Insurance Business Allstate offers settlement in tragic co-insured story

Allstate offers settlement in tragic co-insured story Despite initially denying her home insurance claim, Allstate has now offered Wendy Soczek a settlement claim following a CBC story detailing domestic abuse and highlighting the controversy of innocent coinsured laws.

According to the story, Soczek’s husband became paranoid about her fidelity following 32 years of marriage, sprayed her with gasoline and lit her on fire - a blaze that spread throughout the house. The attack left Soczek in a coma for nine weeks, as she underwent 30 surgeries. Her husband is awaiting trial for attempted murder.

However, because Soczek lives in Ontario, she and her husband are both – from an insurance perspective - deemed responsible for her husband’s criminal and intentional actions, despite the fact that her husband’s actions seared off part of Soczek’s face and nearly killed her. This is despite the fact that in other provinces the insurer would be bound by law to pay out to Soczek because of innocent coinsured laws according to Dr. Elizabeth Adjin-Tettey, a professor at the University of Victoria’s Faculty of Law.

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“The relationship between the insurer and insured is governed by the terms of the contract,” she explained. “Homeowner’s policies typically define the ‘insured’ as joint rather than several. This means their rights and responsibilities under the contract are joint and the conduct of one insured is attributable to the other, in this case application of the intentional/criminal injury exclusion clause, subject to legislative modifications as have occurred in jurisdictions like BC, Alberta and Manitoba.”

The incident is eerily similar to that of Terri-lynn Robison, reported on by CBC and Insurance Business, in which Robison’s husband burned down their co-insured home after Robison ended the marriage. It was also Allstate who turned down her homeowner’s claim, though they gave her $10,000 for repairs estimated at $160,000.

For now, Ontario homeowners who are victims of crimes by the people they’re coinsured with have no recompense according to John R. Singleton, managing partner at Singleton Urquhart LLP. 

“If you’re living in Ontario, depending on the wording of the insurance policy, the coinsured isn’t entitled to coverage if the other co-insured is guilty of that conduct, provided the other insured has an insurable interest in the subject matter of the claim,” Singleton said.

“In British Columbia the legislation has foreclosed that possibility and innocent insureds are protected by our insurance act. It varies across the country.”

But there is momentum behind bringing an innocent coinsured law to Ontario, Singleton said.

“Any new legislation that finds its way into the common law provinces usually finds its way into the others in time. Some take longer than others,” Singleton said.

“It takes time, but once somebody bites, the others usually bite also.”

Related stories:
Allstate denies woman’s claims after husband sets fire to bed
Ontario MPP proposes insurance recovery legislation