Theft/Fire Loss Claims and ICBC "Examinations Under Oath"
If you purchase Theft of Fire Damage coverage from ICBC and need to take advantage of this insurance can ICBC force you to provide a statement under oath before processing your claim? The answer is yes and reasons for judgement were released this week by the BC Supreme Court, Nelson Registry, dealing with this area of the law.
In this week’s case (Cort v. ICBC) the Plaintiff had fire insurance coverage with ICBC. On September 18, 2010 his vehicle was destroyed by fire. He asked ICBC to pay his loss but ICBC refused to respond until he provided them with an “Examination Under Oath“. He refused to do so and sued ICBC. ICBC brought an application for various pre-trial relief including an order to ‘stay‘ the lawsuit until the Examination Under Oath was provided. Master Keighley granted this order finding that the lawsuit could not move ahead until this ‘investigative’ step took place. In doing so the Court provided the following reasons:
[28] Sections 6 and 8 of the Prescribed Conditions to the Insurance (Vehicle) Regulation B.C. Reg. 156/2010 read as follows:
6(1) If required by the insurer, the insured must, on the occurrence of loss or damage for which coverage is provided by this contract, deliver to the insurer within 90 days after the occurrence of the loss or damage a statutory declaration stating, to the best of the insured’s knowledge and belief, the place, time, cause and amount of the loss or damage, the interest of the insured and of all others in the vehicle, the encumbrances on the vehicle, all other insurance, whether valid or not, covering the vehicle and that the loss or damage did not occur through any wilful act or neglect, procurement, means or connivance of the insured.
(2) An insured who has filed a statutory declaration must
(a) on request of the insurer, submit to examination under oath,
(b) produce for examination, at a reasonable time and place designated by the insurer, all documents in the insured’s possession or control relating to the loss or damage, and
(c) permit copies of the documents to be made by the insurer.
8(1) The insurer must pay the insurance money for which it is liable under this contract within 60 days after the proof of loss or statutory declaration has been received by it or, if an arbitration is conducted under section 177 of the Insurance (Vehicle) Regulation, within 15 days after the award is rendered.
(2) The insured must not bring an action to recover the amount of a claim under this contract unless the requirements of conditions 4, 5 and 6 are complied with and until the amount of the loss has been ascertained by an arbitrator under section 177, by a judgment after trial of the issue or by written agreement between the insurer and the insured.
(3) Every action or proceeding against the insurer in respect of loss or damage for which coverage is provided under this contract must be commenced within 2 years from the occurrence of the loss or damage.
[29] Accordingly, says ICBC, since the insured may not commence an action to recover the amount of his claim until he has, inter alia, submitted to an examination under oath, at the very least he should be enjoined from proceeding with the claim…
[32] ….The purpose of an EUO, on the other hand is investigative. The insured is contractually bound to co-operate with his insurer by submitting to an examination which may assist the insurer in determining its response to the claim. The insured may not, as a matter of contract, seek to attach conditions to his attendance.
[33] In the circumstances the contract claim will be stayed until the plaintiff has complied with the requirements of the Prescribed Conditions. In the event that the parties cannot resolve the issue of compliance by agreement, they will have liberty to apply.
This case is also worth reviewing for the Court’s discussion of transfer of claims to Small Claims Court under section 15 of the Supreme Court Act and further the severance of bad faith claims from breach of contract claims pursuant to Rule 22-5(6) and 12-5(67) of the Supreme Court Rules.