Scope of the Mechanism
The purpose of the Home Insurance Access Mechanism is to have an insurer provide the consumer with a personal insurance policy for his/her primary residence in Quebec that covers the consumer’s property and civil liability. The coverages provided by the insurer must meet the consumer’s needs, subject to section 3.B. SPECIAL APPLICATION RULES.
This mechanism binds all insurers that have signed the Adherence Agreement for the Home Insurance Access Mechanism (Agreement).
The Mechanism does not apply if the consumer’s difficulty obtaining insurance is based on moral hazard, according to the standards of the designated insurer, where it is relevant to evaluating the risk, particularly in cases of misrepresentation, concealment or a criminal record.
Definitions and Interpretation
The following definitions apply to the words and expressions in bold print. If a term has a different meaning, it does not appear in bold.
Agreement: Adherence Agreement for the Home Insurance Access Mechanism.
Action: Request for insurance by the consumer to a direct insurer or a broker. For the purposes of applying Rule No. 3 in section 2. Rules for determining the designated insurer, a request to a broker is equivalent to a request to the broker’s main insurer for home insurance in terms of business volume.
Consumer: Natural person occupying a residential dwelling.
Designated insurer: Qualified insurer on which IBC imposes a risk.
Group: Two or more insurers that have signed the Agreement and are registered as a group in the list of IBC members or are under common management.
IBC: Insurance Bureau of Canada.
Mechanism: Home Insurance Access Mechanism.
Minimum insurance amount: The lesser of the following amounts: the municipal evaluation or the market value of the building, excluding the land, up to a maximum of $1.5 million for a single-family dwelling.
Qualified insurer: Insurer authorized to transact property and liability insurance in Quebec, or belonging to a group of insurers that transacts this type of insurance in Quebec, and a signatory of the Agreement.
Remuneration: Compensation in cash or in kind received by the consumer for work done or a service provided.
Sharing economy activity: Process of exchanging goods and services, with remuneration.
Procedure for Ensuring Access
1. IBC’s responsibility
IBC is responsible for applying this Mechanism when a consumer asks it to intervene to obtain an insurance policy for the consumer’s property and civil liability. IBC must:
- Determine the actions the consumer must take to obtain insurance covering his/her property and civil liability and inform the consumer of them;
- Ensure that these actions have been taken and that the consumer has in fact been unable to obtain insurance;
- Determine the designated insurer according to the rules specified in section Rules for determining the designated insurer and impose the risk on that insurer;
- Obtain the necessary information to apply the Mechanism, such as the contact information of the consumer, to enable the designated insurer to identify him/her, and the contact information of the consumer’s insurance broker, where applicable;
However, the designated insurer is responsible for obtaining the necessary information to underwrite the risk.
2. Rules for determining the designated insurer
IBC determines the qualified insurer that must provide the insurance according to the following rules. Each rule has priority over the next one.
Rule No. 1 — Last qualified insurer on the risk
The last identifiable qualified insurer that covered the risk for a minimum period of 60 days during the past three years.
Rule No. 2 — Qualified insurer that already covers other risks
The qualified insurer that already covers the majority of the consumer’s risks in:
- Home insurance, or else;
- Automobile insurance, or else;
- Commercial insurance.
Rule No. 3 — First qualified insurer contacted
The first qualified insurer, determined by the order of the actions taken by the consumer.
Clarification about the rules for determining the insurer
When an insurer qualifies by virtue of belonging to a group, the risk is imposed on the main insurer of that group. However, the main insurer can choose to which insurer in its group it assigns the risk.
Insurer's Obligations
3. Issuing the contract
A. General rules of application
The designated insurer must, within a reasonable time period, issue a home insurance contract containing coverage that meets the consumer’s needs. It must ensure that the underwriting conditions, particularly the premium and the deductible, are reasonable so that they are not equivalent to a refusal. In the absence of underwriting standards for the risk imposed, the insurer may draw on its existing underwriting conditions and adapt them to the risk in question.
The insurance amount offered may be less than the amount requested, but it cannot be less than the minimum insurance amount. If it is less than the reconstruction value of the building, the replacement cost co-insurance clause does not apply.
If IBC so requires, the designated insurer must demonstrate that the underwriting conditions are reasonable for the risk imposed.
The designated insurer may not have the risk placed with another insurer outside the group to which it belongs, by using its broker network, for example.
To facilitate the consumer’s, insurance efforts, the designated insurer must, according to its underwriting standards, consider insuring the other dwellings in the policy for the principle dwelling.
B. Specific rules of application based on the reason for refusal
If the insurer’s refusal is based on:
a) Physical risk
The designated insurer must, within a reasonable period of time, offer a minimum coverage and communicate to the consumer and IBC the required conditions to improve the quality of the risk.
Once the conditions have been satisfied, the designated insurer agrees to review the coverages offered to better meet the consumer’s needs.
If the consumer does not satisfy the required conditions within the allotted time, the designated insurer may terminate the contract according to the usual timeframes. The risk will again be eligible for application of the Mechanism only when the conditions have been satisfied.
b) Claims frequency
The designated insurer must propose an insurance contract that meets the consumer’s needs but may establish conditions that enable it to manage the risk.
c) Financial risk
The designated insurer must insure the risk unless a credit check justifies refusing it.
d) Vacancy of the residential dwelling
The designated insurer must insure the risk so that the consumer has coverage for a period of three months following the building becoming vacant.
This period is six months:
- in the case of a succession (estate);
- if the consumer moves out permanently because of his/her health.
e) Non-payment of the premium
The designated insurer must insure the risk but may, prior to issuing the contract, impose on the consumer premium payment conditions that it deems appropriate.
f) Agricultural activities
The designated insurer must insure the risk but may exclude the activities, property and civil liability related to the agricultural activities.
g) Production of cannabis
The designated insurer must insure the risk if the consumer is producing cannabis in compliance with the applicable laws, unless a more extensive investigation justifies refusing it.
h) Presence of animals
The designated insurer must insure the risk but may exclude civil liability for the animal concerned by the refusal.
i) Sharing economy activities or commercial activities
The designated insurer must insure the risk if, according to its underwriting standards, it can do so in a personal insurance contract. It may exclude the activities, property and civil liability relative to the sharing economy activities or commercial activities.
The designated insurer may require the consumer to demonstrate that s/he is conducting the activity in compliance with the applicable laws before issuing a contract.
4. Contract period
The contract must be issued for a period of one year unless a different agreement is reached with the consumer regarding the period.
5. Broker-market insurer
The designated insurer must maintain an up-to-date list of brokers and make it available to the consumer.
The consumer must make reasonable efforts to find a broker that places business with the designated insurer. If the consumer is unable to find a broker willing to take the risk, it falls to the designated insurer to find a solution in order to issue the contract.