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Home insurance payouts for victims of domestic violence

By Lisa Gelman

A recently introduced private members bill from Toronto MPP Mike Colle seeks to direct insurers to pay out claims for cases involving domestic violence.

The Innocent Persons Insurance Recovery Act was introduced by Colle in the wake of a CBC investigation that exposed clauses found in some insurance company policies that nullify fire damage coverage if one of the people named in the policy intentionally starts the fire.

In 2016, a woman and her husband got into an argument which ended with her telling him their marriage was over. She proceeded to head to their bedroom to pack up his clothes. Her husband responded by lighting their bed on fire while she was still in the room. While she escaped unharmed, there was an estimated $160,000 in damages to the home. Her husband was sentenced to two years less a day after pleading guilty to one count of arson with disregard for human life.

It was only after the woman filed a claim with her insurer that she realized she was not going to receive coverage. The insurance company informed her that her policy was null and void because her husband, who was insured under the same policy, had intentionally set the fire.

In Ontario, insurance companies can deny a claim if the actions of anyone else on the policy are responsible for damage if the actions are deemed “intentional or criminal.”

Paula Del Cid, residential program manager at Interval House, Canada’s first shelter for women and children, told CBC “Property destruction is often about sending a message”…”That message can be: ‘I can do this to your property and the same thing can happen to you,’ It’s like an extra show of who’s in control, and it’s also another way to dehumanize a person.”

Aiming to change the Insurance Act

British Columbia, Alberta, Manitoba and Quebec all have laws that require insurance companies to pay out claims to “innocent co-insureds.” Saskatchewan is currently working on amending its insurance act.

Colle says “It is critical that something be done to right this wrong,” adding “This is a very blatant injustice that exists in Ontario that has been on the books for years and needs to be changed.”

As it is currently written, the Innocent Persons Insurance Recovery Act will amend the Insurance Act to “limit the ability of insurance contracts to prevent recovery for loss or damage to property by certain innocent persons if the loss or damage was caused by an act or omission of another person.”

A new section of the Insurance Act will be added, stating:

118.1 (1) 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 prescribed class.

Lessons learned

If you are dealing with domestic violence in your marriage, take all necessary steps to protect your safety and the safety of your children. Once you do so, you can focus on your legal rights.

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