If you are seriously injured in a car accident, there are two types of claims that can be made. One is the no fault claim from your own insurance company for accident benefits, and the other is a lawsuit or court claim, against the at fault driver.
In Ontario, there are a number of very large insurance companies that sell car insurance, because of this sometimes your car insurance company may also be the same company that insures the person at fault for your injuries. Even though you can make two separate claims, it is the same insurance company behind the scenes responding to both claims. In these situations, there are strict internal privacy rules insurance companies have to follow to protect your privacy.
1) Accident Benefits And Your Confidential Private Data
Your policy provides standard “no-fault” or accident benefits to give you access to early treatment, possibly some income replacement if you can’t do your job, and some other benefits. If your injuries are “catastrophic” there can be extensive benefits available to you, from your own insurance company. These benefits are available based on premiums paid, to anyone injured in a car accident regardless of who is at fault.
When you make a claim for no fault benefits, your car insurance company can request your medical records, they can request that you attend a medical examination set up by with their own medical assessor, and in some cases that you attend to answer questions under oath, about your claims. If you fail or refuse to cooperate, your insurer can legally deny you access to your benefits, despite any premiums paid. In other words, the law requires you to cooperate in order to qualify for your benefits.
2) Your Car Insurer’s Duty of Good Faith and Privacy Protection
Insurance policies create relationships in law which involve a “duty of utmost good faith.” This means you have a legal responsibility to be honest with the insurance company – both when applying for a policy, and when making a claim. The insurance company also owes you a duty of utmost good faith when you apply for benefits – this means they must act fairly, reasonably and honestly in approving or denying your claims.
When you are compelled by law to provide your insurance company with private and confidential medical information you have the right to be assured that it will only be used for the purposes of your accident benefit claim, and that otherwise your information and documents will be kept strictly private.
3) What If Your Car Insurer Also Insures The Driver Who Hit You?
So, what happens when you get in a car accident, and your insurance company coincidentally also insures the at fault driver you are suing for the injuries they caused to you? Should your insurance company be able to use the private and confidential medical information that you are required by law to provide them for your accident benefits claim, to the lawyer they hire to defend your lawsuit against the at fault driver? Fortunately, the answer to this question is no.
4) The “Privacy Wall” In Ontario Insurance Companies
In fact, not well known to the public, insurance companies are required to maintain a “privacy wall” which completely separates the accident benefits claim’s departments from the third-party liability claims departments. To protect the privacy rights of their insureds, car insurance companies cannot share information between the two departments internally. However, there have been scenarios where insurance company’s have breached the privacy rights of their customers, and tested the limits of this rule and their duty of utmost good faith in the Courts.
5) Breach Of The “Privacy Wall” – Dervisholli v. Cervenak
In 2015, Sabrina Singh successfully argued a precedent-setting case, in the Ontario Divisional Court decision of Dervisholli v. Cervenak, where this very issue arose.
Ms. Dervisholli was insured for no fault benefits by the same insurance company as the driver who caused the accident. In other word’s one insurance company would be responsible for responding to the claim for no fault benefits and the third-party liability claim for a single accident. Because of the “privacy wall” requirement, the accident benefits claim department would have a claims file opened under Ms. Dervisholli’s policy, and there would be a separate file opened for the same accident by the third-party liability claims department for the at fault driver.
In this case, it was discovered that the insurance company breached the “privacy wall” rule, and shared Ms. Dervisholli’s accident benefits claims file with their third-party liability claims department internally. Sabrina Singh successfully argued that the lawyer they hired to deal with both the accident benefits claims and the at fault lawsuit against the other driver, was in a conflict of interest because the insurance company breached the “privacy wall” between the two separate departments and improperly shared Ms. Dervisholli’s and other claimants private and confidential information, violating their right to privacy, and the insurer’s duty to act in utmost good faith.
The decision was ground breaking in affirming the insurance industry practice of maintaining a “privacy wall” separating the accident benefits claims departments and the third-party liability claims departments. The case clarified and overruled previous inconsistent cases decided both by the Courts and by the tribunal for Accident Benefits Claims.
6) What Does This All Mean?
This case highlights the important role your personal injury lawyer plays in fighting for your claim for accident benefits and pursuing your lawsuit against the driver. Their job isn’t just to get you a good settlement, but also to make sure that your insurance company is abiding by all of its obligations to you under your policy and the law, including protecting your expectation of privacy.
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