In Usanovic v. La Capitale Life Insurance Company, the plaintiff argued that the defendant insurer owed him a duty of good faith that included an obligation to provide him with notice of the limitation period.
Justice Broad rejected this argument in a well-reasoned decision. After reviewing the jurisprudence, he concluded that no such obligation exists:
[40] It would appear that, at its highest, the obligation of good faith and fair dealing arguably carries with it a positive obligation on an insurer to inform its insured of the nature of the benefits available under the policy. There is a marked difference, however, between imposing on an insurer a positive obligation to advise with respect to rights and benefits internal to the policy and the imposition of an obligation to advise with respect to the application of law external to the policy, such as pursuant to the Limitations Act.
[41] In my view the court should be circumspect in extending the common law to impose positive obligations of general application on parties, particularly where the implications of so doing are unknown. The law of insurance is broadly occupied by legislation and in my view it should be left to the legislature to regulate, if it deems it necessary and appropriate, the nature and extent of information which must be given by insurers to their insureds upon denial of benefits, including the existence and details of applicable limitation periods.
[42] I find that there was no obligation in law on the defendant to advise the plaintiff of the applicable limitation period in the Limitations Act.
The decision also includes a good overview of the jurisprudence considering whether a denial of benefits is clear and unequivocal. See paras. 20-28.
