Invalid Claim

Insurance Act, R.S.O. 1990, c. I.8

Misrepresentation or violation of conditions renders claim invalid

233 (1) Where,

(a) an applicant for a contract,

(i) gives false particulars of the described automobile to be insured to the prejudice of the insurer, or

(ii) knowingly misrepresents or fails to disclose in the application any fact required to be stated therein;

(b) the insured contravenes a term of the contract or commits a fraud; or

(c) the insured wilfully makes a false statement in respect of a claim under the contract,

a claim by the insured is invalid and the right of the insured to recover indemnity is forfeited. R.S.O. 1990, c. I.8, s. 233 (1).

Statutory accident benefits protected

(2) Subsection (1) does not invalidate such statutory accident benefits as are set out in the Statutory Accident Benefits Schedule. R.S.O. 1990, c. I.8, s. 233 (2); 1993, c. 10, s. 1.

Use of application as defence

(3) No statement of the applicant shall be used in defence of a claim under the contract unless it is contained in the signed written application therefor or, where no signed written application is made, in the purported application, or part thereof, that is embodied in, endorsed upon or attached to the policy.

Idem

(4) No statement contained in a purported copy of the application, or part thereof, other than a statement describing the risk and the extent of the insurance, shall be used in defence of a claim under the contract unless the insurer proves that the applicant made the statement attributed to the applicant in the purported application, or part thereof.

Ghaffari v. Co-operators General Insurance Co., 1996 CanLII 8031 (ON SC)

The onus is upon an insurer to establish on a balance of probabilities that an insured is wilfully or recklessly exaggerating his or her loss as submitted in a proof of loss: Chlebak v. Royal Insurance Co. of Canada, 1975 CanLII 427 (ON SC), [1975] I.L.R. 1-683 (Ont. C.A.). In order to find someone guilty of fraud, the evidence should be clear and satisfactory: Glen Falls Insurance Co. v. Adams (1916), 1916 CanLII 636 (SCC), 54 S.C.R. 88, 32 D.L.R. 399.

(...)

Section 129 of the Insurance Act allows for relief against forfeiture where there is "imperfect compliance with a statutory condition as to the proof of loss". This provision has no application in a situation of fraudulent conduct: West v. Royal Insurance Co. of Canada (1986), 21 C.C.L.I. 53 at p. 59 (Ont. Dist. Ct.); Wigmore v. Canadian Surety Co. (1994), 1995 CanLII 66 (SCC), 27 C.C.L.I. (2d) 96, [1995] I.L.R. 1-3139 (Sask. Q.B.). However, where the insured's proof of loss contains an honest mistake, the court can resort to s. 129 in order to grant relief on the basis that the insured's proof of loss amounted to "imperfect compliance".