N.B. closing loophole allowing insurance companies to deny payouts to domestic violence victims

New Brunswick is moving to change its laws to stop insurance companies from denying payouts to victims of domestic abuse whose angry or vindictive spouses set fire to their shared family homes.

The province will be the first in Atlantic Canada to make the change, something also being considered in Ontario.

It comes in the wake of a CBC News investigation, which found dozens of cases across Canadawhere insurance companies denied claims from domestic violence victims, including one case where a woman was set on fire by her husband.

New Brunswick Finance Minister Cathy Rogers told CBC News thatdomestic violence victims are left vulnerable because of a loopholein the current legislation, wherethe law doesn't compelinsurance companies to protect theinnocent people who are co-insured on apolicy.

"Now with this, that exclusion clause will not be an out for the insurance companies," said Rogers.

The amendments to the Insurance Act are expected to be introducedon Wednesday. The changes are expected tocome into effect immediately after the bill's proclamation.

"Domestic violence does existand we just want to be able to have one more tool here, to be able to protect the innocent co-insureds," she said.

British Columbia, Alberta, Manitoba and Quebec already have similar laws, whereas Saskatchewan and Atlantic provinces have no such protections.

"We want to be proactive and join forces with those other provinces," said Rogers.

CBC News has found some major insurance companies already choose to pay innocent claimants regardless of provincial laws.

But some of the biggest insurance companies in the country have resisted extending coverage to co-insured victims of domestic violence.

Intact Insurance, which collects $8 billion in annual premiums on property insurance policies, told CBC News in April it paidout claims in these cases only in the provinces where it is mandatory.However, following CBC's investigation and discussions within the industry, they amended their policy.

In April, a Toronto MPPintroduced a private member's bill to close Ontario's loopholes and force insurers to pay out claims to innocent victims of arson or other property damage.Saskatchewan expects to have a law in place early next year.

A need for change

MichlePelletier,consumer advocate for insurance, has been pushing government for these changes since the CBCinvestigation.

"With this new amendment you won't be excluded if you're an innocent co-insured you're going to be able to receive your insurance money if something happens," said Pelletier.

She said theamendmentwill cover aninnocent co-insured and pay for their portion of theloss. Meanwhile, the individualwho caused damage to their homewon't get any money, she said.

Pelletier confirmed there is at least one ongoing case right now, where aco-insured has been the victim of property damage.

Rogers had no knowledge of this case.

"It doesn't happen that frequently," she said. "But when it does it's devastating for the innocentco-insured, they're left with nothing."

She saidmany things have been put in place for domestic violence victims recently, and this is just one more helpful piece of the puzzle.

Closing the gap

Earlier this year, the Insurance Bureau of Canada's (IBC) board of directorsrecommendedthat IBC's members operating in both Ontario and the Atlantic provinces "voluntarily align their home insurance policies with other jurisdictions when it comes to protecting innocent co-insureds."

"These are tragic stories and insurers can take immediate action to close this gap," saidDon Forgeron, IBC president and chief executive officer, in May.

Rogers said both the Insurance Bureau of Canadaand insurance companies have been supportive.

"So we're just following recommendations from good practices.It really is a win-win," she said.

New Brunswick's proposed amendments have been developed in partnership with the Office of the Consumer Advocate for Insurance, the Financial and Consumer Services Commission and the Women's Equality Branch.

"It's very positive move for innocent co-insureds in these situations," saidAngelaMazerolle, superintendent of insurance with the Financial and Consumer Services Commission in New Brunswick.

"Anything that can be done to protect the victims is a positive step."