Stewart v. Bay of Quinte Mutual Insurance Co., 2024 ONCA 730
Reading Time: 4 minutes (approx.)
By: Sarah Richard (Articled Clerk)
This case arises from a fire damage claim filed by the Estate of Mr. Dennis Lynch, who alleged that the insurance policy underinsured his property and its contents. The policy had limits of $200,000 for the building loss and $110,000 for the contents. Mr. Lynch received the full $200,000 for the building loss but only $60,000 for the contents. In 2012, the estate filed a lawsuit claiming that Bay of Quinte Insurance was negligent, resulting in a $93,000 shortfall for the building and a $74,000 shortfall for the contents. The trial judge rejected the negligence claim but allowed the estate to recover the difference between what was paid and the policy limits for the contents.
Bay of Quinte Insurance appealed the decision on three grounds:
- The trial judge erred by allowing the claim for lost contents despite the insured’s failure to provide a sworn proof of loss;
- They were entitled to an order for an appraisal process under the law; and,
- The trial judge made an error in assessing the value of Mr. Lynch’s lost personal property.
On the first issue, the court clarified that the law requires the insured to submit a proof of loss verified by a statutory declaration, including a full list of the damaged or destroyed property. However, there is no specific format required. The court also emphasized that this requirement is part of all property insurance contracts in Ontario and should be understood in a way that protects consumers. Since the court did not challenge Mr. Lynch about his incomplete proof of loss, it waived the strict compliance with this requirement.
Regarding the second issue, the court agreed with the trial judge’s decision not to order an appraisal. The insurance policy allows for flexibility and quicker methods to settle claims. If an appraisal causes unnecessary delays, the court will not require it.
Finally, on the last issue, the court found that an appraisal would cause unnecessary delay and added costs. Instead, the court could rely on an expert witness to assess the value of the lost personal property.
In summary, this case highlights the discretion courts have in determining the value of lost property and the public policy considerations behind insurance contracts. The court aims to ensure fairness between the insured and the insurer. It is crucial for insurers to comply fully with contractual obligations, as failure to do so may result in waiving certain rights under the law. Importantly, the insured is not penalized for the insurer’s failure to comply. The appeal was dismissed with costs.
