Insurance Act gets Nip and Tuck

It's been over half a century since the BC Insurance Act has been thoroughly revisited. Thankfully, it has been revisited, and more importantly, completely overhauled and rewritten. For the most part, the new Act clarifies many of the contradictions within the old Act. At the time when the Act was created most houses didn't have basements, in which case water intrusions were not a common peril. Hence, property insurance was divided into two categories: fire coverage and everything else. The new Insurance Act now offers more protection for consumers, harmonizes provisions with other provinces, and also clarifies coverage limitations.

Of the numerous changes brought by the new Act, arguably the ten that will have the most significance to property and casualty insurers in B.C. are the following;

• Restructuring of the Act - by eliminating the Act’s category-based approach to property insurance.
• Two year limitation period - which means an action against an insurer will need to be commenced within two years from the date the insured knew or ought to have known the loss or damage occurred.
• Postponement of limitation period – which means if the insured is a minor, the limitation will be postponed until he/she becomes a major (19 yrs old).
• Coverage for innocent co-insured – in other words this means if you are to become estranged from your spouse and they, in an act of vengeance, burn down the house, the innocent co-insured will be covered for the loss.
• Electronic delivery of documents – welcome to the “digital age”. Insurers will be permitted to use e-mail to deliver documents required by the Act.
• Dispute resolution process – the new process will allow for the resolution of disagreements between insurer and insured over the value of the property damage, similar to the current appraisal process.
• Expansion of relief from forfeiture provision – essentially gives the courts discretionary powers to relieve forfeitures & penalties in accordance to section 24 of the Law and Equity Act.
• Subrogation - The pro-rata sharing scheme will no longer apply only to subrogated fire claims, but instead, will now apply to all subrogated claims.
• Restriction on exclusions in the event of loss by fire – This will enable Legislature to make regulations at a later date to identify the permissible exclusions applicable to fire insurance claim. Currently the Act places some restrictions on what risks can be excluded from a fire insurance policy.
• Complaint resolution process - This new provision will require insurers to establish a process for dealing with customer complaints.
  
  In conclusion, we believe it is important to familiarize ourselves with the proposed changes to the Act which will force insurers and industry professionals to consider and prepare for the changes which will shortly come into effect.
  
  References
  
  Whitelaw Twinning: Overview of Substantive Changes to Insurance Act. by John Moshonas, John Vamplew and Robert Lilly.
  
  www.whitelawtwinning.com

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