Six auto insurance giants, including Canada’s two largest P&C carriers, are in legal bother and are facing a class-action lawsuit claiming $600 million in damages. The Toronto Star reports a series of lawsuits have befallen Intact, Aviva, Unifund Assurance, belairdirect, Certas Direct, and Allstate.
According to the investigation, the companies are accused of withholding hundreds of millions of dollars in Harmonized Sales Tax (HST) benefits payments from car collision victims. Each case is from Ontario and the companies are said to have ignored several calls from the provincial regulator to pay the costs.
Intact Insurance is Canada’s largest P&C provider, while Aviva Canada is in second place. Along with the other companies, they are said to have engaged in “unfair practices” following the introduction of HST in Ontario during 2010.
While there are several lawsuits against the individual companies, each is said to have avoided paying HST on medical benefits and other cases. HST was calculated as part of benefit limit claims, despite regulations stipulating they are not meant to.
“Anyone who buys insurance from these companies are being gouged,” said Paul Harte, who was the Star’s names as one of the lawyers representing plaintiffs in the lawsuits. “They’re paying for coverage that the companies have no intention of paying.”
All the insurance giants involved have declined to comment. However, Aviva spokesperson Fabrice de Dongo released a written statement insisting the company has complied with HST laws:
“Aviva has followed the industry position on HST being included within the maximum benefit amounts…and continues to support this interpretation.”