Insurer B: Policy Limit - $500,000 $80,000 (50% of loss up to policy limit) Insurer B’s Liability: $80,000 (50% of loss up to policy limit) Scenario Two Value of Loss: $200,000 Insurer A’s Liability: $100,000 (50% of loss up to policy limit) Insurer B’s Liability: $100,000 (50% of loss up to policy limit) Scenario Three Value of Loss: $240,000 Insurer A’s Liability: $100,000 (50% of loss up to policy limit) Insurer B’s Liability: $140,000 (50% of loss up to policy limit) Which method to Family Use independent liability method for use? Insurance determining contribution of overlapping liability policies Hayden Use maximum liability method for Rationale: determining contribution for property Property insurance: insurance, and independent liability method Correlation b/n premiums for determining contribution in liability and policy limit insurance. Premium by reference to value of property Correlation b/n policy limit and property value Liability insurance No correlation b/n premium and risks or policy limit Policy limits arbitrary Hayden: Policy 1: Premium £6, policy limit £100,000; Policy 2: Premium £5, policy limit £10,000 Parties’ reasonable expectations BC Ins V Act Statute Mandates Independent Liability Method s. 80(3) (3) In this section, "rateable proportion" means
Insurer B: Policy Limit - $500,000 $80,000 (50% of loss up to policy limit) Insurer B’s Liability: $80,000 (50% of loss up to policy limit) Scenario Two Value of Loss: $200,000 Insurer A’s Liability: $100,000 (50% of loss up to policy limit) Insurer B’s Liability: $100,000 (50% of loss up to policy limit) Scenario Three Value of Loss: $240,000 Insurer A’s Liability: $100,000 (50% of loss up to policy limit) Insurer B’s Liability: $140,000 (50% of loss up to policy limit) Which method to use? Family Insurance Use independent liability method for determining contribution of overlapping liability policies Hayden Use maximum liability method for determining contribution for property insurance, and independent liability method for determining contribution in liability insurance. Rationale: Property insurance: Correlation b/n premiums and policy limit Premium by reference to value of property Correlation b/n policy limit and property value Liability insurance No correlation b/n premium and risks or policy limit Policy limits arbitrary Hayden: Policy 1: Premium £6, policy limit £100,000; Policy 2: Premium £5, policy limit £10,000 Parties’ reasonable expectations BC Ins V Act s. 80(3) Statute Mandates Independent Liability Method (3) In this section, "rateable proportion" means