No backdating of insurance policy unless clearly intended by the parties: court

The B.C. Supreme Court has dismissed an insurance policy claim which was purchased three hours after the vehicular accident intended to be covered by the policy had occurred.

In 1015581 BC LTD. v. Chilliwack Insurance Agencies Ltd.,2022 BCSC 100, the plaintiff was in the business of hauling logs by trucks, which were insured by the Insurance Corporation of British Columbia (ICBC). The policy covered the logging trucks’ operations in Fraser Valley, Pemberton and Hope with a maximum travel distance of 160 kilometres.

The plaintiff applied to purchase an additional temporary insurance policy to accommodate travel beyond the distance allowed by the original policy. The transaction was completed at 1:48 p.m., as indicated by the “Transaction Timestamp” on the insurance certificate. However, three hours before the actual purchase of the policy and while the application was pending at the insurer’s office, the plaintiff’s truck was involved in an accident while hauling logs from Williams Lake to Chilliwack.

ICBC denied the plaintiff’s insurance claim, arguing that the policy was not effective at the time of the crash. On the other hand, the plaintiff asserted that the policy took effect from the beginning of the day upon which it was purchased.

The court said that under s. 40 of the Insurance (Vehicle) Act, the effectivity of insurance coverage begins to run from the time and date of validation indicated on the policy certificate, or at the beginning of the day on the date of effectivity specified in the certificate. The court also emphasized that an insurance policy is effective from the time it was issued unless the parties agree to backdate coverage to an earlier time.

In this case, the court found that the plaintiff’s insurance certificate did not expressly refer to a “time and date of validation.” Nonetheless, the “Transaction Timestamp” on the certificate specified when the policy was purchased, which was after the accident had taken place. In addition, the court failed to find any evidence suggesting that the parties intended to backdate the policy’s coverage.

Even if the plaintiff paid a full day’s premium, the court said, “there is nothing that takes this policy outside of the basic principle that a contract of insurance is effective from the time it is issued, unless a contrary intention can be found.” The court upheld the time indicated in the transaction timestamp and ruled that the policy was not yet effective when the accident occurred.