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See the Tables of Legislative Changes for this Act’s legislative history, including any changes not in force.

Insurance Act

[RSBC 2012] CHAPTER 1

Deposited with Clerk of the Legislative
Assembly on June 21, 2012

Part 2 — General Insurance Provisions

Application of this Part

8   This Part applies to every contract except

(a) subject to section 38, a contract of life insurance,

(b) subject to section 93, a contract of accident and sickness insurance,

(c) a contract of reinsurance, and

(d) subject to regulations under section 140, a contract to which Part 5 applies.

Contracts deemed to be made in British Columbia

9   A contract is deemed to have been made in British Columbia and must be construed accordingly if it

(a) insures a person domiciled or resident in British Columbia at the date of it, or

(b) has as its subject matter property or an interest in property located in British Columbia.

Gaming or wagering contracts voided

10   (1) A contract by way of gaming or wagering is void.

(2) A contract is deemed to be a gaming or wagering contract if the insured has no interest in the subject matter of the contract.

Contents of policy

11   (1) A policy must contain all of the following:

(a) the name of the insurer;

(b) the name of the insured;

(c) the name of the person to whom the insurance money is payable;

(d) the amount, or the method of determining the amount, of the premium for the insurance;

(e) the subject matter of the insurance;

(f) the indemnity for which the insurer may become liable;

(g) the event on the happening of which the liability is to accrue;

(h) the date the insurance takes effect;

(i) the date the insurance terminates or the method by which that date is established;

(j) the following statement:

Every action or proceeding against an insurer for the recovery of insurance money payable under the contract is absolutely barred unless commenced within the time set out in the Insurance Act.

(2) This section does not apply to a contract of fidelity insurance or surety insurance.

Dispute resolution

12   (1) In this section, "representative" means a dispute resolution representative appointed under subsection (4).

(2) This section applies to disputes between an insurer and an insured about a matter that under Statutory Condition 11 set out in section 29, or another condition of the contract, must be determined using this dispute resolution process.

(3) Either the insured or the insurer may demand in writing the other's participation in a dispute resolution process after proof of loss has been delivered to the insurer.

(4) Within 7 days after receiving or giving a demand under subsection (3), the insured and the insurer must each appoint a dispute resolution representative and, within 15 days after their appointment, the 2 representatives must appoint an umpire.

(5) A person may not be appointed as a representative if the person is

(a) the insured or the insurer, or

(b) an employee of the insured or the insurer.

(6) The representatives must

(a) determine the matters in dispute by agreement, and

(b) if they fail to agree, submit their differences to the umpire,

and the written determination of any 2 of them determines the matters.

(7) Each party to the dispute resolution process must pay the representative whom the party appointed, and each party must bear equally the expense of the dispute resolution process and the umpire.

(8) If

(a) a party to a dispute resolution process fails to appoint a representative in accordance with subsection (4), or

(b) a representative fails or refuses to act or is incapable of acting and the party that appointed that representative has not appointed another representative within 7 days after the failure, refusal or incapacity,

on application of the insurer or insured, on 2 days' notice to the other, the Supreme Court may appoint a representative.

(9) On an application under subsection (8), the court may award special costs against the person whose representative is appointed by the court, whether or not that person appeared on the application.

(10) If

(a) the representatives fail to appoint an umpire in accordance with subsection (4), or

(b) the umpire fails or refuses to act or is incapable of acting,

either representative may make an application to the superintendent for the appointment of an umpire, containing

(c) the names of 3 persons the applicant believes are capable of performing the functions of the umpire, and

(d) the credentials of the 3 persons.

(11) Before making an application under subsection (10), the applicant must give notice in writing to the other representative of the intention to make the application, which notice must contain the names and credentials the applicant is submitting to the superintendent under subsection (10).

(12) An application under subsection (10) must be accompanied by a copy of the notice, and the date it was given, under subsection (11).

(13) Within 15 days after receiving a notice under subsection (11), the other representative may provide to the superintendent and the applicant

(a) the names of 3 persons the representative believes are capable of performing the functions of the umpire, and

(b) the credentials of the 3 persons.

(14) The superintendent must appoint an umpire from the names provided under subsection (10) or (13) as soon as practicable after the earlier of the following occurs:

(a) the superintendent receives names and credentials under subsection (13);

(b) the period for providing names and credentials under subsection (13) expires.

Court may relieve against forfeiture and termination

13   Without limiting section 24 of the Law and Equity Act, if

(a) there has been

(i) imperfect compliance with a statutory condition as to the proof of loss to be given by the insured or another matter or thing required to be done or omitted by the insured with respect to the loss, and

(ii) a consequent forfeiture or avoidance of the insurance in whole or in part, or

(b) there has been a termination of the policy by a notice that was not received by the insured because of the insured's absence from the address to which the notice was addressed,

and the court considers it inequitable that the insurance should be forfeited or avoided on that ground or terminated, the court, on terms it considers just, may

(c) relieve against the forfeiture or avoidance, or

(d) if the application for relief is made within 90 days of the date of the mailing of the notice of termination, relieve against the termination.

Waiver and estoppel

14   (1) The obligation of an insured to comply with a requirement under a contract is excused to the extent that

(a) the insurer has given notice in writing that the insured's compliance with the requirement is excused in whole or in part, subject to the terms specified in the notice, if any, or

(b) the insurer's conduct reasonably causes the insured to believe that the insured's compliance with the requirement is excused in whole or in part, and the insured acts on that belief to the insured's detriment.

(2) Neither the insurer nor the insured is deemed to have waived any term or condition of a contract by reason only of

(a) the insurer's or insured's participation in a dispute resolution process under section 12,

(b) the delivery and completion of a proof of loss, or

(c) the investigation or adjustment of any claim under the contract.

Policy in accordance with terms of application

15   After an application or proposal for insurance is made by an insured, any policy issued or coverage provided by the insurer is deemed, for the benefit of the insured, to be in accordance with the terms of the application or proposal, unless the insurer immediately gives notice to the insured in writing of the particulars in which the policy or coverage differs from the application or proposal, in which case the insured, within 2 weeks after receiving the notice, may reject the policy.

Effect of terms of contract not set out in policy

16   (1) Each term and condition of a contract must be set out in full in the policy or in writing securely attached to it when it is issued and, unless so set out, is not valid or admissible in evidence to the prejudice of the insured or a person to whom insurance money is payable under the contract.

(2) This section does not apply to an alteration of the contract agreed on in writing between the insurer and the insured after the issue of the policy.

(3) If a contract, whether or not it provides for its renewal, is renewed by renewal receipt, it is sufficient compliance with subsection (1) if the terms and conditions of the contract were set out as required by that subsection and the renewal receipt identifies the contract by its number or date.

Misrepresentation and nondisclosure

17   (1) A contract is not rendered void or voidable by reason of any misrepresentation, or any failure to disclose on the part of the insured in the application or proposal for the insurance or otherwise, unless the misrepresentation or failure to disclose is material to the contract.

(2) The question of materiality is one of fact.

Effect of delivery of policy or premium receipt

18   If a policy or a receipt for the premium under a contract is delivered to the insured by the insurer or its agent, the insurer is bound by the contract, even though

(a) the delivery may have been made by the agent without authority, or

(b) the premium may not in fact have been paid.

Payment of refund to assignee

19   (1) If an insured assigns the right to refund of premium that may accrue by reason of the cancellation or termination of a contract of insurance under the terms of it and notice of the assignment is given by the assignee to the insurer, the insurer must pay any refund to the assignee, despite any condition in the contract, whether prescribed under this Act or not, requiring the refund to be paid to the insured or to accompany any notice of cancellation or termination to the insured.

(2) If the condition in the contract dealing with cancellation or termination by the insurer provides that the refund must accompany the notice of cancellation or termination, the insurer must include in the notice a statement that in place of payment of the refund in accordance with the condition the refund is being paid to the assignee under this section.

Effect of unpaid cheque or note for premium

20   (1) If a cheque, bill of exchange or promissory note is given, whether originally or by way of renewal, for the whole or part of any premium, and the cheque, bill of exchange or promissory note is not honoured according to its tenor, the insurer may terminate the contract

(a) in accordance with a statutory condition or other condition of the contract, or

(b) if there is no relevant statutory condition or other condition of the contract, by giving notice by registered mail.

(2) This section does not apply to a mutual company.

Collecting unpaid premiums

21   (1) An insurer may sue for the unpaid premium, and may deduct the amount of it from the amount for which the insurer is liable under the contract of insurance.

(2) This section does not apply to a mutual company.

Claims payable in Canadian money and in British Columbia

22   All money payable under a contract by an insurer must be paid in lawful money of Canada and, if the person entitled to it requires, in British Columbia.

Limitation of actions

23   (1) An action or proceeding against an insurer in relation to a contract must be commenced,

(a) in the case of loss or damage to insured property, not later than 2 years after the date the insured knew or ought to have known the loss or damage occurred, and

(b) in any other case, not later than 2 years after the date the cause of action against the insurer arose.

(2) An action must not be brought for the recovery of money payable under a contract of insurance until the expiration of 60 days after proof, in accordance with the contract

(a) of the loss, or

(b) of the happening of the event on which the insurance money is to become payable,

or of such shorter period as may be set by the contract of insurance.

Payment by insurer into court

24   (1) If an insurer cannot obtain a sufficient discharge for insurance money for which it admits liability, the insurer may apply to the court without notice to any person for an order for the payment of it into court, and the court may order the payment into court to be made on terms as to costs and otherwise the court directs, and may provide to what fund or name the amount must be credited.

(2) The receipt of the registrar or other proper officer of the court is a sufficient discharge to the insurer for the insurance money paid into court, and the insurance money must be dealt with according to the orders of the court.

Third person right of action against insurer

25   (1) If a judgment has been granted against a person in respect of a liability against which the person is insured and the judgment has not been satisfied, the judgment creditor may recover by action against the insurer the lesser of

(a) the unpaid amount of the judgment, and

(b) the amount that the insurer would have been liable under the policy to pay to the insured had the insured satisfied the judgment.

(2) The claim of a judgment creditor against an insurer under subsection (1) is subject to the same equities as would apply in favour of the insurer had the judgment been satisfied by the insured.

Insurer to furnish copy of application and policy

26   (1) On request, the insurer must furnish to the insured a copy of

(a) the insured's application or proposal for insurance, and

(b) the insured's policy.

(2) An insurer may charge a reasonable fee to cover its expenses in furnishing copies of a policy other than the first copy.

Insurer to furnish forms

27   (1) Immediately on receipt of a request, and in any event no later than 60 days after receiving a notice of loss, an insurer must furnish to the insured or person to whom insurance money is payable forms on which the proof of loss required under the contract may be made.

(2) If an insurer does not comply with subsection (1), section 23 (2) is not available to the insurer as a defence to an action brought for the recovery of insurance money payable under the contract.

(3) If, within 30 days after a notice of loss is given, the insurer has adjusted the loss acceptably to the person to whom the insurance money is payable, the insurer need not comply with subsection (1).

(4) An insurer, by reason only that the insurer furnishes forms on which to make the proof of loss, must not be taken to have admitted that a valid contract is in force or that the loss in question falls within the insurance provided by the contract.

Cancellation by insurer

28   (1) If a loss under a contract has, with the consent of the insurer, been made payable to a person other than the insured, the insurer must not cancel or alter the contract to the prejudice of that person without notice to that person.

(2) The length of notice and manner of giving the notice under subsection (1) must be the same as for a notice of cancellation given to the insured under the contract.

Statutory conditions

29   (1) Subject to subsections (2) and (3), the conditions set out in this section are deemed to be part of every contract, and must be printed on every policy under the heading "Statutory Conditions", and no variation or omission of or addition to a statutory condition is binding on the insured.

(2) This section does not apply to contracts of surety insurance or a class of insurance prescribed by regulation.

(3) Statutory Conditions 1 and 6 to 13 apply only to, and need only be printed on, contracts that include insurance against loss or damage to property.

(4) In this section, "policy" does not include an interim receipt or binder.

 STATUTORY CONDITIONS
 Misrepresentation
 1. If a person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance that is material to be made known to the insurer in order to enable it to judge the risk to be undertaken, the contract is void as to any property in relation to which the misrepresentation or omission is material.
 Property of others
 2. The insurer is not liable for loss or damage to property owned by a person other than the insured unless
  (a) otherwise specifically stated in the contract, or
  (b) the interest of the insured in that property is stated in the contract.
 Change of interest
 3. The insurer is liable for loss or damage occurring after an authorized assignment under the Bankruptcy and Insolvency Act (Canada) or a change of title by succession, by operation of law or by death.
 Material change in risk
 4. (1) The insured must promptly give notice in writing to the insurer or its agent of a change that is
   (a) material to the risk, and
   (b) within the control and knowledge of the insured.
  (2) If an insurer or its agent is not promptly notified of a change under subparagraph (1) of this condition, the contract is void as to the part affected by the change.
  (3) If an insurer or its agent is notified of a change under subparagraph (1) of this condition, the insurer may
   (a) terminate the contract in accordance with Statutory Condition 5, or
   (b) notify the insured in writing that, if the insured desires the contract to continue in force, the insured must, within 15 days after receipt of the notice, pay to the insurer an additional premium specified in the notice.
  (4) If the insured fails to pay an additional premium when required to do so under subparagraph (3) (b) of this condition, the contract is terminated at that time and Statutory Condition 5 (2) (a) applies in respect of the unearned portion of the premium.
 Termination of insurance
 5. (1) The contract may be terminated
   (a) by the insurer giving to the insured 15 days' notice of termination by registered mail or 5 days' written notice of termination personally delivered, or
   (b) by the insured at any time on request.
  (2) If the contract is terminated by the insurer,
   (a) the insurer must refund the excess of premium actually paid by the insured over the prorated premium for the expired time, but in no event may the prorated premium for the expired time be less than any minimum retained premium specified in the contract, and
   (b) the refund must accompany the notice unless the premium is subject to adjustment or determination as to amount, in which case the refund must be made as soon as practicable.
  (3) If the contract is terminated by the insured, the insurer must refund as soon as practicable the excess of premium actually paid by the insured over the short rate premium for the expired time specified in the contract, but in no event may the short rate premium for the expired time be less than any minimum retained premium specified in the contract.
  (4) The 15 day period referred to in subparagraph (1) (a) of this condition starts to run on the day the registered letter or notification of it is delivered to the insured's postal address.
 Requirements after loss
 6. (1) On the happening of any loss of or damage to insured property, the insured must, if the loss or damage is covered by the contract, in addition to observing the requirements of Statutory Condition 9,
   (a) immediately give notice in writing to the insurer,
   (b) deliver as soon as practicable to the insurer a proof of loss in respect of the loss or damage to the insured property verified by statutory declaration,
    (i) giving a complete inventory of that property and showing in detail quantities and cost of that property and particulars of the amount of loss claimed,
    (ii) stating when and how the loss occurred, and if caused by fire or explosion due to ignition, how the fire or explosion originated, so far as the insured knows or believes,
    (iii) stating that the loss did not occur through any wilful act or neglect or the procurement, means or connivance of the insured,
    (iv) stating the amount of other insurances and the names of other insurers,
    (v) stating the interest of the insured and of all others in that property with particulars of all liens, encumbrances and other charges on that property,
    (vi) stating any changes in title, use, occupation, location, possession or exposure of the property since the contract was issued, and
    (vii) stating the place where the insured property was at the time of loss,
   (c) if required by the insurer, give a complete inventory of undamaged property showing in detail quantities and cost of that property, and
   (d) if required by the insurer and if practicable,
    (i) produce books of account and inventory lists,
    (ii) furnish invoices and other vouchers verified by statutory declaration, and
    (iii) furnish a copy of the written portion of any other relevant contract.
  (2) The evidence given, produced or furnished under subparagraph (1) (c) and (d) of this condition must not be considered proofs of loss within the meaning of Statutory Conditions 12 and 13.
 Fraud
 7. Any fraud or wilfully false statement in a statutory declaration in relation to the particulars required under Statutory Condition 6 invalidates the claim of the person who made the declaration.
 Who may give notice and proof
 8. Notice of loss under Statutory Condition 6 (1) (a) may be given and the proof of loss under Statutory Condition 6 (1) (b) may be made
  (a) by the agent of the insured, if
   (i) the insured is absent or unable to give the notice or make the proof, and
   (ii) the absence or inability is satisfactorily accounted for, or
  (b) by a person to whom any part of the insurance money is payable, if the insured refuses to do so or in the circumstances described in clause (a) of this condition.
 Salvage
 9. (1) In the event of loss or damage to insured property, the insured must take all reasonable steps to prevent further loss or damage to that property and to prevent loss or damage to other property insured under the contract, including, if necessary, removing the property to prevent loss or damage or further loss or damage to the property.
  (2) The insurer must contribute on a prorated basis towards any reasonable and proper expenses in connection with steps taken by the insured under subparagraph (1) of this condition.
 Entry, control, abandonment
 10. After loss or damage to insured property, the insurer has
  (a) an immediate right of access and entry by accredited representatives sufficient to enable them to survey and examine the property, and to make an estimate of the loss or damage, and
  (b) after the insured has secured the property, a further right of access and entry by accredited representatives sufficient to enable them to appraise or estimate the loss or damage, but
   (i) without the insured's consent, the insurer is not entitled to the control or possession of the insured property, and
   (ii) without the insurer's consent, there can be no abandonment to it of the insured property.
 In case of disagreement
 11. (1) In the event of disagreement as to the value of the insured property, the value of the property saved, the nature and extent of the repairs or replacements required or, if made, their adequacy, or the amount of the loss or damage, those questions must be determined using the applicable dispute resolution process set out in the Insurance Act, whether or not the insured's right to recover under the contract is disputed, and independently of all other questions.
  (2) There is no right to a dispute resolution process under this condition until
   (a) a specific demand is made for it in writing, and
   (b) the proof of loss has been delivered to the insurer.
 When loss payable
 12. Unless the contract provides for a shorter period, the loss is payable within 60 days after the proof of loss is completed in accordance with Statutory Condition 6 and delivered to the insurer.
 Repair or replacement
 13. (1) Unless a dispute resolution process has been initiated, the insurer, instead of making payment, may repair, rebuild or replace the insured property lost or damaged, on giving written notice of its intention to do so within 30 days after receiving the proof of loss.
  (2) If the insurer gives notice under subparagraph (1) of this condition, the insurer must begin to repair, rebuild or replace the property within 45 days after receiving the proof of loss, and must proceed with all due diligence to complete the work within a reasonable time.
 Notice
 14. (1) Written notice to the insurer may be delivered at, or sent by registered mail to, the chief agency or head office of the insurer in the province.
  (2) Written notice to the insured may be personally delivered at, or sent by registered mail addressed to, the insured's last known address as provided to the insurer by the insured.

Proportionate contributions

30   (1) If, on the happening of loss or damage, there is in force more than one contract covering the loss or damage, the insurers under the respective contracts are each liable to the insured for their rateable proportion of the loss, unless it is otherwise expressly agreed in writing between the insurers.

(2) For the purpose of subsection (1), a contract is deemed to be in force despite any term or condition of it that the contract does not cover the loss or damage or attach, come into force or become insurance with respect to the loss or damage until after full or partial payment of any loss under any other contract.

(3) Nothing in subsection (1) affects

(a) the validity of any divisions of the amount of insurance into separate items,

(b) the limits of insurance on specified property,

(c) a clause referred to in section 31, or

(d) a contract condition limiting or prohibiting the having or placing of other insurance.

(4) Nothing in subsection (1) affects the operation of a deductible clause, and

(a) if one contract contains a deductible clause, the prorated proportion of the insurer under that contract must be first ascertained without regard to the clause, and then the clause must be applied only to affect the amount of recovery under that contract, and

(b) if more than one contract contains a deductible clause, the prorated proportions of the insurers under those contracts must be first ascertained without regard to the deductible clauses, and then the highest deductible must be prorated among the insurers with deductibles, and these prorated amounts affect the amount of recovery under those contracts.

(5) Nothing in subsection (4) is to be construed to have the effect of increasing the prorated contribution of an insurer under a contract that is not subject to a deductible clause.

(6) Despite subsection (1), insurance on identified articles is a first loss insurance as against all other insurance.

Limitation of liability clause

31   A contract containing

(a) a deductible clause,

(b) a co-insurance, average or similar clause, or

(c) a conditional or unconditional clause limiting recovery by the insured to a specified percentage of the value of any property insured at the time of loss,

must have printed or stamped on its first page in conspicuous bold type the words "This policy contains a clause which may limit the amount payable" and, unless these words are so printed or stamped, the clause is not binding on the insured.

Unjust contract provisions

32   If a contract contains any term or condition, other than an exclusion prescribed by regulation for the purposes of section 33 (1) or established by section 34 (2) or (3), that is or may be material to the risk, including, but not restricted to, a provision in respect of the use, condition, location or maintenance of the insured property, the term or condition is not binding on the insured if it is held to be unjust or unreasonable by the court before which a question relating to it is tried.

Exclusions from coverage

33   (1) An insurer must not provide in a contract that includes coverage for loss or damage by fire, or another peril prescribed by regulation, an exclusion relating to the cause of the fire or peril other than an exclusion prescribed by regulation or established by section 34 (2) or (3).

(2) An insurer must not provide in a contract that includes coverage for loss or damage by fire, or another peril prescribed by regulation, an exclusion relating to the circumstances of the fire or peril if those circumstances are prescribed by regulation.

(3) An exclusion contrary to subsection (1) or (2) is invalid.

(4) For greater certainty, subsections (1) and (2) apply in relation to loss or damage by fire, however the fire is caused and in whatever circumstances and whether the coverage is under a part of the contract specifically covering loss or damage by fire or under another part.

Fire perils insured against

34   (1) A contract that includes coverage for loss or damage by fire is deemed to cover the insured property against loss or damage caused by

(a) lightning, or

(b) an explosion of natural gas or manufactured gas

(i) in a building that does not form part of a gasworks,

(ii) from a cause, other than a cause excluded under section 33 (1), and

(iii) whether or not fire ensues.

(2) The coverage described in subsection (1) (a) does not include coverage against loss of or damage to electrical devices or appliances caused by lightning or other electrical currents, unless a fire

(a) originates outside the device or appliance, and

(b) causes the loss or damage.

(3) Unless a contract that includes coverage for loss or damage by fire specifically provides otherwise, the contract does not cover insured property against loss or damage caused by contamination by radioactive material, resulting directly or indirectly from fire, lightning or an explosion described in subsection (1) (b).

(4) If property

(a) is insured at a specified location, and

(b) is necessarily removed from the specified location to prevent loss or damage, or further loss or damage, to the property,

that part of the insurance that exceeds the amount of the insurer's liability for any loss or damage incurred before the date of removal must cover, for 7 days or for the unexpired term of the contract, whichever is the shorter period, the property removed from, and any property remaining at, the specified location on a prorated basis in accordance with the value of the property at each location.

Recovery by innocent persons

35   (1) Despite section 5, if a contract contains a term or condition excluding coverage for loss or damage to property caused by a criminal or intentional act or omission of an insured or any other person, the exclusion applies only to the claim of a person

(a) whose act or omission caused the loss or damage,

(b) who abetted or colluded in the act or omission,

(c) who

(i) consented to the act or omission, and

(ii) knew or ought to have known that the act or omission would cause the loss or damage, or

(d) who is in a class prescribed by regulation.

(2) Nothing in subsection (1) allows a person whose property is insured under the contract to recover more than their proportionate interest in the lost or damaged property.

(3) A person whose coverage under a contract would be excluded but for subsection (1) must comply with any requirements prescribed by regulation.

Subrogation

36   (1) The insurer, on making a payment or assuming liability under a contract, is subrogated to all rights of recovery of the insured against any person, and may bring an action in the name of the insured to enforce those rights.

(2) If the net amount recovered after deducting the costs of recovery is not sufficient to provide a complete indemnity for the loss or damage suffered, that amount must be divided between the insurer and the insured in the proportions in which the loss or damage has been borne by them respectively.

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