Life Insurance Proceeds and Suicide

Marcoux v. Halifax Fire Insurance Co

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  Insured was required to “promptly” notify the insurer of any accident involving bodily injury
  
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    Hit someone with his truck, victim insisted he was okay
    
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    Insured did not give notice of the accident until 2 months later when the pedestrian sought damages
    
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  SCC: the notice obligation must be interpreted in the context of the circumstances surrounding the loss
  
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    Objective/subjective test: apply the standard of a reasonable person in the position of the insured
    
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      Found that in this case a reasonable person would have concluded that bodily injury had probably been suffered at the time of the accident
      
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    The good intentions of the insured are irrelevant in determining whether the duty to report a loss has been triggered- insured’s good faith is irrelevant
    
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  Consequences of breach: claim forfeited
  
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    Contract remains valid
    
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    No forfeiture absent prejudice to insurer: Bissett v ICBC- timely notification by 3^rd party, insurer was not prejudiced because it was aware of the plaintiff’s claim and had the opportunity to investigate
    

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  A proof of loss clause makes the insured’s obligation to prove a loss a condition precedent for recovery- failure to comply results in forfeiture of the right to recover for the loss in question, but contract itself remains valid
  
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  sufficient evidence of occurrence and value of loss required within specified time
  
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  time limit and sufficiency of information contextual
  
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  Dimana v. Pilot Insurance: burden of proof rests on the insured to establish a right to recover under the terms of the policy- must establish on a BoP that:
  
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    a valid insurance policy exists
    
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    a loss has occurred
    
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    the loss occurred during the time period covered by the policies
    
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    the loss falls within the coverage of the policy
    
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    the amount of the loss
    
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  obligations to provide notice of loss and proof of loss are distinct and separate acts designed to serve different purposes- proof of loss may amount to notice, but notice is not proof
  
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    notice of loss clauses typically require only written notice, but proof of loss clauses commonly require the insured to verify information via statutory declaration
    
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  court must determine:
  
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    whether the insured provided proof of loss within the required time frame
    
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      evaluated as a question of fact given the specific circumstances in the case at bar
      
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    whether the information provided by the insured was sufficient to satisfy the proof of loss requirement
    
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      based on a standard of reasonableness- insured is required to provide information about the loss in his/her possession or which can reasonably be obtained by the insured, and which might reasonably be expected by the insurer in order to usefully evaluate the insurance claim
      
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  Nixon v. Queen Insurance: proof of loss clause was not satisfied where the insured, who did not have personal knowledge about all the store inventory destroyed by a fire, failed to make inquiries of his clerk and bookkeeper who could have provided this information
  
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  Anglo-American Fire Insurance Co. v. Hendry: proof of loss obligation was fulfilled when the insured provided the insurer with copies of the last stock-taking records predating the fire, and copies of invoices for goods purchased since that stock-taking
  
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  BCIA s. 29 statutory condition 6(b) requires proof of loss verified by statutory declaration:
  
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    (i) giving a complete inventory of that property and showing in detail quantities and cost of that property and particulars of the amount of loss claimed,
    
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    (ii) stating when and how the loss occurred, and if caused by fire or explosion due to ignition, how the fire or explosion originated, so far as the insured knows or believes,
    
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    (iii) stating that the loss did not occur through any wilful act or neglect or the procurement, means or connivance of the insured,
    
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    (iv) stating the amount of other insurances and the names of other insurers,
    
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    (v) stating the interest of the insured and of all others in that property with particulars of all liens, encumbrances and other charges on that property,
    
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    (vi) stating any changes in title, use, occupation, location, possession or exposure of the property since the contract was issued, and
    
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    (vii) stating the place where the insured property was at the time of loss
    
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  BCIA s. 101 Statutory condition 5(1)(b)- insured must:
  
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    (b) within 90 days after the date a claim arises under the contract on account of an accident, sickness or disability, furnish to the insurer such proof, as is reasonably possible in the circumstances, of
    
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      (i) the happening of the accident or the start of the sickness or disability,
      
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      (ii) the loss caused by the accident, sickness or disability,
      
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      (iii) the right of the claimant to receive payment,
      
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      (iv) the claimant's age, and
      
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      (v) if relevant, the beneficiary's age
      

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  may include other elements than the obligations to provide notice and proof of loss
  
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  takes on a particular meaning in the context of liability insurance:
  
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    vital that the insurer has the insured’s assistance and cooperation both in conducting a proper defence of the claim and in concluding a settlement on advantageous terms
    
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    modern liability policies typically include express provisions prohibiting the insured from assuming liability for any claim brought against the insured by a third party, and imposing a general duty on the insured to cooperate with the insurer in the defence of any action
    
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      an insured’s breach of this duty entitles the insurer to refuse to defend or indemnify the insured
      
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  generally defined as obliging an insured to assist willingly and to the best of his judgment and ability
  
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    conduct must be material and substantial in order to constitute a breach
    
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    some examples of breach:
    
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      failure to respond to letters and other communication by the insurer seeking additional information
      
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      insured investigated and settled a claim brought against him without involving the insurance company
      
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      insured failed to keep the insurer informed about the status of the lawsuit and various offers made to settle by the third party claimant
      
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      insured intentionally failed to attend hearings, provide evidence or assist in obtaining witnesses
      
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      insured promoted the action brought against him by a third party claimant
      
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      insured lied to the insurer about the circumstances of the accident for the first two or three months following the accident
      
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  liability insurance
  
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    insured not to assume liability in 3^rd party action- this prejudices the insurer’s interest
    
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    insured must assist insurer in defending 3^rd party claim, provide necessary information for settlement
    

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  under common law, insured’s fraud in advancing a claim entitles the insurer to avoid all obligations under the contract
  
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    by committing fraud, the insured forfeits all benefits under the policy
    
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    this may be modified by the terms of the contract and has been tempered by statutory provisions
    
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      provincial fire and car insurance provisions typically provide that fraud by the insured with respect to a claim forfeits the insured’s right to recover for that claim, even if the amount of the fraudulent claim is small
      
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  an insured commits fraud in advancing a claim where the insured makes false representations to the insurer either knowingly, recklessly, or without an honest belief in the truth of those representations
  
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  burden of proving fraud lies on the insurer- heavy burden because of the serious nature of the allegation
  
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    higher degree of probability than establishing negligence- higher than BoP, but not as high as beyond reasonable doubt
    
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    must provide proof of actual fraud- cannot be assumed from omitted or inaccurate information
    
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    where the insured makes a gross misrepresentation/overvaluation, a presumption of fraud arises which can only be rebutted by a finding that the insured was honestly mistaken
    
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    insurer must prove that fraud was material- capable of misleading the insurer by affecting the insurer’s management or payment of the claim
    
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    inadvertence, omission or mistake not sufficient evidence of fraud
    
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  consequences of a finding of fraud
  
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    common law: claim forfeited and contract voidable by insurer- insurer retains premiums
    
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    statutory modification: claim forfeited; contract valid (general, s. 29 statutory condition 7; BCI(V)A s. 75)
    
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      insurer may exercise unilateral termination
      
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    amount of fraudulent claim irrelevant; irrelevant claim may exceed policy limit
    
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    stays on your record and is material information for subsequent insurance applications- failure to disclose previous forfeitures due to fraud would be a breach of the disclosure duty
    
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    no relief against forfeiture due to fraud (Swan Hills)
    
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      if the breach is imperfect compliance, can grant relief, but not for fraud
      
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  punitive damages: ICBC v. AkersI (BCSC 2009)
  
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    vehicle was not being driven by insured- he was drunk and allowed his unlicensed friend to drive, but pretended that he was the one driving when there was an accident
    
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    claim was forfeited and punitive damages were assessed against all of the passengers ($500 each) and also against the insured ($5,000 because he was lying to obtain a financial gain)
    

Swan Hills v. Royal General Insurance (ABCA 1977)

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  Swan Hills operated a hardware store and lumber business, owned the building which housed the hardware store
  
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  Royal General insured the building against fire loss to a maximum of $29,000, and against fire loss to the building contents to a maximum of $30,000
  
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  In completing proof of loss following a fire, an officer of Swan Hills falsely listed three TV sets, a lumber shed and a metal shed amongst the items damaged in the fire
  
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    This was fraud, and was material despite the fact that the amount of the insurance contents claim exceeded coverage limits even without the addition of the fraudulently claimed losses
    
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    Court rejected officer’s suggestion that he understood the purpose of the proof of loss to be a negotiating position only
    
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    The claim for both building and contents coverage was vitiated despite the fact that the fraud related to the contents only
    

Directory: outlines
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outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11

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