Homeowner’s Insurance – The Best Protection Money Can Buy

If you hurt someone unintentionally or cause damage or loss as a result of your unintentional actions, then hopefully you have homeowner’s insurance to protect you and respond to a lawsuit on your behalf.

Homeowner’s insurance is very important insurance and, in our view, no one should be without homeowner’s insurance.

The importance of homeowner’s insurance is that it potentially provides you with a legal defence (in a lawsuit) and may cover you for any unintentional negligent acts which end up hurting someone or causing them loss or damage.  For example, if you hurt someone and they sue you and a Court orders you to pay damages, your homeowner’s insurance may be responsible for paying those damages for you.  As examples, you can see our previous blogs including if you’re involved in a physical fight – June 17 blog and May 15 blog; and if someone is hurt while visiting your cottage – March 9 blog.

In today’s world, having car insurance and also homeowner’s insurance provides you with fairly broad coverage and protection.
How Broad is Homeowner’s Insurance Coverage?

Imagine: you buy a home to live in but then tear it down and build a new house.  You then sell that house for a profit.  The purchasers find a large number of defects in your construction and sue you – alleging that they paid you too much and you did not provide a quality home, as advertised.  In this lawsuit, your homeowner’s insurance pays for a lawyer to defend you against the lawsuit.

This is not a typically expected result for homeowner’s insurance, but it occurred in the case ofMcGrimmon and Sholea v. Personal (2010 Ontario Superior Court of Justice).

Typically, if you sell your home and you are sued later by the purchaser who states that your roof is leaky or your basement is leaky, you would not expect to be protected or covered by your homeowner’s insurance – the coverage is not usually anticipated to be so broad.

This would be the case even if you performed renovations to your home for which the purchasers now complain are defective.

However, the McGrimmon decision leaves open the possibility of a defendant obtaining a defence from their homeowner’s insurance.  To avoid a denial of insurance coverage, theMcGrimmon decision confirms the critical importance of drafting the pleadings to trigger the duty to defend and is a useful case for insurance litigators.
Gregory Chang
Toronto Insurance Litigation Lawyer