Misrepresentation About Prior Non-Renewal & Concealment of Prior Claims Can Void Coverage

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After a summary trial, the appellant, BCAA Insurance Corporation (“BCAA”), was found liable under a homeowner’s policy it issued to the respondents, who are common-law spouses, to indemnify them for the complete loss by fire of their house and its contents on Mayne Island, BC. BCAA issued the policy on March 8, 2016. The fire occurred on December 4, 2016. In Nagy v. BCAA Insurance Corporation, Court of Appeal For British Columbia, Docket: CA462032020 BCCA 270, October 7, 2020 the insurer effectively challenged an order by the judge finding it liable under an insurance policy issued to the respondents.

ZALMA OPINION

Due to a statute that limited the Marine rule first stated by Lord Mansfield in Carter v Boehm that established the rule of utmost good faith in insurance transactions. The misrepresentation was obvious while the concealment of the two prior losses was visible, but could not be proved to be fraudulent.  Canada requires omissions to be fraudulent but does not require the same for misrepresentations.