How do the new laws on co-ownership insurance affect you?
Bill 141 has been quite the talking point lately! Here are the answers to some of your questions…
Co-ownership syndicates have recently had to adapt to new regulations that are not in their favour regarding co-ownership insurance. In fact, henceforth, they must set up a self-insurance fund to cover insurance deductibles. This fund must be liquid and available at short notice.
In addition, when a co-owner is responsible for a loss or for an insurance claim, the syndicate of the co-ownership will no longer be able to collect the deductible or the cost of the repairs to the person at fault (a co-owner or resident of their home).
The issue is that some insurance companies refuse to cover the cost when a co-owner is responsible or affected when the claim could be covered by the self-insurance fund since it is a a small amount. Other companies justify their decision by saying that the syndicates should take responsibility for private portions.
Other issues have arisen. According to some players in the co-ownership industry, the costs of insurance premiums have increased since this new bill. These players are disappointed, as they were not consulted prior to the implementation.
Legal experts have suggested that the new bills were ambiguous and contradictory. Should the government revisit them? Will it lead to changes in favour of co-ownership syndicates?
Here are the new regulations:
” 1074.1 When a loss occurs which falls under the coverage provided for by a property insurance contract entered into by the syndicate and the syndicate decides not to avail itself of the insurance, it shall with dispatch see that the damage caused to the insured property is repaired.
A syndicate that does not avail itself of insurance may not sue the following persons for the damages for which it would otherwise have been indemnified by the insurance:
- a co-owner;
- a person who is a member of a co-owner’s household;
- a person in respect of whom the syndicate is required to enter into an insurance contract to cover the person’s liability.”
“1074.2 The sums incurred by the syndicate to pay the deductibles and make reparation for the injury caused to property in which the syndicate has an insurable interest may not be recovered from the co-owners otherwise than by their contribution for common expenses, subject to damages it can obtain from the co-owner bound to make reparation for the injury caused by the co-owner’s fault and, in the cases provided for in this Code, for the injury caused by the act, omission, or fault of another person or by the act of things in the co-owner’s custody. Any stipulation which is inconsistent with the provisions of the first paragraph is deemed unwritten.“
“1074.3 Where insurance against the same risks and covering the same property has been taken out separately by the syndicate and a co-owner, the insurance taken out by the syndicate constitutes primary insurance.”
“1075.1 An insurer may not, despite article 2474, be subrogated to the rights of any of the following persons against another such person:
- the syndicate;
- a co-owner;
- a person who is a member of a co-owner’s household;
- a person in respect of whom the syndicate is required to enter into an insurance contract to cover the person’s liability.
An exception to this rule applies in the case of bodily or moral injury or if the injury is due to an intentional or gross fault.”
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