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Read Your insurance Policy
Published in the March 2006 issue of Litigation Notes - View Article
The Hazan family made a claim under their insurance policy for damage caused to their home by flooding damage resulting from a burst pipe. Their insurer, ING Insurance Company of Canada (“ING”) denied coverage because the policy required either that the premises be inspected daily, or that the water pipes be drained and shut off, or that the premises be monitored by an alarm station twenty-four hours a day. ING moved for summary judgment to dismiss the Hazans’ claim on the basis that they had failed to do any of those things.
The Hazans stated that they never received the policy booklet containing the policy wording and hence were not aware of the exclusions. ING claimed that it most certainly would have been mailed to them. In a decision released on March 7, 2006, the Superior Court of Justice of Ontario held that this was a credibility issue, which would have to be decided after all of the evidence had been heard at trial.
However, ING made an alternative submission, which was to the effect that the Hazans had received renewal receipts which incorporated the policy’s terms and conditions by reference. The Hazans could have made themselves aware of the exclusions if they had taken care to read the original policy. However there was no evidence that they had received the original policy either.
The Court reviewed Canadian caselaw dealing with issuance and delivery of insurance policies. Some cases have held that it is sufficient that the policy contain the terms and conditions when issued and that reference to the policy in other documents provided to the insured would constitute sufficient notice of the terms and conditions. However, the Court in this case states that “…where an insurer takes no steps to deliver a copy of the policy to the insured, it seems illogical that the insurer can rely on exclusions in the policy, merely by referring to the document in subsequent communications to the insured.”
The Court went on the conclude that ING’s alternative submission is the subject of considerable debate in Canadian jurisprudence and that the results are dictated by varying fact situations. As a result, the Court considered that the matter should be decided on the basis of a full evidentiary foundation and sent the matter on to trial.
Hazan v ING Insurance Company of Canada, 2006 CanLII 6576