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What you need to know about COVID-19: October 20, 2020
Are Canadian families being defrauded by travel Insurance companies? When COVID-19 had taken the world by storm in early 2020, many soon-to-be convocating students had already paid for their graduation trips that had been organized by their respective schools. These costly vacations, booked through Explorica, Canada Inc., were insured. But once international travel was officially halted, the insuring companies (as well as Explorica) have refused to pay. This scandal has been the topic of various news reports across the country, including The Guardian’s article (Teens, parents in P.E.I. caught in middle of travel insurance spat, Sept. 16) by Charlottetown reporter Stu Neatby.
My daughter was one of these students. Graduating this year, she and 48 of her fellow classmates were scheduled to travel to Paris, France. In early March, due to my concerns stemming from COVID-19’s rapid European spread, I contacted the teacher/organizer who would be accompanying the students. Out of concern for my daughter’s safety, I inquired about cancellation policy. I was told it was not a viable option, as the travel insurance would not kick in until Canada had officially declared a travel advisory to France. And when that day finally came, little did we know we were about to become embroiled in an extremely time-consuming battle to receive our money owed, which we have not yet recovered.
It has been exactly half of a year since the trip was cancelled and we still have not been paid.
Explorica explained they had insured the school’s trip through Arch Insurance, Old Republic Insurance and Trip Mate. They have stated repeatedly that they have done their part and that the various insurance companies should be paying us. And in return, the insurance companies have all demanded more paperwork from parents/students, directing us back to Explorica to get it. Explorica then refuses to give us anything else. We have essentially become the ball in a seemingly never-ending game of tennis between these corporations.
For five months, parents and students — not just in P.E.I., but across the country — have been subjected to false promises, accusations, and lies from all parties involved. The insurance companies, in unison with Explorica, have sent us on one wild goose chase after another, which begs the question: At what point do these obvious stall tactics constitute fraud? If so, who will investigate?
The alleged policy underwriter, Arch Insurance, is located in Toronto. They’re currently being managed by an independent contractor, Michelle Kresic. Michelle has been at the forefront of this chaos and is currently manning the phones for the company. After numerous discussions with Michelle, she informed me that she often works for companies in similar distress such as that of which Arch Insurance now finds itself in. In my opinion, bringing in a professional to shoulder the burden of expected long-term contempt from clients indicates that Arch Insurance has no intention of paying out the money it owes in a timely fashion, if at all.
For an insurance company facing economic hardship, this would be an excellent strategy, hypothetically speaking of course. Without actually denying the claim, it leaves the victims with very little recourse. Canadians could go to the Insurance Bureau of Canada, but it wouldn’t be very likely to bear fruit. One of the documents that the ICB requests is “written denial of payment of claim” from the insurer. Since these companies have not technically denied the claim, are they now free to delay payment and make claimants jump through hoops without fear of reproach? That is where the Westray Bill (Bill C-45) could potentially come into play.
The Westray Bill became law on March 31, 2004. It was the federal response to the Westray Mining disaster and was drafted as an effort to keep corporations from being able to avoid criminal liability. The spirit of the bill is to ensure that when a corporation commits a crime; they cannot simply shift their assets around, go bankrupt, and then re-emerge unscathed. The directing minds of a corporation, when committing a crime for the benefit of said corporation, can be subject to criminal prosecution.
The question that still needs to be answered: has this matter transformed from a civil matter into a criminal one? I’d be lying if I said I knew the answer to that with any degree of certainty. I do think that if these companies are going to collect money for insurance, they should have a duty to pay out when the very thing that was insured fails. Surely there must be provisions within the criminal code that prohibits companies from collecting payment toward insurance when it knowingly cannot afford to pay? There certainly are some regarding fraud, and to many of us parents, this appears to be exactly that.
There is nothing illegal about insurance companies going out of business. In fact, we have seen it happen countless times in recent years, especially during the Global Financial Crisis of 2008. However, despite the pandemic causing undue hardships on many businesses, COVID-19 did not give these companies carte blanche to fail nor to string its clients along. I personally think we have now regressed beyond the point of not only requiring reimbursement but are also now deserving of justice in the criminal courts.
These are exactly the type of predatory companies and behaviours that the courts, legislators, police and school boards need to be protecting ordinary citizens from. Someone needs to intervene and start doing exactly that.
Nicholas Frost is a UNB law student and a parent of a child whose 2020 class trip was cancelled. He lives in Summerside.