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According to court documents, TD Insurance denied the claim because a 'future credit' was available for the flights and cruise ship.Reuters

An Ontario court has certified a class-action lawsuit against TD Home and Auto Insurance Company that says Canadians were wrongfully denied trip-cancellation benefits after the COVID-19 outbreak and government advisories forced them to halt travel plans.

Ontario Superior Court Justice Edward Morgan certified a $10-million lawsuit that alleges TD Insurance breached the terms of its travel-cancellation insurance policies after denying reimbursement claims on the basis that policyholders had been offered credits or vouchers.

The court certifies a class action before proceeding with a hearing to determine if it is the best option to manage multiple claims that are similar in nature.

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A TD Insurance spokesperson declined to comment as the “matter is before the courts.”

Toronto-based law firm Samfiru Tumarkin LLP filed the class action on behalf of Kevin Lyons in September, 2020, who had to cancel a 12-day trip to Italy for himself, his wife and two children – which included a one-week Mediterranean cruise.

Mr. Lyons and his family were scheduled to leave on March 6 of that year, four days after the Government of Canada issued a travel advisory recommending against all non-essential travel to northern Italy because of COVID-19. The day before departure, Mr. Lyons cancelled his trip and later filed a $6,673.36 claim with TD Insurance.

According to court documents, TD Insurance denied the claim because a “future credit” was available for the flights and cruise ship.

“The policy does not exclude payment of eligible trip-cancellation expenses if non-monetary compensation, such as a credit, is offered to the insured person,” said Sivan Tumarkin, a partner with Samfiru Tumarkin.

Mr. Tumarkin said that while some airlines that had originally issued travel credits eventually refunded flights after a government bailout, other travel providers did not, including cruise ships, excursion companies, hotels and car rental companies.

“Insurers were let off the hook when the airlines were bailed out by the government,” Mr. Tumarkin said in an interview. “Canadians were finally able to get reimbursed in cash – but that didn’t cover all of their travel deposits and expenses. That is what insurance policies are for.”

During the certification hearing last week, lawyers for both Mr. Lyons and TD Insurance agreed the class action would include individuals who have been insured by TD since March 16, 2018, but would be limited to those who have submitted claims for travel benefits and were denied by TD Insurance.

“It has been well over a year since the first wave of the COVID pandemic necessitated the cancellation of travel for anyone insured under the policy in question,” Justice Morgan said in the certification court records.

“One can reasonably assume that those who have made a claim have done so. If not, they are still able to make one or to bring an individual action if they desire.”

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