Insurance application misrepresentation in Ontario can arise when an insurer says an answer or omission was material to the policy. Read each question carefully, answer accurately and keep a copy of the completed application. This guide explains the duty to disclose and what to review if coverage is challenged.
Key takeaways: Review the application before signing, disclose material information accurately, retain supporting records and compare any denial with the policy wording.
The duty to disclose under the Insurance Act
Ontario’s Insurance Act contains specific rules for life insurance applications. Section 183(1) addresses disclosure of facts material to the insurance in the application, medical examination and written statements or answers provided as evidence of insurability. The exact application of the provision depends on the policy and facts.
A failure to disclose or a misrepresentation of a material fact may give the insurer remedies under the Insurance Act, subject to the Act, the policy and the facts. Section 184 addresses incontestability issues for life insurance; other insurance products may be governed differently.
Similar disclosure principles apply to other types of insurance, including disability and accident and sickness coverage, although the specific statutory provisions may differ. Group insurance obtained through an employer may raise different issues from individually purchased policies.
What is a “material” fact?
In general terms, a fact is material if it would have influenced a reasonable insurer in deciding whether to issue the policy, or on what terms. Medical history, prior diagnoses, medications, tests, specialist referrals, smoking, and dangerous activities are common examples. Whether a particular fact is material is assessed on the circumstances.
Where problems arise
Medical history questions often ask about consultations, symptoms, tests or treatment over a set number of years. Problems can arise where:
• a person forgot a visit or a minor diagnosis;
• the question was ambiguous or the answer was recorded by an agent or nurse;
• the person did not know a test result or diagnosis;
• the person deliberately left out a condition to obtain coverage or lower premiums.
There is an important difference between an honest mistake and deliberate concealment. The law generally focuses on facts within the applicant’s knowledge, and courts may consider the wording of the question and how the application was completed. Deliberate concealment, by contrast, can lead to serious consequences, including the policy being voided even after the incontestability period in cases of fraud.
Credibility matters
If a disclosure dispute goes to court, the applicant’s credibility can be central. The judge will consider what the applicant knew, what they were asked, and how they answered. Inconsistencies between the application, medical records and later testimony can affect the outcome.
Practical tips when applying for insurance
• Read every question carefully and answer fully and accurately.
• If you are unsure whether something should be disclosed, disclose it or ask.
• Review answers recorded by an agent or paramedical examiner before signing.
• Keep a copy of the completed application and all correspondence.
• Update the insurer before the policy is issued if your health changes.
If a claim is denied for misrepresentation
• Ask for the insurer’s reasons in writing and a copy of your application and policy.
• Compare the questions asked with your medical records.
• Note any deadlines for appeals or legal action.
• Get legal advice before responding in detail; limitation periods may apply.
Group coverage and evidence of insurability
Many people obtain life or disability coverage through work. Basic group coverage may not require detailed health questions, but optional or additional coverage often requires an “evidence of insurability” form with medical questions. The duty to answer accurately applies to these forms too. If a claim is later made under the optional coverage, the insurer may review the form against medical records.
Mortgage and creditor insurance
Insurance offered when taking out a mortgage or loan may involve short health questionnaires completed quickly at a bank or online. Some of these products assess eligibility only when a claim is made, a practice sometimes described as post-claim underwriting. Applicants should read the questions carefully and keep a copy of their answers. If a claim is denied, the wording of the questions and how the application was completed can be important.
Reinstatement and changes to coverage
Disclosure duties may arise again when a lapsed policy is reinstated or coverage is increased. Answers given at those times may be reviewed separately, and the timing rules may run from the later date.
Conclusion
Insurance application misrepresentation in Ontario is closely tied to the application, policy and claim evidence. Contact Booni Law at admin@boonilaw.com or +1 (226) 271-1751 to discuss the documents. No outcome is promised.
Frequently Asked Questions
Can my life insurance be cancelled because I forgot a doctor’s visit?
It depends on whether the fact was material and within your knowledge, the wording of the question, and timing, including the incontestability rules. Each case is fact-specific.
What is the two-year incontestability rule?
The Insurance Act contains incontestability provisions for life insurance. How they apply depends on the policy, the type of insurance and the facts, including any allegation of fraud.
Does the duty to disclose apply to disability insurance?
Yes, similar principles apply, although the specific provisions may differ by type of insurance.
What should I do if my claim is denied for non-disclosure?
Request your application, policy and reasons in writing, and get advice before responding.
Claim denied for non-disclosure?
If an insurer has denied your claim or rescinded your policy because of an answer on your application, Booni Law can review the application, the policy and the reasons given. Email Booni Law at admin@boonilaw.com or call +1 (226) 271-1751. Results depend on the facts and the policy, and cannot be guaranteed.
Disclaimer: This article is provided for general informational purposes only and does not constitute legal advice. Reading this article does not create a solicitor-client relationship between you and Booni Law. The information in this article may not reflect the most current legal developments and should not be relied upon as a substitute for professional legal advice tailored to your specific circumstances. If you require legal advice, please contact Booni Law.
