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Not Reading Policy Costs Insured More Because They Wrongly Sued.

Larsen v Assureway Group, 2021 NBQB 211.

Reading Time: 3 Minutes

Author: Weston McArthur

In October 2017, Mr. Jason Larsen (the Plaintiff) bought a 2017 Chevrolet Cruze for $24,961.38. He also purchased a True Gap Insurance (TGI) policy from Assureway Group (the Defendant) for $39,145.50. In the event of an accident, this type of policy is intended to fill the gap between the amount owed on the vehicle and amount at which the vehicle is valued.

Almost two years after the Plaintiff purchased the Cruze, it was destroyed in a fire and deemed a total loss. Mr. Larsen was reimbursed for what he paid for the vehicle; however, he still had $7,201.69 on his loan for the car.

He made a claim with the Defendant, who declined to pay the balance. The Plaintiff then sued the Defendant in the New Brunswick Court of Queen’s Bench for the outstanding amount.

The Court reviewed the terms of the policy, which mandated that “it … excluded the payment of negative equity added to the purchase of the car” [para 19].

The Plaintiff admitted that he wasn’t aware of this exclusion, as he had not read the policy; if the Plaintiff had known, he could have simply cancelled the policy within 30 days of receiving it. In effect, he was suing for no reason.

The Court rejected all arguments that the Plaintiff brought forth, as the policy was clear and unambiguous, and ruled in favour of the Defendant.


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