Policy lapse? Why this auto renewal slip-up wasn’t the broker’s fault

When a breakdown in communications between a broker and a policyholder leads to a coverage lapse, sometimes it’s the responsibility of the client to follow up with the broker and not the other way around, the Civil Resolution Tribunal (CRT) of British Columbia found June 3.

Francois Picard was driving his Honda Civic on May 14, 2023, when he was rear-ended by another driver, causing just over $6,297.65 damage to the rear bumper and trunk.

Picard told CRT that the Insurance Corporation of BC (ICBC) found he was not at fault for the accident. But when he reported the accident to ICBC on May 15, 2023, he learned there was an auto insurance ‘renewal error’ and he was not covered for the damage.

He sued his brokerage, Harris & Leib Insurance Brokers, for $5,000 to meet the threshold for small claims court matters. He blamed the brokerage for the lack of auto insurance coverage, citing a breakdown in communication with the broker.

According to Picard, the insurance broker — identified in the decision by the initials ‘BVL’ — asked him the ‘standard renewal questions,’ and as requested, he sent her a screenshot of the [Honda Civic’s] odometer,” the tribunal decision states. “He says he sent the screenshot ‘to complete the renewal process to be signed electronically in the days to follow.’ Mr. Picard says he trusted [the brokerage] to ‘proceed with completing the renewal process with ICBC as usual.’”

On the brokerage side, BVL “says she was waiting for an odometer picture for the Civic before completing that insurance renewal,” the tribunal found. “She said she received an email from Mr. Picard on Mar. 8, 2023. She says the email said it was a picture of the Civic’s odometer, but she could not open the attached file.”

BVL said Picard had no further contact with anyone from Harris until he called on May 15 about the accident.

The tribunal ruled the broker didn’t have to follow up. Instead, it was up to Picard to ensure he had coverage in place.

“Essentially, the breakdown between the parties occurred when BVL could not open the odometer reading email attachment,” the tribunal found. “While BVL could have followed up on that, I find she had no responsibility to do so. Rather, when Mr. Picard received no insurance paperwork or request for payment before the Civic’s insurance expired in early April 2023, I find it was his responsibility to follow up with [the brokerage] or another insurance broker.

“In making this finding, I place particular weight on [the brokerage’s] uncontested assertion that the 2022-23 ICBC insurance renewal for the Civic was done by another brokerage. Given this, I find it was reasonable for BVL and [the brokerage] to assume Mr. Picard had renewed the Civic’s insurance elsewhere.”

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The situation may have been complicated by the fact that Picard called the brokerage to request insurance renewals on two vehicles at once — both his Honda Civic and an Alfa Romeo.

“BVL says she renewed the Alfa Romeo insurance,” the tribunal decision states. “She said she could not wait for an odometer reading for the Alfa Romeo because the insurance on that car had already expired.

“BVL says she sent Mr. Picard a ‘SignNow’ electronic signature request for the Alfa Romeo insurance, which he signed on Mar. 11. [The brokerage] provided a screenshot confirming the Mar. 11 signature, and a copy of the completed Alfa Romeo insurance paperwork.”

But the tribunal said it was up to Picard to realize that, although the Alfa Romeo insurance was renewed, the Civic insurance was not.

“I accept that Mr. Picard might have been confused because he paid for the Alfa Romeo’s insurance, and received the Alfa Romeo insurance paperwork,” CRT Tribunal Member Kate Campbell wrote. “However, I find Mr. Picard had a responsibility to review the paperwork before signing it. If he had done so carefully, he would have noticed that the Civic insurance was not mentioned, included, or billed.

“I find no indication that [the brokerage] acted unreasonably by not providing insurance that Mr. Picard had not signed for or paid for. Rather, I find Mr. Picard had a responsibility to follow up to ensure the policy was completed.”