In the past insurance companies have refused to pay co-insureds if their home is deliberately burned down or damaged by their spouse. This is to avoid insurance fraud but it can leave an innocent spouse in jeopardy.
It can be a real problem if a vindictive spouse burns down the family home or if one spouse is suffering from depression and commits suicide by burning down the family home. The innocent co-owner will be harmed and may receive no compensation from the insurance company.
At present there are now six provinces in Canada that have legislation that requires the insurer to pay for the losses of an innocent co-insured’s property. British Columbia is one of them.
The government of Canada is also passing the Innocent Persons Insurance Recovery Act, 2017 to ensure that no one falls through the cracks.
Deborah A. Todd