Brokers cannot rely solely on mandatory mailings related to Ontario auto reforms: lawyer

Brokers relying solely on the mandatory mailings explaining the new optional benefits scheme in Ontario’s auto insurance regime may find themselves liable, cautioned Stephen R. Moore of Blaney McMurtry LLP.
Moore spoke during the Canadian Defence Lawyers Accident Benefits Conference in Toronto on Apr. 8. His seminar was entitled, ‘Broker Liability: Another Pocket to Pick.’
Moore pointed to the Supreme Court of Canada decision, Fletcher v. Manitoba Public Insurance Co. In that decision, the panel of judges wrote:
“… private insurance agents owe a duty to their customers to provide not only the information about available coverage, but also advice about which forms of coverage they require in order to meet their needs.”
In other words, brokers need to go beyond informing their clients of the available coverages. They also need to determine which coverage each client needs.
“There are all sorts of [Financial Services Commission of Ontario and Insurance Bureau of Canada] mailings that have gone out to consumers explaining the available benefits,” Moore said. “But they don’t do a thing to help [the broker] understand what the clients’ needs actually are. That problem must be addressed by talking to them.”
Moore said the mailings are dense and too detailed for the average consumer to absorb the information within them effectively.
“There are two details to understand: the mailings don’t have any real meaning for individuals, and more importantly, the mailings don’t describe the pitfalls for the client if they don’t buy any of the optional coverages,” he said. “Yes, if a consumer sues the broker, the broker will be able to prove that the consumer didn’t read the mailings.
“But a smart plaintiff’s lawyer will have a survey done to prove that nobody read it, and that the brokers know that nobody read it, because every time they talk to a client they find out that nobody read it.”
Moore’s advice to brokers included:
• mail out the information drafted by FSCO and IBC;
• get new clients to elect in writing what benefits they want;
• give concrete examples of why the optional coverage might be important; and
• talk to every insured once a year or at least try to leave a message that you want to talk to them about their adequacy of their insurance. “If the client doesn’t call back, and that call was logged, it will go a long way to helping you out.”