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IBC recommends insurance company policy changes on ‘innocent co-insureds’ in Canada

Insurance Bureau of Canada's (IBC) Board of Directors is recommending that IBC's members operating in Ontario and the Atlantic provinces voluntarily align their home insurance policies with other jurisdictions when it comes to protecting 'innocent co-insureds'.

"A gap in insurance protection for some Canadians has recently been highlighted through media reports," said Don Forgeron, President and CEO, IBC. "These are tragic stories and insurers can take immediate action to close this gap. That is why IBC's Board of Directors, whose companies represent over 85% of direct written premiums in Canada, is recommending that all members providing home insurance in Ontario and Atlantic Canada voluntarily align their policies with other jurisdictions when it comes to offering coverage for innocent co-insureds. British Columbia, Alberta, Saskatchewan, Manitoba, and Quebec currently have protections in place. Those protections ought to be in place across the entire country."

Current legislation in British Columbia, Alberta, Saskatchewan, Manitoba, and Quebec requires that the insurer pay for the losses of an innocent co-insured's property caused by the deliberate action of another person insured on the policy. The amount paid out in these circumstances is determined by the innocent co-insured's proportional interest in the damaged property. Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland and Labrador do not have similar legislative protections in place.

By voluntarily agreeing to align policies in Ontario and Atlantic Canada with those in other jurisdictions consumers will gain an extra level of protection.

"Over the coming days and weeks, IBC will ask our members to agree to extend this protection to innocent co-insureds," added Forgeron. "The stories in the media on this issue are tragic. Canadians across the country should receive equitable treatment regardless of their province of residence. It is quite simply the right thing to do."