The appellant, in this car fire loss claim(Swailes v. Insurance Corporation of British Columbia, 2011 BCCA 95), leased a new Chevrolet Corvette automobile. He insured it under a comprehensive policy with the Insurance Corporation of British Columbia (ICBC). The vehicle was subsequently destroyed by fire. ICBC denied coverage under the policy, and the claimant sued ICBC for indemnity and replacement costs of the vehicle. Following a three day trial, a Supreme Court judge ordered the claim dismissed. The claimant brings this appeal from that order.
ICBC called Mr. Andy Bowman who was presented and accepted by the trial judge as an expert qualified to give opinion evidence about the investigation and determination of the cause and origin of fires, including car fires. The claimant filed documents establishing the ownership, lease, and insurance on the vehicle, proof of loss claimed at $112,000, and payment by ICBC to the lessor/owner in the amount of $69,586.99. The Court of Appeal found that the trial judge was wrong in interpreting the legislation too narrowly. The policy of insurance covering the vehicle at the relevant time was governed by the terms of the Insurance (Vehicle) Regulation, B.C. Reg. 447/83 . Section 1 of the Regulation defined “comprehensive coverage” in this manner:
“comprehensive coverage” means coverage for loss or damage other than loss or damage to which collision coverage applies and includes coverage for loss or damage caused by missiles, falling or flying objects, lightening, fire, theft or attempted theft, earthquake, windstorm, hail, rising water, malicious mischief, riot or civil commotion or the stranding, sinking, burning, derailment, upset or collision of a conveyance in or on which a vehicle is being transported on land or water, vandalism and impact with a domestic wild animal, either living or dead;
Section 132(1) of the Regulation, which is the focus of the parties’ dispute, stated:
The corporation is not liable to indemnify any person under comprehensive or collision coverage for loss or damage
(a) to tires,
(b) consisting of, or caused by, mechanical fracture, failure or breakdown of any part of a motor vehicle, or
(c) caused by
(i) explosion within the combustion chamber,
(ii) rust,
(iii) corrosion,
(iv) freezing, or
(v) wear and tear,
unless the loss or damage is coincidental with other loss or damage for which indemnity is provided under comprehensive or collision coverage or is caused by fire, theft or malicious mischief.”
As the Court of Appeal stated, “While the provision is clumsily worded, its meaning is clear. If the loss or damage was caused by mechanical fracture, failure or breakdown the exclusion will ordinarily apply, unless that loss or damage was caused by fire. Here, while the trial judge found the broken axle caused the fire, the exception permits fire to supercede that finding as to cause and allows Mr. Swailes[the claimant] to recover indemnity for loss of the vehicle due to fire.”
The claimant was successful against ICBC and the insurance company was required to pay for the loss under the insurance policy. Posted by Mr. Renn A. Holness
