Falsely reporting the value of a loss can void a claim for indemnity under an insurance policy

An Insured was denied indemnity for falsely reporting the value of the vehicle.

Gotsutsov. v. Insurance Corp. of British Columbia, [2009] B.C.J. No. 1011, May 12, 2009, British Columbia Provincial Court, H. Dhillon Prov. Ct. J.

An Insured sought indemnity for fire damage to his vehicle. The vehicle had been badly burnt and was considered a total loss by the Insurer. The Insurer refused to pay on the ground that the Insured had made a willfully false statement in respect to his claim. On his claim form, the Insured alleged that he had purchased the vehicle for $20,000 and had no major repairs since the purchase. In fact, the vehicle had been purchased for $15,000 and was rebuilt. The Insurer alleged that the Insured willfully misstated the purchase price and failed to disclose the vehicle’s repair history.

The Court found that the Insured’s statement about the purchase price was made intentionally and willfully with knowledge that it was not true. The reported purchase price of a motor vehicle in an insurance claim is a material fact which assists the insurer in investigating the claim and assessing the payout value of the vehicle. In the result, the Insured was entitled only to the salvage cost of the vehicle.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley.

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