A notice of health hazard constitutes a material change of risk and must be reported to an insurer

The Insured’s failure to give his insurer notice of a Notice of Health Hazard entitled the insurer to deny coverage on the basis that there was a material change in the insurer’s risk.

Mah v. Wawanesa Mutual Insurance Co., [2012] A.J. No. 981, September 19, 2012, Alberta Court of Queen’s Bench, T.D. Clackson J.

The insured was denied coverage following a number of fires in a residence owned by the insured and insured with the insurer. The insurer denied coverage on the basis that the insured had failed to notify the insurer that the City of Edmonton had issued an order requiring the insured to clean up the garbage, miscellaneous items and debris, and a further Notice of Health Hazard which declared the residence unfit for human habitation. This notice was registered against the property’s title, sent by registered mail to the insured’s post office box, and a laminated two page notice was posted on the door of the residence.

The insured brought an action against the insurer. The issues were whether the insured had notice of the Notice and whether the unfitness notice was a material change in the insurer’s risk. The Court found that the insured had received the notice and that the unfitness notice was a material change in the risk to the insurer. Accordingly, the insured’s claim against the insurer was dismissed.

This case was originally summarized by Cameron B. Elder and originally edited by David W. Pilley of Harper Grey LLP.

To stay current with the new case law and emerging legal issues in this area, subscribe here.