Pay claims for damage to shared property by spouses, insurance association tells members
Insurance Bureau of Canada issues statement in wake of CBC investigation about domestic violence cases
Insurance companies across the country should take immediate action and stop denying the claims of victims whose partners destroy a shared property, says the association representing insurers in Canada.
The announcement on Tuesday by the Insurance Bureau of Canada comes following a CBC News investigation which uncovered several cases where a spouse set fire to a shared property and the partner's claim was denied.
Many insurance companies have a policy exclusion that can nullify coverage if anyone named on the policy intentionally damages a home, even in cases of domestic violence.
"The stories in the media on this issue are tragic," said Don Forgeron, president and CEO of the IBC. "Canadians across the country should receive equitable treatment regardless of their province of residence. It is quite simply the right thing to do."
IBC will ask its members in the coming days and weeks to extend protection to "innocent co-insureds," Forgeron said in a statement.
"[The IBC] is really stepping up," said Terri-lynn Robison, whose husband set the bed of their Ontario home on fire when she asked him for a divorce in May of 2016. "It's unfortunate it took such a sad situation for change to happen and that my case had to drag on for a year."
Allstate denied Robison's claim, saying her policy was "null and void" because her husband was on the shared policy. She has since hired a lawyer and filed a lawsuit.
Between 2009 and 2015, there were 180 reported cases of intimate partner arson, according to numbers just released to CBC by Statistics Canada. The worst year was 2012, with 35 cases across the country. Ontario alone had 12 cases. However, the numbers could be higher, as the statistics do not capture cases where partners were charged with arson against a property or with attempted murder.
A patchwork of insurance laws across the country means claims will be paid out in some provinces but not all. British Columbia, Alberta, Manitoba and Quebec are the only provinces with laws that compel insurers to pay out claims to victims. In those provinces, the amount paid out by the insurer is determined by the "innocent co-insured's proportional interest in the damaged property," Forgeron said.
In his statement, Forgeron urged all IBC members providing home insurance in Ontario and Atlantic Canada to "voluntarily align their policies with other jurisdictions."
In another case reported by CBC News, an Ontario woman was set on fire by her husband of 32 years. The flames from Wendy's Soczek's burning body then spread through their house. Soczek spent nine weeks in a coma and underwent 30 surgeries. Despite being a victim of a violent crime, her insurance company Allstate denied her claim to repair the house.
Soczek fought against Allstate for seven years, only to lose her case in court. The judge found that in the absence of a law to protect "innocent co-insureds" he couldn't make her insurer pay. However, following CBC's reporting on Soczek's case, Allstate has since approached her with a settlement, which she is considering.
Soczek's lawyer, Alf Kwinter, was "surprised and delighted" by the IBC's announcement. The public outcry following CBC's coverage put a lot of pressure on insurers, he says.
"They can see which way the wind is blowing," Kwinter said, noting that legislative changes are the only way to guarantee claimants are treated compassionately.
A Toronto MPP, Mike Colle, has introduced a private member's bill aimed at forcing insurers to pay out in cases like Soczek's. Despite the IBC asking its members to voluntarily amend their policies, Colle says he will still move forward with the bill.