Policies and Insurance Contracts - Coverage - Exclusions - Vacant - Material Change in Risk - Failure to Notify

Peebles v. The Wawanesa Mutual Insurance Company

Insured under home insurance policy is not required to give insurer notice of vacancy or reduced occupancy for a period of less than 30 days.

[2013] B.C.J. No. 2389

2013 BCCA 479

Supreme Court of British Columbia

Newbury J., Hall J. and Chiasson J.

November 1, 2013

The insurer denied coverage under a home insurance policy in respect to a fire that occurred within 30 days of the premises becoming "vacant". The insurance policy prohibited the premises from being "vacant" for 30 consecutive days and required the insured to notify the insurer of any material change in risk. The insured did not give notice of any change in risk.

The trial judge found that the premises were not "vacant" as defined in the policy but found that the insured was required to notify the insurer of reduced occupancy and therefore the insurer's denial of coverage was upheld. The insured appealed.

On appeal, the insured argued that the trial judge had failed to apply binding Supreme Court of Canada authority, Laurentian Insurance Co. v. Davidson, [1932] S.C.R. 491, which held that a statutory condition of insurance which protects an insurer from liability for loss or damage occurring when a building is "vacant or unoccupied for more than 30 consecutive days" means that vacancy for a period of up to 30 days is a risk contemplated by the policy. As a result, a second condition that requires an insured to give notice of any change material to the insurer's risk does not apply in respect to vacancy or reduced occupancy during this 30 day period. The Court of Appeal found that the trial judge ought to have applied Laurentian and allowed the appeal.