when a car struck the bicycle he was riding at the time.

Under Ontario’s insurance regulations, the first insurer to receive a completed application for benefits is obliged to pay the benefits pending the resolution of any debate about whether other insurers should also be paying benefits.

Regulations give an insurer 90 days to supply written notice to any other insurer that may have obligations to pay benefits.

Lin’s application for benefits listed Lin’s Markham residence and incorrectly stated there was no other insurance policy of any person on whom Lim was dependent. Eventually, the company discovered Lin in fact lived as a dependent on his natural father, who lived in Scarborough.

Lin’s natural father owned a car insured by Zurich. Fifty-five days after the 90-day deadline, Liberty filed a late notice saying Zurich had a uty to insure. Liberty cited a provision in the regulations that allows such a late notification if “90 days was not a sufficient period to make a determination that another insurer or insurers is liable” under the Insurance Act.

An arbitrator rejected Liberty’s bid for a late notice to Zurich, and the Superior Court upheld the arbitrator’s decision.

The arbitrator ruled that even though Lin’s natural mother — with whom he did not live at the time of the accident — intentionally misled the insurer’s investigators, Liberty came into possession of a police report that, if followed up, would have uncovered the correct information within the 90-day period required to notify Zurich of its obligations. •