Zefferino v. Meloche Monnex: Failing to Offer Insurance: 2013

Duty to Offer Insurance Coverage: Causation Issue 

The recent decision of the Court of Appeal in Zefferino v. Meloche Monnex1 provides a helpful look at  the issue of causation where an insurer or agent fails to offer insurance. 

Mr. Zefferino obtained auto insurance from Meloche Monnex. Apparently, the insurer failed to offer  him optional income replacement benefits. He sued and moved for summary judgment on the basis  that: (1) the insurer owed him a duty to offer the extra insurance; (2) it had not done so, and (iii) there  was a gap in coverage. Mr. Zefferino argued that these facts were sufficient for judgment to be  granted, submitting that on a claim arising out of insurance broker negligence, there was an exception  from the normal rule that a plaintiff must prove causation, and this could be justified on the basis that  insurance contracts are different than normal contacts. To do otherwise, he argued, would place an  impossible burden on the insured.  

The court held that it is a question of fact as to whether an insured would have purchased the  additional insurance, if it had been offered. While each case will turn on its own facts, it is incumbent  upon a plaintiff to lead sufficient evidence so that the trial or motions judge can make that finding of  fact. A bald assertion by an insured that he would have purchased the extra insurance, if it had been  offered, is not enough. Further, in this case, the insured had never before purchased the additional  insurance and there was no evidence other than his bald assertions to explain why he would have done  so this time.  

This case has obvious (positive) implications for banks and credit unions which are faced with claims  by surviving spouses where mortgage (life) insurance was not put into place. The claimant cannot rely  solely on the gap in coverage, but instead must lead some evidence of causation.