B.C. brokers hail Bill 6 proposal to eliminate difference between fire and multi-peril policies

The Insurance Brokers Association of B.C. (IBABC) is pleased that amendments to Bill 6, the Insurance Amendment Act, propose to eliminate an existing distinction between fire and multi-peril policies.
Now in first reading, Bill 6 was introduced into the B.C. legislature on Sept. 15, 2009.
Among other things, proposed amendments to Bill 6 include one set of provisions applicable to all property contracts, thereby avoiding the need to classify the insurance contract as a fire contract or a multi-peril contract.
“The new act better reflects modern multi-peril insurance policies available to consumers today,” IBABC president Lorne Perry says in a statement posted on the association’s Web site. “The old Insurance Act, which originated in the 1920s, dealt with fire separately from other perils.
“As insurance policies evolved to cover more risks, the courts found these parts of the act increasingly at odds with each other.”
In KP Pacific Holdings Ltd. vs. Guardian Insurance Co. of Canada and Churchland vs. Gore Mutual Insurance Co., the Supreme Court of Canada found in 2003 that an all-risk policy in the province “cannot be shoehorned into the part five fire insurance section without contrived reconstruction and anomalous consequences. It simply does not fit.”
The court went on to observe that province’s Insurance Act was “anachronistic” and in need of an overhaul.
The B.C. government first introduced Bill 40, which contained amendments to the Insurance Act, at the end of April 2008. One week later, it shelved Bill 40 to deal with other emerging priorities.
The amendments in Bill 6 are also designed to ensure that fire coverage includes fires resulting from any cause, except those that are specifically excluded by regulation.
“In addition to improved protection, this change will provide consumers with more consistency across insurers,” the B.C. finance ministry said in a statement.