When Mr. G. purchased a trailer, he enrolled in the group creditor insurance plan offered by the dealership. His paperwork confirmed he had requested both life and disability insurance in connection with the financing on his trailer.
He subsequently became disabled and contacted the dealership about submitting a disability claim to cover his loan payments while he was unable to work. It was then that he learned the loan on his trailer carried life insurance only, despite the paperwork he had in his possession.
Mr. G. confronted the dealership representative about the problem with his coverage. The representative admitted responsibility and confirmed he had made a mistake. At one point, the dealer even offered to pay the disability premium on Mr. G.’s behalf but subsequently reneged on the offer.
By the time he called OLHI, Mr. G. had made numerous attempts to resolve the problem on his own, to no avail. He was very frustrated, particularly because it was not clear with whom he should be dealing. Should he pursue his complaint with the dealership, the insurer’s third party administrator, or the insurance company itself? On the surface, it appeared that he had been disadvantaged as a result of the actions of the dealership, not the insurer nor its administrator. However, additional fact finding would be required to determine the best course of action to resolve the situation.
As a first step, an OLHI Dispute Resolution Officer (DRO) called the third party administrator, whose role it is to administer the insurance plan on behalf of the insurer. It was confirmed that only a life insurance certificate had been issued for Mr. G. and that he had no disability coverage in place. At this point, our DRO became concerned that even if Mr. G. or the dealership would agree to pay the premium for the disability insurance, the insurer would not agree to entertain Mr. G.’s disability claim. Accordingly, our DRO wrote to the insurer’s Ombuds Officer, apprising him of the situation and enquiring whether the insurer would consider Mr. G.’s disability claim if it received payment of the premium.
The insurer’s representative advised OLHI that it was conducting an investigation into the matter. They had already spoken with the dealership and were in the process of contacting Mr. G. to obtain his side of the story. Our DRO subsequently followed up and inquired, once again, if the insurer would accept responsibility for the claim if its’ investigation showed that the dealership was at fault and the premium was subsequently paid. She was advised that the insurer’s Ombuds would confer with senior management.
Eventually, a settlement was reached whereby the dealership agreed to pay half of the disability premium, Mr. G. agreed to pay the other half and the insurer agreed it would consider the disability claim upon receipt of the full premium.
Mr. G. expressed his gratitude for OLHI’s assistance in concluding a settlement that ensured his disability claim would be considered, thus satisfying his original expectation that he was insured in the event of disability.
Disclaimer: Names, places and facts have been modified in order to protect the privacy of the parties involved. This case study is for illustration purposes only. Each complaint OLHI reviews contains different facts and contract wording may vary. As a result, the application of the principles expressed here may lead to different results in different cases.