CAA Insurance was hit with a 30% penalty after Ontario's tribunal found it cut off accident benefits over documents the insurer had apparently misplaced.
The decision in Alapit v. CAA Insurance Company, 2026 ONLAT 24-009287/AABS, released April 27, 2026, by the Licence Appeal Tribunal's Automobile Accident Benefits Service, found that CAA twice improperly suspended income replacement benefits to Marcelina Alapit, who was injured in a December 2023 car accident and had since been forced into a homeless shelter.
Alapit suffered injuries to her pelvis, ribs, and a concussion when her car was struck at an urban intersection. She applied for statutory accident benefits and, at the time of the accident, worked at a department store and reported self-employment as an immigration consultant. She had also worked at a casino in the year before the crash.
The paperwork quickly became complicated. Alapit submitted multiple application forms with inconsistencies about her employment, and her initial employer confirmation forms were incomplete. CAA asked for properly completed forms and pay stubs - a request the Tribunal called reasonable.
Over the next several months, Alapit delivered. She sent an employer form from the casino by email on April 8, 2024, and a completed form from the department store on July 24, 2024.
Then things went sideways.
In January 2025, CAA acknowledged receiving both forms and calculated Alapit's benefits at $153.71 per week. It issued a lump sum for an earlier period. But it also said she would not be paid for December 5, 2024, through January 8, 2025, claiming she had failed to provide requested information.
The problem, as Vice-Chair Brian Norris saw it, was that CAA's own records showed the casino form logged as received on January 8, 2025 - even though it had been emailed to the insurer nine months earlier. The Tribunal found that CAA appears to have "misplaced the OCF-2 received via email" and was "incorrectly trying to place the blame on the Applicant."
A second suspension followed. On the same day it issued the lump sum, CAA sent Alapit a request for information from 13 different sources, giving her two weeks to comply. When the full package did not arrive, it cut off benefits again effective March 3, 2025.
By then, Alapit was homeless and living in a shelter. She had provided records from multiple healthcare providers and written confirmations, and had sent request letters to the remaining sources. The Tribunal found she had complied or made reasonable efforts to do so.
Vice-Chair Norris pointed to a provision allowing insurers to seek repayment if benefits later prove incorrect, finding it "makes it clear that insurers are to pay specified benefits as soon as there is enough information to calculate the benefit and then correct any overpayments thereafter." CAA, the Tribunal found, had enough information months earlier.
The 30% penalty - rather than the 50% Alapit sought under section 10 of Regulation 664 - acknowledged that her self-employment status created some genuine ambiguity. But the Tribunal found CAA's demand for bank records was "nevertheless unnecessary to make a good faith IRB calculation" when employer-completed forms were already on file. A request for $1,000 in costs was denied.
The case is a reminder that benefit suspensions require more than boilerplate requests - and that the Tribunal is watching how insurers handle files when claimants are at their most vulnerable.
