Four insurance companies reach tentative agreement on 1998 ice storm lawsuit

Four of the 19 insurance companies named in a class action lawsuit launched by consumer association Option consommateurs following the 1998 ice storm in Ontario and Quebec have agreed to pay $12.5 million, without admitting liability.

The tentative agreement was reached with Belair Insurance Company, Allianz Insurance Company of Canada, AXA Assurances and ING Insurance Company of Canada (Commerce Group).

The lawsuit seeks indemnity for consumers whose homes were uninhabitable during the ice storm and who had insurance policies that covered “additional living expense,” notes a statement from Option consommateurs, a not-for-profit association whose mission it is to promote and defend consumer rights. The $12.5 million could enable more than 200,000 individuals – who held an insurance policy with one of the four companies and who lived at the time in one of the 640 municipalities covered by the action – to receive indemnities of at least $50.92 each.

In a statement, Intact Financial Corporation confirmed its insurance subsidiaries operating in Quebec reached the tentative, out-of-court settlement with Option consommateurs. Details of the agreement will be set out in a notice explaining eligibility conditions and the rights of those consumers who are included.

Quebec’s Superior Court must approve the agreement and the lawsuit against the remaining 15 named companies is continuing.

The Insurance Bureau of Canada reported last year the ice storm that hit parts of Quebec and Ontario was the most expensive insured disaster in Canadian history. The $1.8 billion cost (figure adjusted for inflation) dwarves the $700 million preliminary estimate for insured damage, reported by Property Claim Services Canada in 2011, caused by wildfires that ravaged Slave Lake, Alta.

Intact notes that its subsidiaries paid out more than $350 million related to the 1998 ice storm.