Appraisals Under B.C.?s Insurance Act: Practice and Procedure


In 1994, British Columbia?s Insurance Act was revised to provide for a mandatory appraisal procedure in cases of certain quantum disagreements between insurers and insureds. Over the past 14 years the appraisal process has become an important mechanism for resolving many disagreements between insurer and insured, largely due the efficiency and cost-effectiveness it provides.

On April 30, 2008, the B.C. government introduced Bill 40, the Insurance Amendment Act, 2008, a 91-page document that will substantially change a number of key rules in B.C. insurance law. The proposed amendments, representing the first substantive revision to the Insurance Act since the 1960s, seek to harmonize the act with contemporary insurance practices in B.C. and across Canada.

Presently, the Insurance Act carefully regulates key insurance contracts entered into by consumers (fire, life, accident & sickness, and automobile) while adopting a "hands-off" approach to general insurance typically negotiated by commercial parties of more equal bargaining strength. This approach is somewhat inconsistent with the multi-peril policies offered by insurers in today?s market. Hence, the Bill 40 amendments, if passed in proposed form, will result in a softening of this distinction and extension of the consumer protection provisions into a broader variety of general insurance areas.

Enactment of Bill 40 will also see a revision of the Part 5 appraisal process into a dispute resolution process of broader application. For the assistance of those currently involved in the appraisal process, this paper will briefly review the current appraisal process and the proposed dispute resolution process under Bill 40.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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