When Terri-lynn Robinson threatened to break up with her husband after 11-years of marriage, he set fire to their bedroom at their co-insured home.
Robinson escaped unharmed, her husband went to jail and then
Allstate denied her home insurance claim.
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Allstate is entitled to declare Robinson’s half of her VIP homeowner policy “null and void”, it believes, because Robinson lives in Ontario where the intentional or illegal actions of one co-insured (in this case her husband) reflects entirely on the other co-insured.
But if Robinson lived in B.C., Alberta, Manitoba or Quebec, provinces where the courts or legislatures have enacted innocent co-insured laws, the insurance company would face legal requirements to consider Robinson’s claim separately from her husband’s illegal and intentional actions. Robinson has been given $10,000 by Allstate for repairs to the home – but in total they are set to cost an estimated $160,000.
“If you’re living in Ontario, depending on the wording of the insurance policy, the coinsured isn’t entitled to coverage if the other co-insured is guilty of that conduct, provided the other insured has an insurable interest in the subject matter of the claim,” John R. Singleton, managing partner at Singleton Urquhart LLP said.
“In British Columbia the legislation has foreclosed that possibility and innocent insureds are protected by our insurance act. It varies across the country.”
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The legal environment in Canada’s six provinces without innocent co-insured laws, however, could change because of the political will behind the pro-consumer legislation according to Singleton.
“Any new legislation that finds its way into the common law provinces usually finds its way into the others in time. Some take longer than others,” Singleton said.
“It takes time, but once somebody bites, the others usually bite also.”
As far as Robinson’s particular case goes, Singleton said she doesn’t have a lot of options.
“There’s nothing else she can do. If the policy read that way, the only argument to have in front of a court is that a position like that (denying the claim) shouldn’t be enforced as a matter of public policy. I can’t imagine a court going that far because there’s a freedom of contract which is recognized by the court and usually upheld unless there’s an unfair advantage,” Singleton said.
“Alternatively, it’s pleading for the empathy and consideration of the insurance company and for paying the claim given the circumstances - and I wouldn’t like her chances.”
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