It could dramatically change personal insurance in Ontario and shift the national dynamic to a policyholder-friendly regulatory environment - and now it has the backing of the Ontario brokers’ association.
A bill is in front of the Ontario legislature to amend the province’s Insurance Act and compel insurers to pay out to innocent coinsureds should the other coinsured commit an illegal or intentional act.
The Insurance Brokers Association of Ontario (IBAO) is in favour of forcing insurers to pay claims to the innocent coinsured, said Colin Simpson, CEO of the IBAO. He believes insurers are worried about opening a “Pandora’s box” of claims, which is why the insurance industry hasn’t come up with its own solution.
“We support his bill, there are things that can be done by the insurance companies, but these things take time and for the people involved (innocent coinsureds) time is not on their side,” he explained. “From an insurance market perspective, brokers are here to help, but companies like Allstate are direct and don’t have that intermediary that advocates for the consumer.”
Pressure has been mounting on insurers and the government following CBC investigations uncovering instances of domestic abuse where husbands have burned properties and their wives, the victims, have been denied home insurance claims by Allstate.
The innocent coinsured bill before the Ontario legislature would require insurers to pay an innocent policyholder their half or share of the policy, regardless of the illegal or intentional actions of the guilty coinsured.
“If the claimant is innocent then for sure, the policies or regulations could protect against fraud. The reason they (insurers) don’t step up is because of how many potential claims there could be out there, claims they have not priced for," Simpson said.
“The brokers can not only represent what is in the policy, they can also go to the company and advocate on behalf of the claimant.”
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