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PROPERTY INSURANCE - Household or homeowner’s policies

Monday, August 23, 2021 @ 9:38 AM  

Lexis Advance® Quicklaw®
Appeal by the insurer from a chambers judge’s order that granted summary judgment in favour of the insureds for repairs to their property, lost rent and the cost of utilities. Cross-appeal by the insureds from the chambers judge’s application of a negative contingency in calculating the lost rent. The insureds’ residential property, occupied by tenants, was damaged by a fire in November 2014. The insurer’s adjuster provided notice of the limitation period the day after it received the insureds’ claim. The insurer refused to pay lost rent and utilities after November 2015. Two umpire processes in 2017 awarded the insureds for repairs, lost rent and utilities through to January 2017. In December 2017, the insureds brought an originating application for summary judgment. The chambers judge affirmed a master’s decision that extended the limitation period and awarded the insureds $127,241 for remaining repairs, judgment for $45,787, being the amounts determined in the umpire proceedings, and $60,900 for lost rental income and $6,663 for utility costs from the date of the umpire proceedings to the date of the decision. The chambers judge imposed a negative contingency to some of the lost rent amounts.

HELD: Appeal allowed in part; cross-appeal allowed. The purpose of the Fair Practices Regulation was consumer protection. The insurer could give effective notice before its actual obligation to provide notice had arisen. Proper notice could be provided by the adjuster. The master and chambers judge correctly found the insurer’s notice was insufficient as it did not clearly state what had to be done within two years. Their discretionary decision to extend the limitation period because the insurer’s notice was inadequate was reasonable. There were genuine issues for trial regarding the umpires’ awards, which could only determine quantum, not coverage. The chambers judge erred in granting summary judgment on the umpire awards. A determination of when the property should have been fit for habitation was required before the issue of lost rental income and utilities could be addressed. The chambers judge erred in applying a negative contingency to lost rental income that had not been requested or argued.

Statt v. SGI Insurance Services Ltd., [2021] A.J. No. 1010, Alberta Court of Appeal, F.F. Slatter, P.A. Rowbotham and J. Antonio JJ.A., July 26, 2021. Digest No. TLD-August232021002