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INSURANCE ACT — Continued
[RSBC 1996] CHAPTER 226
119 This Part applies to insurers carrying on the business of fire insurance and to contracts of fire insurance, whether or not a contract includes insurance against other risks as well as the risks included in the expression "fire insurance" as defined by this Act, except
(a) contracts of insurance falling within the classes of aircraft, automobile, boiler and machinery, inland transportation, marine, plate glass, sprinkler leakage and theft insurance,
(b) if the subject matter of the contract of insurance is rents, charges or loss of profits,
(c) if the peril of fire is an incidental peril to the coverage provided, or
(d) if the subject matter of the insurance is property that is insured by an insurer or a group of insurers primarily as a nuclear risk under a policy covering against loss of or damage to the property resulting from nuclear reaction or nuclear radiation and from other perils.
120 (1) Every insurer that has a business authorization for fire insurance may, subject to its Act of incorporation and subject to the restrictions specified in the licence, insure or reinsure any property in which the insured has an insurable interest against loss or damage by fire, lightning or explosion, and may insure or reinsure the same property against loss or damage from falling aircraft, earthquake, wind storm, tornado, limited hail, sprinkler leakage, riot, malicious damage, weather, water damage, smoke damage, civil commotion and impact by vehicles, and any one or more perils falling within those other classes of insurance prescribed by the regulations.
(2) An insurer that has a business authorization for fire insurance may insure an automobile against loss or damage under a policy falling within this Part.
121 A contract may be renewed by the delivery of a renewal receipt, identifying the policy by number, date or otherwise or by a new premium note.
122 (1) Subject to subsection (4) of this section and to section 129 (a), in any contract to which this Part applies, the contract is deemed to cover the insured property
(a) against fire, whether resulting from explosion or otherwise, not occasioned by or happening through
(i) in the case of goods, their undergoing any process involving the application of heat,
(ii) riot, civil commotion, war, invasion, act of foreign enemy, hostilities, whether war be declared or not, civil war, rebellion, revolution, insurrection or military power,
(b) against lightning, but excluding destruction or loss to electrical devices or appliances caused by lightning or other electrical currents unless fire originates outside the article itself, and only for destruction or damage occurring from the fire, and
(c) against explosion, not occasioned by or happening through any of the perils specified in paragraph (a) (ii), of natural, coal or manufactured gas in a building not forming part of a gasworks, whether fire ensues from it or not.
(2) Unless a contract to which this Part applies otherwise specifically provides, it does not cover the insured property against loss or damage caused by contamination by radioactive material, directly or indirectly, resulting from fire, lightning or explosion within the meaning of subsection (1).
(3) If property insured under a contract covering that property at a specified location is necessarily removed to prevent loss or damage or further loss or damage to it, that part of the insurance under the contract that exceeds the amount of the insurer's liability for any loss incurred must, for 7 days only or for the unexpired term of the contract if less than 7 days, cover the property removed and any property remaining in the original location in the proportions which the value of the property in each of the respective locations bears to the value of the property in them all.
(4) Nothing in subsection (1) precludes an insurer giving more extended insurance against the perils mentioned, but in that case this Part does not apply to the extended insurance.
(5) An insurer that has a business authorization for fire insurance may include in its insurance contracts a clause or endorsement providing that, in the case of livestock insured against death or injury caused by fire or lightning, the word "lightning" is deemed to include other electrical currents.
123 Every policy must set out the following:
(a) the name and address of the insurer;
(b) the name of the insured;
(c) the name of the person or persons 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 date on which the insurance takes effect;
(h) the date it terminates or the method by which the latter is set or to be set.
124 After an application for insurance is made, if it is in writing, any policy sent to the insured is deemed to be intended to be in accordance with the terms of the application, unless the insurer points out in writing the particulars in which it differs from the application, in which case the insured may, within 2 weeks from the receipt of the notification, reject the policy.
125 (1) If the loss, if any, 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 policy to the prejudice of that person without notice to that person.
(2) The length of and manner of giving the notice under subsection (1) must be the same as notice of cancellation to the insured under the statutory conditions in the contract.
126 (1) The conditions set out in this section are deemed to be part of every contract in force in British Columbia, and must be printed on every policy with the heading "Statutory Conditions", and no variation or omission of or addition to any statutory condition is binding on the insured.
(2) In this section "policy" does not include interim receipts or binders.
STATUTORY CONDITIONS
1. If any person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance which is material to be made known to the insurer in order to enable it to judge of the risk to be undertaken, the contract is void as to any property in relation to which the misrepresentation or omission is material.
2. Unless otherwise specifically stated in the contract, the insurer is not liable for loss or damage to property owned by any person other than the insured, unless the interest of the insured in it is stated in the contract.
3. The insurer is liable for loss or damage occurring after an authorized assignment under the Bankruptcy Act or change of title by succession, by operation of law, or by death.
4. Any change material to the risk and within the control and knowledge of the insured avoids the contract as to the part affected by the change, unless the change is promptly notified in writing to the insurer or its local agent; and the insurer when so notified may return the unearned portion, if any, of the premium paid and cancel the contract, or may notify the insured in writing that, if the insured desires the contract to continue in force, the insured must, within 15 days of the receipt of the notice, pay to the insurer an additional premium; and in default of such payment the contract is no longer in force and the insurer must return the unearned portion, if any, of the premium paid.
5. (1) This 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 this contract is terminated by the insurer,
(a) the insurer must refund the excess of premium actually paid by the insured over the proportionate premium for the expired time, but, in no event, is the proportionate premium for the expired time to be less than any minimum retained premium specified, 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 this 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, but, in no event, must the short rate premium for the expired time be deemed to be less than any minimum retained premium specified.
(4) The refund may be made by money, postal or express company money order, or by cheque payable at par.
(5) The 15 days mentioned in clause (a) of subcondition (1) commences to run on the day following the receipt of the registered letter at the post office to which it is addressed.
6. (1) On the occurrence of any loss of or damage to the insured property, the insured must, if such loss or damage is covered by the contract, in addition to observing the requirements of conditions 9, 10 and 11,
(a) forthwith give notice of it in writing to the insurer,
(b) deliver as soon as practicable to the insurer a proof of loss verified by a statutory declaration,
(i) giving a complete inventory of the destroyed and damaged property and showing in detail quantities, costs, actual cash value and particulars of 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) showing the amount of other insurances and the names of other insurers,
(v) showing the interest of the insured and of all others in the property with particulars of all liens, encumbrances and other charges upon the property,
(vi) showing any changes in title, use, occupation, location, possession or exposures of the property since the issue of the contract, and
(vii) showing the place where the property insured was at the time of loss,
(c) if required give a complete inventory of undamaged property and showing in detail quantities, cost, actual cash value, and
(d) if required and if practicable, produce books of account, warehouse receipts and stock lists, and furnish invoices and other vouchers verified by statutory declaration, and furnish a copy of the written portion of any other contract.
(2) The evidence furnished under clauses (c) and (d) of subparagraph (1) of this condition must not be considered proofs of loss within the meaning of conditions 12 and 13.
7. Any fraud or wilfully false statement in a statutory declaration in relation to any of the above particulars vitiates the claim of the person making the declaration.
8. Notice of loss may be given, and proof of loss may be made, by the agent of the insured named in the contract in case of absence or inability of the insured to give the notice or make the proof, and absence or inability being satisfactorily accounted for, or in the like case, or if the insured refuses to do so, by a person to whom any part of the insurance money is payable.
9. (1) The insured, in the event of any loss or damage to any property insured under the contract, must take all reasonable steps to prevent further damage to any such property so damaged and to prevent damage to other property insured under this contract including, if necessary, its removal to prevent damage or further damage to it.
(2) The insurer must contribute proportionately towards any reasonable and proper expenses in connection with steps taken by the insured and required under subparagraph (1) of this condition according to the respective interests of the parties.
10. After any loss or damage to insured property, the insurer has an immediate right of access and entry by accredited agents sufficient to enable them to survey and examine the property, and to make an estimate of the loss or damage, and, after the insured has secured the property, a further right of access and entry sufficient to enable them to make appraisement or particular estimate of the loss or damage, but the insurer is not entitled to the control or possession of the insured property, and without the consent of the insurer there can be no abandonment to it of insured property.
11. In the event of disagreement as to the value of the property insured, the property saved, or the amount of the loss, those questions must be determined by appraisal as provided under the Insurance Act before there can be any recovery under this contract, whether the right to recover on the contract is disputed or not, and independently of all other questions; but there is no right to an appraisal until a specific demand for it is made in writing and until after proof of loss has been delivered.
12. The loss is payable within 60 days after completion of the proof of loss, unless the contract provides for a shorter period.
13. (1) The insurer, instead of making payment, may repair, rebuild, or replace the property damaged or lost, giving written notice of its intention so to do within 30 days after receipt of the proofs of loss.
(2) In that event the insurer must commence to so repair, rebuild, or replace the property within 45 days after receipt of the proofs of loss, and after that must proceed with all due diligence to the completion of the repair, rebuilding or replacement.
14. Every action or proceeding against the insurer for the recovery of any claim under or by virtue of this contract is absolutely barred unless commenced within one year next after the loss or damage occurs.
15. (1) Any 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 British Columbia.
(2) Written notice may be given to the insured named in this contract by letter personally delivered to the insured or by registered mail addressed to the insured at the insured's latest post office address as notified to the insurer, and in this condition the expression "registered" means registered in or outside Canada.
127 (1) If, on the happening of any loss or damage to property insured, there is in force more than one contract covering the same interest, the insurers under the respective contracts are each liable to the insured for its 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 of it that the policy must not cover, come into force, attach, or become insurance with respect to the property until after full or partial payment of any loss under any other policy.
(3) Nothing in subsection (1) affects the validity of any divisions of the sum insured into separate items, or any limits of insurance on specified property, or any paragraph referred to in section 128, or any contract condition limiting or prohibiting the having or placing of other insurance.
(4) Nothing in subsection (1) affects the operation of any deductible clause, and
(a) if one contract contains a deductible, 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, the prorated proportion of the insurers under those contracts must be first ascertained without regard to the deductible clauses, and then the highest deductible must be pro rated among the insurers with deductibles, and these pro rated amounts must 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.
128 A contract containing
(a) a deductible clause;
(b) a coinsurance, average or similar clause, or
(c) a clause limiting recovery by the insured to a specified percentage of the value of any property insured at the time of loss, whether or not that clause is conditional or unconditional,
must have printed or stamped on its face in bold type lettering at least 12 points in size 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.
129 If a contract
(a) excludes any loss that would otherwise fall within the coverage prescribed by section 122, or
(b) contains any stipulation, condition or warranty that is or may be material to the risk, including, but not restricted to, a provision in respect to the use, condition, location or maintenance of the insured property,
the exclusion, stipulation, condition or warranty 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.
130 (1) The insurer, on making any payment or assuming liability therefor under a contract of fire insurance is subrogated to all rights of recovery of the insured against any person, and may bring 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.
131 (1) In this section the expression "agent" means an insurance agent licensed under Division 2 of Part 6 of the Financial Institutions Act and authorized by a licensed insurer on its behalf to solicit and receive applications for insurance and to collect premiums, and whose compensation or profit from them consists wholly of a commission on premiums derived from such business.
(2) The commission on any policy issued at the head office of an insurer in British Columbia must be paid to an agent, and there must be written on the policy the words "Issued on behalf of ________________, resident authorized agent at ________________", with the name of the agent and of the place where the agent carries on business.
(3) The person in charge of the head office of an insurer in British Columbia must at once, on the issue of a policy at the head office, notify the agent of the date of the policy, the name of the insured and the property insured.
(4) This section does not apply to a mutual company, or to a contract of reinsurance, or to a contract insuring property in transit which is in the possession or custody of a railway company or common carrier, or insuring movable property owned by a railway company or other common carrier and used in the course of its business as such.
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Copyright (c) 2001: Queen’s Printer, Victoria, British Columbia, Canada