Innocent victim of insurance fraud? Why a tribunal found otherwise….

An injured motorcyclist claiming he was the innocent victim of fraud had the wherewithal to know he was not carrying valid insurance, thus disqualifying him from receiving accident benefits, the Ontario Licence Appeal Tribunal (LAT) ruled Thursday.

The tribunal said the motorcyclist, Cole Prasow, owned two vehicles at the time of his accident in April 2021 — a 2010 Kawasaki motorcycle and a Subaru Forrester, and was in the process of purchasing a 2021 Kawasaki motorcycle.

He was injured while driving the 2010 Kawasaki, which the tribunal found was not properly insured. It said Prasow ought to have known the proper procedure for obtaining insurance because he had a valid policy on his 2015 Subaru Forester, which he obtained through a brokerage. The premiums for his valid auto policy were taken out of his bank account automatically.

“In the circumstances, an ordinary individual with the applicant’s age, education, and background would have or should have known that payments in cash to an unidentified individual in a parking lot with no follow up documentation was not the proper method of securing an insurance policy,” the tribunal ruled.

Prasow sought auto accident benefits after he was injured in a collision while driving his motorcycle. He originally went to Unifund Assurance Company, the insurer listed on his insurance card, but the insurer found no policy linked to the information on his card. He then went to his own insurer, RSA Insurance Company, which denied him benefits because he was not driving the motorcycle with a valid insurance policy.

Prasow claimed he was the victim of fraud, and asked the tribunal to overturn RSA’s decision. But the LAT sided with RSA, observing the Statutory Accident Benefits Schedule states accident benefits may be denied if, “at the time of the accident, the applicant knew or ought reasonably to have known that he was operating the automobile while it was not insured under a motor vehicle liability policy.”

The tribunal decision details how Prasow obtained his insurance for his motorcycle. LAT said these circumstances made it obvious that Prasow should have known his motorcycle was not properly insured.

“In June 2020, the applicant [Prasow] attended an informal car meet-up,” the LAT decision reads. “This was not a formal auto show that would be attended by members of the insurance industry. It was in a mall parking lot outside of a Tim Hortons.

“The applicant met an individual not previously known to him, named Kyle, who could purportedly get him insurance for his motorcycle. This individual did not state that he worked for [RSA Insurance Company] or any other insurer, but advised the applicant he can ‘get him insurance.’

“Despite already having a policy for the Subaru, [Prasow] did not obtain a quote from his brokerage, but through Kyle, the unidentified individual in the parking lot. The transaction took place in the parking lot. The applicant reportedly provided Kyle with $2,000 in cash. The applicant did not obtain Kyle’s last name. Kyle did not operate out of an office or have a brokerage website.

“The insurance card purportedly from Unifund Assurance Company was delivered to the applicant by email on June 26, 2020. Sent from a Gmail address, the email did not have any text in the body or a signature.

“The applicant did not receive any correspondence from Kyle with respect to a quote, invoice, premium, receipt of cash payment, coverage details, a replacement card, or any other details regarding the insurance policy for the motorcycle. The supposed insurer did not request a copy of the vehicle registration or ask that the applicant call if he had any questions.”

Prasow argued he had reason to believe the insurance provided was legit because he was able to use it to register his motorcycle both with the dealership and the Ontario Ministry of Transportation.

But the LAT said he was not entitled to rely on the dealership or the ministry’s acceptance of the proof of insurance.

“There is no evidence that the ministry or the dealership had any obligation or process to verify that it was a valid policy,” the LAT decision states. “Purchasing another insurance card does not indicate good faith belief in the validity of the policy; it indicates a belief that it would be sufficient to register his vehicle.

“An ordinary individual, with the applicant’s age, education and background, knew or ought to have known that registration of a vehicle and holding a valid insurance policy is not the same.”

 

Feature image courtesy of iStock.com/Miguel Perfectti