The Supreme Court of Canada maintained a lower court’s ruling that auto insurers cannot retroactively void insurance policies without just cause and at least giving consumers 15 days’ notice.
In 2002, then 22-year-old Karla Merino was hit and injured by a drunk driver. However, the Merino family was denied a financial settlement because the insurer of the driver, Intact Insurance (then operating as ING Insurance), insisted that the driver was not insured during the accident.
Intact argued that because the driver’s spouse – who had not signed the policy – failed to accurately disclose her driving history on the insured’s application, the agreement between the driver and Intact was never made. Thus, the insurer chose to rescind the driver’s policy without offering 15 days’ notice as per law.
A Windsor judge in 2017 ruled in favour of the insurer; a decision that was later appealed by the Merinos.
Then in April 2019, the Court of Appeals for Ontario overturned the initial decision, determining that auto insurance companies in the province cannot retroactively rescind a contract. The Court also ruled that the insurer’s failure to provide the driver with at least 15 days’ notice of the policy’s cancellation meant that the contract was not legally terminated.
Intact then filed an appeal with the Supreme Court.
CBC News reported that the Supreme Court upheld the Appeals Court’s decision on Thursday, dismissing Intact’s appeal.
“I think this insurer and all insurers are going to read this decision today, as they read the appeal decision in April, and I hope reasonable underwriters and reasonable auto insurers and their executives will take to heart what the law now says, and this won’t happen again,” said Donald Leschied, who represents Karla Merino as her attorney.
