The Ontario Superior Court of Justice has dismissed a broker’s claim against an insurer that voided an auto insurance policy due to the wrong year and model of the vehicle being registered.
Routh Chovaz Insurance Brokers Inc. filed the suit against
Aviva Insurance Canada over an insurance policy for a vehicle owned by a certain Waqar Zaidi. Zaidi was a client of Routh Chovaz and asked them to transfer a policy from his 2008 Mercedes Benz CL-320 to the 2010 Mercedes Benz CL-350 he had recently purchased. The broker then issued Zaidi a new motor vehicle liability slip.
When the policy was up for renewal in March 2014, Routh Chovaz did not update the policy to reflect the new vehicle’s year and model. In October of that year, Zaidi was involved in an accident where he rear-ended another vehicle, damaging the 2010 CL-350 and exposing him to a personal injury claim from the occupants of the other vehicle.
Aviva said that it did not cover the damages and voided the policy, returning the premiums to Zaidi. The Errors and Omissions Insurer of Routh Chovaz ended up paying Zaidi’s property damage claim and filed a claim against Aviva, asking it to honor the policy.
However, the court ruled in favor of Aviva, saying: “Insurance brokers are a regulated industry with codes of conduct and obligations. If the law imposed a duty on the insurer to determine the customer-insured’s requirements, duplication of effort would result, presumably at the expense of the consumer-insured.” As such, the court holds the broker, and not the insurer, responsible for ensuring that the policy information is correct and accurate.
In fact, Aviva said that it would have insured the new vehicle had they been supplied with the correct year and model, all for an added premium of C$71.
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