Under the Statutory Accident Benefits Scheduled (“SABS”) to the Insurance Act, the standard minimum amount of income replacement benefits is $400.00. As we know, however, additional optional coverage is available under the SABS, such that qualifying individuals’ income can be replaced up to a maximum of $1000 per week if they opt-in to same.
In Godina v. Tripemco (2013 ONSC 979) the plaintiff was involved in a motor vehicle accident which rendered him permanently disabled. His SABS coverage included only the standard minimum income replacement benefit. If the plaintiff had additional optional coverage at the time of the accident, his level of income would have entitled him to a higher amount of income replacement benefits.
As a result, plaintiff sued the defendant insurance broker for its failure to properly advise him about the purchase of optional income replacement benefits. The plaintiff argued that he did not need to prove that he would have purchased optional benefit coverage in order to succeed in the claim for damages; but rather that it is enough to show that had the plaintiff been properly advised he could have purchased the coverage. In essence, the plaintiff argued the “loss of chance” doctrine.
Following the recent trend in the Canadian courts, the Court in Godina v. Tripemco once again confirmed the applicability of the “but for” test for causation in negligence cases. The Court held that the plaintiff must not only show that the brokerage failed to meet the standard of care but, he must also prove on a balance of probabilities that he would have purchased the additional coverage but for the alleged failure of the broker to offer it. In Godina, the plaintiff failed to show that the broker had fallen below the standard of care and, further, couldn’t establish that he would have purchased the option coverage had it been offered to him. As a result, the plaintiff’s claim failed.
What’s the upshot? Where an insurance broker has fallen below the standard of care in advising his or her clients with respect to optional benefits, a plaintiff’s claim may nevertheless be scuppered, if they cannot show that they would have purchased coverage.