You are here

Limitation periods that apply to British Columbia insurance claims

A limitation period is a deadline by which a court action must be started. Failing to commence a court action before a limitation period is generally prevents any claim from continuing. The purpose of limitation periods are to bring finality to the threat of litigation:
 
In Novak v. Bond, 1999 CanLII 685 (SCC) McLachlin J., as she then was, for a majority of the Supreme Court of Canada, explained at para. 67 that limitations statutes:
 
... are intended to: (1) define a time at which potential defendants may be free of ancient obligations, (2) prevent the bringing of claims where the evidence may have been lost to the passage of time, (3) provide an incentive for plaintiffs to bring suits in a timely fashion, and (4) account for the plaintiff's own circumstances, as assessed through a subjective/objective lens, when assessing whether a claim should be barred by the passage of time.  To the extent they are reflected in the particular words and structure of the statute in question, the best interpretation of a limitations statute seeks to give effect to each of these characteristics.
 
(Yaremy v. Insurance Corporation of British Columbia, 2010 BCCA 418 at para. 11 per Hinkson J.A., dissenting).
 
The Limitation Act, SBC 2012, c. 13 is the legislation that specifies limitation periods for British Columbia, but limitation periods are also specified in other legislation as well so one cannot rely only on the Limitation Act, SBC 2012, c. 13. Indeed the Insurance Act, SBC 2012, c. 1 itself specifies limitation periods that apply to insurance claims, and provides as follows:
 
(1) An action or proceeding against an insurer in relation to a contract must be commenced,
(a) in the case of loss or damage to insured property, not later than 2 years after the date the insured knew or ought to have known the loss or damage occurred, and
(b) in any other case, not later than 2 years after the date the cause of action against the insurer arose.
(2) An action must not be brought for the recovery of money payable under a contract of insurance until the expiration of 60 days after proof, in accordance with the contract
(a) of the loss, or
(b) of the happening of the event on which the insurance money is to become payable,
or of such shorter period as may be set by the contract of insurance.
(Insurance Act, SBC 2012, c. 1, s. 23).
 
The two year clock to file a court action does not start ticking for minors until they reach the age of majority i.e. s. 6(1) of the Insurance Act provides that the postponement provisions for minors and incapable persons the Limitation Act apply to claims under the Insurance Act:
 
Sections 18 to 20 [minors and incapable persons], 25 and 26 [claimant becomes person under disability] of the Limitation Act apply to a limitation period established under this Act in respect of an action or proceeding on a contract as if the limitation period were established under the Limitation Act.
(Insurance Act, SBC 2012, c. 1, s. 6(1)).
 
However, special notice can be provided by the insurer to the insured which does immediately after issuance of the notice start the clock ticking for minors and disabled persons so care should be taken before concluding that the time has not started running simply because, for example, a minor had not yet reached the age of majority. It is safest to simply assume a two year limitation period from the date of first discovery of the claim, and seek legal advice if issues of postponement are being considered. 
 
Section 6(1) of the Insurance Act provides that the statutory limitation periods may be lengthened, but not shortened, by contract:
 
A limitation period established under this Act in respect of an action or proceeding on a contract may be varied by a contract to provide a longer period.
(Insurance Act, SBC 2012, c. 1, s. 6(2)).
 
See also s. 3 of the Insurance Act which states that insurers cannot contract out of the requirements of the Insurance Act:
 
An insurer must not make a contract that is inconsistent with this Act.
(Insurance Act, SBC 2012, c. 1, s. 3(1)).
 
See also s. 29(1) of the Insurance Act which states that an insurer cannot modify the statutory conditions that apply to contracts governed by Part 2 of the Insurance Act.

 

 
This book was written by Michael Dew, a Vancouver lawyer who practices civil litigation, including representing persons who have been denied coverage under property insurance policies, or liability insurance policies. If you have been denied insurance coverage and require assistance with making a claim against your insurer call Michael at 604 895 3160.