In the matter of an Application pursuant to subsection 280(2) of the Insurance Act, RSO 1990, c I.8., in relation to statutory accident benefits.
Between:
[R. H.]
Appellant
and
Coseco Insurance
Respondent
DECISION
ADJUDICATOR: Maureen Helt
Appearances:
For the Appellant: [R. H.], Applicant Michael Switzer, Counsel
For the Respondent: Coseco Insurance David Raposo, Counsel
Heard: In-Person: Hearing: January 7, 2019
REASONS FOR DECISION and ORDER
OVERVIEW
1The applicant was involved in an automobile accident on July 10, 2015 in the state of New York and elected to receive New York benefits under section 59 of the Statutory Benefits Accidents Schedule, effective September 1, 2010, R.S.O. 1990 (Schedule).
2The applicant was denied certain benefits by the respondent and submitted an application to the Licence Appeal Tribunal (Tribunal) dated April 2, 2018. The following issues were identified as the issues in dispute in the application:
i. Is the applicant entitled to a medical and rehabilitation benefit in the amount of $3,340.20 for chiropractic services recommended by Apollo Physical Therapy Centres, in a treatment plan (OCF-18) submitted on March 22, 2018 and denied on April 5, 2018?
ii. Is the applicant entitled to a medical benefit in the amount of $3,342.14 for physiotherapy services recommended by Apollo Physical Therapy Centre, in a treatment plan (OCF-18) submitted on April 9, 2018 and denied on April 10, 2018?
iii. Is the applicant entitled to interest on any overdue payment of benefits?
3At the case conference the respondent raised a preliminary issue as to whether the applicant is precluded from re-electing Ontario statutory accident benefits under section 59 of the Schedule. The respondent states that setting a precedent allowing an insured person to re-elect benefits from one jurisdiction to another is a slippery slope. Insured persons may then be able to switch between interjurisdictional systems that are more advantageous to the insured person if and when they choose to do so.
4In its responding submissions to the preliminary issue, the applicant reframed the preliminary issue from what was set out in the case conference order. The reframed issue was set out by the applicant as follows:
The singular issue in the preliminary hearing is whether the applicant’s election to claim New York State no-fault benefits instead of Ontario no-fault benefits was valid and remains binding or whether the election is not valid and the insured may now elect for Ontario no-fault benefits.
5The respondent had an opportunity to respond to this newly framed issue in its reply submissions on the preliminary issue.
6At the outset of the hearing the respondent, in its opening submissions, took issue with the applicant's responding submissions reframing the preliminary issue as one of whether or not the election between New York State and Ontario no fault benefits is valid as opposed to the issue of re-electing Ontario benefits. The respondent submitted that it is prejudicial to now allow the applicant to reframe the issue after the respondent has participated in the case conference and filed submissions in this proceeding.
7The applicant stated that the wording of the preliminary issue was “unfortunate” and it was always its intention to seek a determination if the election made by the applicant, when she chose benefits under the New York no fault scheme, was valid. More specifically the applicant confirmed that she is not seeking to re-elect. Instead, she is seeking to elect for Ontario no-fault benefits on the basis that her past election for New York State no-fault benefits is not valid and binding.
8I informed the parties that I was prepared to adjourn the hearing if necessary as I was concerned of any potential prejudice to the respondent in proceeding with this newly framed preliminary issue.
9The proceeding was briefly adjourned to allow the parties time to discuss. When the parties returned they advised me that neither one of them wanted any further adjournments and as such we proceeded with a hearing on the issue as set out below.
ISSUE
10The issue before me as set out in the case conference order is whether or not the applicant precluded from re-electing Ontario statutory accident benefits under section 59 of the Schedule. The applicant argues that it is not precluded on the basis of an invalid election of New York state benefits. Therefore the issue of the validity of the election must be determined.
11The applicant raised the following grounds to support its position that the election is not valid:
(i) The requirements set out in s. 32(2) of the Schedule have not been met;
(ii) There was a misunderstanding as to the terms of the election that would necessitate a finding that the election is not valid; and
(iii) There was breach of the unfair or deceptive acts or practices regulation.
12The applicant withdrew its submission with respect to unfair or deceptive acts or practices at the hearing and as such it is not considered in this decision.
RESULT
13The applicant has not satisfied me, on a balance of probabilities, that the election of New York State no fault benefits is not valid. In weighing all of the evidence, I find that the insurer complied with the requirements set out in s. 32(2). While it may be true that the requirements could be more robust with respect to how and what information is conveyed to insured persons prior to election, I find the legislative framework as it exists has been complied with. I find that the applicant is precluded from re-electing Ontario statutory accident benefits under section 59 of the Schedule.
14I also find that the applicant has not satisfied me that there has been any misunderstanding as to the terms of the election such that it would warrant a finding that the election made is not valid.
LEGAL FRAMEWORK
15The parties agreed that the relevant sections of the Schedule are s. 59, which provides for an election of jurisdiction if the accident occurs outside Ontario and s. 32, which sets out the notice to the insurer and the application for benefits.
Section 59:
This section applies if,
59 (1) (a) as a result of an accident in another province or territory of Canada or a jurisdiction in the United States of America, a person insured in that jurisdiction within the meaning of subsection (4) dies or sustains an impairment or incurs an expense described in section 15, 16 or 19; and
(b) no benefits are received under the law of the jurisdiction in which the accident occurred. O. Reg. 34/10, s.59 (1).
(2) The person, or the person claiming benefits in respect of him or her, may elect to receive either of the following, but not both:
The benefits described in this Regulation, other than the benefits referred to in paragraph 2.
Benefits in the same amounts and subject to the same conditions as if the person was a resident of the jurisdiction in which the accident occurred and was entitled to payments under the law of that jurisdiction. O. Reg. 34/10, s. 59 (2).
(3) If an election is made under subsection (2), the insurer shall pay benefits in accordance with the election. O. Reg. 34/10, s. 59 (3).
Section 32: Notice to insurer and application for benefits
- (1) A person who intends to apply for one or more benefits described in this Regulation shall notify the insurer of his or her intention no later than the seventh day after the circumstances arose that give rise to the entitlement to the benefit, or as soon as practicable after that day.
(2) The insurer shall promptly provide the person with,
(a) the appropriate application forms;
(b) a written explanation of the benefits available;
(c) information to assist the person in applying for benefits; and
(d) Information on the election relating to income replacement, non-earner and caregiver benefits, if applicable.
ANALYSIS
16As noted above, the applicant confirmed at the outset of the hearing that it was not seeking to re-elect Ontario benefits but rather was taking the position that the election for New York benefits was/is not valid. The appellant argues that the requirements under s. 32(2) of the Schedule were not met.
(i) Have the requirements set out in s. 32(2) of the Schedule been met?
17As noted above, s. 32 of the Schedule sets out the legislative requirements that an insurer must comply with when an applicant has notified the insurer of his or her intention to apply for one or more benefits.
18Section 32(2) of the Schedule sets out the specific information that an insurer must promptly provide to its insured following notice of a motor vehicle accident.
19The applicant alleges at paragraph 18 of her submissions that the insurer failed to:
i. promptly provide the applicant with the appropriate application forms following the accident;
ii. failed to provide the applicant with a written explanation of benefits available; and
iii. failed to promptly provide information to assist the applicant in applying for New York State no fault benefits.
20Each of these criteria set out in s. 32(2) is considered below.
a. Did the insurer fail to promptly provide the applicant with the appropriate application forms?
21The applicant submits the following at paragraph 18 a. of its submission:
a. The insurer failed to promptly provide the applicant with the appropriate application forms following the accident being reported to the insured on July 13th, 2015, or at all prior to the insured allegedly making her election for New York State no-fault benefits.
22It is not disputed that after the applicant reported the accident on July 13, 2015, the respondent issued a letter on the same date and enclosed various application forms as well as a Description of Benefits document. These documents include not only the appropriate application forms but was accompanied by an Accident Benefits Application Package. The following forms were provided:
i. Employer’s Confirmation of Income (OCF-2)
ii. Disability Certificate (OCF-3)
iii. Permission to Disclose Health Information (OCF-5)
iv. Treatment Confirmation Form (OCF-23).
23There was also a document enclosed entitled “Description of Benefits – for accidents on or after September 1, 2010.” This document summarizes the types of benefits available in Ontario. It describes the income replacement benefit, non-earner benefit, caregiver benefit, medical benefit, rehabilitation benefit and attendant care benefit. It also sets out the maximum medical, rehabilitation and attendant care benefits is $50,000 with a ten-year limit. It sets out a minor injury is limited to $3500 and a catastrophic impairment is set out at one million.
24Also provided by the respondent was an Employer Benefits Information Form (CLG 645) which is required to be filled out if applying for an income replacement benefit and needs to be completed by the applicant’s employer along with the employer’s confirmation of income.
25The applicant does not dispute that she received the forms. Rather, the applicant’s submission is that the respondent failed to provide enough information about New York state benefits despite several requests to do so.
26I do not find that the insurer did anything to suggest it fell short of providing the necessary application forms as required under s. 32 (2) (a) of the Schedule.
b. Did the insurer fail to promptly provide the applicant with a Written Explanation of the Benefits Available?
27The applicant submits at paragraph 18 b of its submissions:
a. The insurer failed to promptly provide the applicant with a written explanation of the benefits available following the accident being reported to the insured on July 13th, 2015, or at all prior to the insured allegedly making her election for New York State no-fault benefits. The first time the insurer offered to provide the applicant with a written explanation of the benefits available was on August 25th, 2015, after the insured elected for New York State no-fault benefits. To date, the insurer has still not provided the insured with “a detailed outline of the New York level of benefits” as promised in said letter (see page 10 of the Submissions of the Insurer in Support of Preliminary Issue Hearing Brief).
28The applicant admits to receiving the respondent’s letter of July 13, 2015. In reviewing the letter, I find that it does enclose a Description of Benefits document which clearly sets out the minor injury limit of $3500 and the catastrophic limit of one million. It also states the maximum amount paid for medical and rehabilitation expenses (including assessments) is $50,000.00, within a 10-year time limit.
29By way of letter dated July 24, 2015, the respondent acknowledged receipt of the application for accident benefits. The application was not complete as Part 9 was not filled out. The letter also stated:
Our information indicates that you have an election between Ontario and New York State. As only one of these benefits can be paid, you must therefore choose which one you wish to be considered for. It is important to point out that the election you make is FINAL and cannot be changed later.
In making your decision, there are several differences that you may wish to consider, including the weekly amounts payable, the disability tests required to qualify and the length a time the benefits are available. I have included information regarding New York State's benefits.
I have also enclosed an election form for you to make your choice. The form should be completed and returned to my attention by August 24, 2015.
30Also enclosed with the letter was a two-page document on July 24, 2015 which sets out that in the state of New York an applicant is entitled to up to $50,000 per person in benefits for the following:
(i) All necessary doctor and hospital bills and other health services expenses, payable in accordance with fee schedules established or adopted by the New York State Department of Financial Services;
(ii) 80% of lost earnings up to a maximum monthly payment of $2,000 monthly for up to three years following the date of the accident;
(iii) Up to $25 per day for a period of one year from the date of the accident or other reasonable and necessary expenses the insured person may have incurred because of an injury resulting from the accident, such as the cost of hiring a housekeeper or necessary transportation expenses to and from a health service provider; and
(iv) A $2000 death benefit, payable to the estate of a covered person, in addition to the $50,000 coverage for economic loss described above.
31Based on the above I find that the respondent did promptly provide the applicant with a written explanation of the benefits payable in accordance with the requirement under s. 32(2) (b) of the Schedule. A description of the New York benefits was provided as was that for Ontario.
b. Did the insurer fail to promptly and adequately provide information to assist the applicant in applying for benefits?
32The applicant submits that while the respondent may have provided some of the forms and written explanation of the benefits available under the two jurisdictions, it did not ensure that the applicant had the necessary information to assist her in being able to choose between New York state benefits or Ontario benefits.
33The applicant submits at para 16 c of its submissions:
The insurer failed to promptly provide information to assist the applicant in applying for New York State no-fault benefits following the accident being reported to the insured on July 13th, 2015, or at all prior to the insured allegedly making her election for New York State no-fault benefits.
34The question at the heart of this dispute as raised by the applicant during the hearing can be distilled to what is the necessary amount of information that an insurer is responsible for providing to an insured to assist that person in applying for benefits and making an election between benefits available in two different jurisdictions.
35The parties were not able to provide me with any guidance from previous cases as to what is required of the insurer to satisfy the criteria that it has provided information to assist an insured person in applying for benefits. In my view, the amount of information to be provided must be sufficient to allow an insured person to make an informed decision.
36If we break down the language in the Schedule, the requirements are “to assist” a person “in applying for benefits”. I believe the assistance required is not only procedural but also substantive. This is clear from the requirement to provide the appropriate forms and then to provide a written explanation of the benefits available. It is clear that the intention is that an insured person must be given sufficient information to make an informed decision.
37Based on the facts as presented, there is no doubt that the applicant was confused or unsure about what jurisdiction to choose however, being confused as to what jurisdiction to choose is different than not having sufficient information to make an informed decision.
38This question is not an easy one to answer. I appreciate the applicant’s position is that she was led to believe that if she chose Ontario she would only be entitled to $3500 and in New York her entitlement would be $50,000 but it is also not disputed that the applicant was given a written explanation of both New York benefits and Ontario benefits.
39When the applicant asked for clarification about the New York benefits she was told that the respondent did not have specialized knowledge of New York state benefits, that she could consult a lawyer or seek information from the New York State Department of Insurance. While it was acknowledged during the hearing that there is no such entity as the New York State Department of Insurance, the applicant could have sought further clarity on this point if it was an issue. As set out in paragraph [30] above, the applicant was provided with information that a person would be entitled to up to $50,000 in benefits in New York and given a detailed breakdown of the available benefits.
40Section 32(2) (c) requires an insurer to give the applicant information to assist her in applying for benefits. While I believe it requires an insurer to adequately explain the legislative scheme in another jurisdiction and how that legislative scheme compares to what is available in Ontario, I do not think the obligation extends beyond that. In this case, the evidence suggests that the insured was looking for advice as to which jurisdiction to elect. While there is no doubt that the Schedule is consumer protection legislation, I do not think that means that s. 32 should be read in such a liberal manner to require an insurer to “advise” an applicant as opposed to assist the applicant in applying for benefits. It is a fine line and it is one that is to be interpreted on a case by case basis.
41In this case, I find it helpful to set out some of the relevant facts as set out in the log notes.
42The applicant reported her accident to the insurer on July 13, 2015. On that same date the respondent sent her a letter enclosing some of the standard claim forms and a document describing Ontario benefits. She was advised by a representative of the respondent that “she may be entitled to receive benefits according to the no-fault laws of New York State or Ontario, as the accident occurred in New York state which gives rise to a choice of jurisdiction.
43On July 20, 2015 a representative of the respondent attended at the applicant’s home and the log note from that visit states “explained MIG - $3500 limit” and a few lines later “Explained election of NY vs. ON – described ON benefits in detail.” This documentation, in the respondent’s submission is straightforward, easy to understand and was given to the applicant.
44In her submissions the applicant states that the adjuster who attended at her home on July 20, 2015 was unable to answer questions about New York state benefits. The respondent submits that expecting any adjuster in Ontario to be familiar with the jurisdiction of all no-fault benefits in North America is unrealistic. The respondent did provide the applicant with a letter dated July 24, 2015 which outlines the types of coverages available under the New York no fault regime.
45On July 24, 2015 the respondent wrote to the applicant advising her to make an election of jurisdiction within 30 days. Enclosed with the letter was a two page document entitled “New York Motor Vehicle Insurance Law Cover Letter.”
46On July 28, 2015 the log notes reflect that the adjuster spoke at length with the applicant and that the election was explained again in depth.
47On August 5, 2015 the respondent’s adjuster notes reflect:
“She went on to ask about the NY v. SABS election and which was better. I explained that I was not able to give her advise [c] with respect to that choice as every situation is different and it’s an individual choice. I explained that what she was asking me was for legal advice, which I am unable to provide, further explaining that while I am very familiar with the SABS level of coverage, that is not the case for NY. She referred to the summary sheet that Emily provided. I suggested that she consider calling the NY Dept. Of Ins. Or she could speak with counsel if she wished, but that legal costs were not covered by the policy.”
48The respondent submits that its representatives are not able to give legal advice and the fact that they are not well versed in the no fault regime of benefits available in New York is understandable. I agree. It is not reasonable to expect that an adjuster in Ontario would necessarily know the legislative scheme in all the states in the United States.
49On August 11, 2015 the adjuster’s notes reflect that the applicant called and advised that she had not yet sought any form of treatment. She reports being very nervous while driving and is going to her family doctor on August 14, 2014. The notes further reflect that “Emily had provided a summary of the NY coverage and SABS and that her decision was a personal one and we were not qualified or allowed to provide advice as she was asking us for legal counsel. She was told that if her injuries fall within the minor guideline it is a $3500 limit for all medical and rehabilitation treatment as well as any psychological treatment.
50On August 18, 2015 the applicant calls the respondent again asking which jurisdiction she should elect. The adjuster confirms it is her decision to make and that the adjuster can’t tell her what policy is best for her. She was directed to complete her own research. The Notes reflect that in response to the applicant’s questions the applicant was told that “The New York No-Fault Law provides for the payment of benefits of victims of motor vehicle accident to reimburse them for their basic economic loss. Briefly summarized, basic economic loss consists of up to $50,000 per person in benefits for the following: all necessary doctor and hospital bills and other health service expenses, payable in accordance with fee schedules established or adopted by the New York State Department of Financial Services.”
51On August 24, 2015 the applicant elected NY benefits. She was then provided with the appropriate forms to fill out. Shortly after her election a New York adjuster assumed carriage of her matter.
52While it is clear from all these notes and the applicant’s own evidence that she was having difficulty deciding which jurisdiction to choose, I find that she was promptly made aware that there was an election between Ontario and New York and wanted someone to help her to determine which was best for her, given her circumstances. This is clear by the frequency of communication with the respondent as set out above and respondent’s prompt responses to the applicant’s inquiries.
53I do not think it is the responsibility of the insurer to provide the level of direction and advice the applicant was seeking. My interpretation of “providing information to assist the applicant” does not amount to providing advice on which jurisdiction to choose for benefits.
54The respondent acknowledges that it retained an independent adjuster in the state of New York to provide guidance on the New York state level of coverage after the applicant made her election.
55The applicant suggested in her submissions that the respondent ought to have retained this independent adjuster prior to the applicant making her election to be able to provide more detailed information about the level of coverage in New York state to assist the applicant in making her choice of election. The respondent explained its practice is to retain such assistance only after the election is made as it is not clear that an independent adjuster will be needed prior to the date of election in the event the applicant elects Ontario. I understand the submission of the applicant, and while I agree that had the insurer retained such an independent adjuster prior to the applicant making her election, it may have been helpful to the applicant, this does not mean that the insurer was required to do so.
56During the hearing, counsel for the applicant stated that his client is not sophisticated and that she suffered a traumatic brain injury as a result of this accident and as such the insurer should have taken additional steps to ensure she understood her election. On this point I find the evidence before me, including the applicant’s extensive correspondence with the respondent adjusters, as well as the regular detailed claims the applicant submitted for her housekeeping, parking, mileage and medical and rehabilitation benefits suggests otherwise.
57It was not until January 2018 that the applicant applies to the Tribunal seeking benefits in Ontario. It was not until the responding submissions were filed that the applicant raised the issue that her election for New York benefits was not valid.
58My interpretation of what amounts to a valid election is that there needs to adequate information provided to make an informed choice. Based on the above, as well as considering the applicant’s own evidence, I find that the information provided was both adequate and timely. Further, while consumer protection legislation does require a high level of information to allow an applicant the ability to make an informed choice, it does not include crossing the line into giving legal advice about which jurisdiction to choose.
(ii) Was there a misunderstanding as to the terms of the election that would necessitate a finding that the election is not valid?
59Another argument raised by the applicant is that her election for New York benefits was made on a complete misunderstanding as to the benefits she would be entitled to if she elected for said benefits or if she elected for Ontario no-fault benefits and as such there was no consensus ad idem (meeting of the minds) and the election was not valid. In support of this argument the applicant’s evidence is as follows:
a) The applicant was desperate at the time she completed the election form for treatment and other benefits as she had now suffered from her injuries for over a month without receiving any treatment and her symptoms were getting worse and she was not able to properly care for herself;
b) She was not going to be able to get details of New York State no-fault benefits from her insurer;
c) She had to make a decision immediately in order to complete and sign the election form to return it to the insurer before August 24th, 2015;
d) She relied on the finding of her insurer that she was considered to only have sustained a minor injury and would therefore only be entitled to $3,500.00 in medical and rehabilitation expenses;
e) She believed that $3,500.00 would not be enough to provide her with the necessary treatment and services that she required due to her injuries;
f) She believed she would not receive any income replacement benefit should she elect for Ontario no-fault benefits;
g) She believed she would receive $2,000.00 per month in an income replacement benefit should she elect for New York State benefits per the information sheet that the insurer had sent her;
h) She believed she would receive $50,000.00 to pay for treatment expenses should she elect for New York State benefits per the information sheet that the insurer had sent her;
i) She believed that electing for New York state no-fault benefits would plainly provide her with many times the benefits that she would receive as opposed to electing for Ontario no-fault benefits; and
j) The insurer representatives’ constant highlighting of the monetary limit difference ($50,000.00 versus $3,500.00) between New York State no-fault benefits and Ontario no-fault benefits was clearly encouragement for her to elect for New York State no-fault benefits instead of Ontario no-fault benefits.
60Many of the above arguments were considered in the above analysis of s. 32 of the Schedule. In addition, while I recognize that the applicant has stated the above to be true, there is other evidence before me that I must consider.
61First, the applicant was given a written explanation of the benefits available under both jurisdictions. Second, the applicant, after making her election, diligently submitted claims under the New York scheme. In August 2016 the applicant retained a U.S. attorney and yet, the applicant did not allege that there was a misunderstanding as to the terms of her election of jurisdiction for benefits at that time. It is only in January 2018 that the applicant files an application in the province of Ontario for benefits that were denied. While the applicant states she believed she would receive $2,000.00 per month in an income replacement benefit should she elect for New York State benefits per the information sheet that the insurer had sent her; there is no evidence as to why she would believe this. The written document speaks for itself.
62At paragraph 34 of her submissions, the applicant relies on the doctrine of common mistake to support her position that the election was not valid. As noted by the respondent in its submission, this is not a case of contract law where a contract is deemed to be invalid if there is no “meeting of the minds”. Rather, there is a well established statutory and regulatory framework which governs insured’s and insurer’s rights and responsibilities with respect to motor vehicle insurance.
63I agree with the respondent that as a matter of law the doctrine of common mistake does not apply to the issue of whether or not the election was valid.
CONCLUSION
64As noted at the outset of this decision, the applicant submitted that it is not seeking to re-elect, but rather she is seeking to elect for Ontario no-fault benefits on the basis that her past election for New York State no-fault benefits is not valid and binding. The applicant raised two grounds – non-compliance with s. 32 of the Schedule and the applicant’s misunderstanding of the information presented to her.
65Considering the totality of the evidence I find the insurer complied with its obligations as set out in s. 32 of the Schedule. I also find that the evidence does not support a claim that the applicant was misinformed. As noted above, while an applicant may have benefitted from having additional information to assist her in her choice of jurisdiction, the insurer’s obligation is clearly defined as having to provide information and not assisting in choosing jurisdiction.
ORDER
66For the reasons set out above, I find that the election of New York state benefits is valid. Section 59 of the Schedule makes it clear that the person claiming benefits in respect of him or her, may elect to receive either of the jurisdictions, but not both. For this reason, I dismiss the application on the basis that the election made by the applicant to receive benefits under the New York state no-fault benefit regime is a valid election and her application filed with the Tribunal is precluded under s. 59 of the Schedule.
Released: August 30, 2019
Maureen Helt
Vice Chair