The Court recently considered the Insurer's requirements in cancelling an insurance policy. In Singh v Sangha [2014 ONSC 5147], the Insurer brought a summary judgment motion on the basis that it terminated the Plaintiff's motor vehicle insurance policy prior to the accident. As a result of the accident, the Plaintiff had commenced a tort claim and a claim for statutory accident benefits.
In July 2004, pursuant to a policy renewal notice, Aviva issued a standard OAP (Ontario Automobile Policy) motor vehicle liability policy with Harvinder Singh ("the Plaintiff") as the named insured. The Plaintiff was to pay a premium pursuant to a monthly payment schedule. The payments were to be automatically withdrawn. The monthly automatic withdrawal for July 30, 2008 was not completed because of insufficient funds.
Aviva wrote to the Plaintiff on August 8, 2008 and explained that it received notice from the Plaintiff's bank that there were insufficient funds. Aviva explained it would withdraw both July and August payments at the same time. The letter further stated that if there were not sufficient funds in the bank account to cover the full amount owing, Aviva would cancel the policy for non-payment of premiums.
When Aviva attempted to withdraw the payment on August 30, 2008, the withdrawal was not completed due to non-sufficient funds.
On September 10, 2008, Aviva sent a letter to the Plaintiff by registered mail with the notice of cancellation. The registered letter was sent to his residential address. The letter advised that Mr. Singh had until October 12, 2008 to pay the outstanding premium or else the policy would be cancelled. No payment was received.
On December 13, 2008, the Plaintiff was struck by a van while crossing a parking lot.
The Court dealt with Section 12 of the Statutory Conditions that dealt with effective delivery and states:
Written notice may be given to the insured named in this contract by letter personally delivered to the insured or by registered mail addressed to the insured at the insured's latest post office address as notified to the insurer.
The Court noted that the notice of cancellation was sent to the Plaintiff by Aviva by registered mail at his home address. Delivery was attempted on September 12, 2008, but the Plaintiff was not there. Canada Post held the registered notice for pickup until October 3, 2008 when it was declared unclaimed. On October 6, 2008, the letter was returned to Aviva.
There was no dispute that the Plaintiff had not received the notice. It was also not in dispute that the Plaintiff lived at the address where the letter was sent. The Plaintiff did not receive the notice because he failed to pick it up from the Brampton West Office of Canada Post, although he could have. The Court concluded there was no duty on the Insurer to follow-up on return mail or to go looking for an insured after it complied with Section 12.
The Court held that Aviva complied with the statutory requirements for the delivery of registered mail. The Court concluded that the registered mail was effectively delivered to the Plaintiff in a manner legally capable of effecting cancellation of the policy. Summary judgment was granted dismissing the Claim and Crossclaim against Aviva as it pertained to Statutory Condition 12. The Court adjourned submissions with respect to effective termination pursuant to Statutory Condition 11 in order to have an opportunity to produce banking records to be reviewed.
The decision is important as it confirms that insurers are not required to ensure that an insured receives a Notice of Confirmation. However, insurers need to comply with the notice requirements including sending the letter by registered mail to the proper address. In the event that there is a future claim advanced on the policy, insurers are able to take steps to summarily dismiss the claim.
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