Water damage is a familiar headache for homeowners and home insurance providers. It can result from a variety of causes – burst pipes, overland flooding, seepage through the foundation – and can be extremely expensive to repair. That’s why it’s important to talk to a real estate lawyer when you purchase your home and your home insurance. The team at Nanda & Associate can guide your choice of insurer and insurance policy, and help you access compensation for damages that your home incurs.
In February, the Toronto Star published a story that emphasized the importance of what is – and what is not – covered by your insurance policy. Hassan Hojjatian and Mitra Kermani’s GTA home suffered approximately $2-million in severe water damage in June 2011, but were denied coverage by their insurers, Axa Insurance Company and Intact Insurance.
The couple and their real estate lawyer were forced to initiate a lawsuit to cover their losses, which they eventually lost. In their statement of claim, Hojjatian and Kermani said the water had come both from a sudden and accidental plumbing malfunction and through their basement windows during a severe rainstorm.
The insurance companies refuted this claim, suggesting instead that the water had seeped through the home’s foundations as a result of structural deterioration, and that this source was not covered by the couple’s policy. This version of events was supported by the opinions of several experts who said the damage ‘was related to grading of the land around the home’ and ‘water seeping through the foundation,’ according to the Star.
While acknowledging that “water damage to a homeowner’s property is, in today’s world, not an uncommon occurrence” and that the damage “can be catastrophic and render the property unfit to live in as a home,” Justice Suhail Akhtar ultimately sided with the insurers, stating that the policy “specifically excluded damage caused by this type of water seepage.”
Hojjatian and Kermani brought the case before the Ontario Court of Appeal, where a panel of three judges upheld Justice Akhtar’s decision.
“All insurance policies have limitations on what types of water damage they will respond to,” explained Dayle Semple of FCA Insurance in the Star article. “In general terms, coverage is for the sudden and accidental escape, not infiltration of water. This is why coverage for sewer back-up is an additional charge on your more basic insurance policies. Seepage is a general exclusion in insurance policies and usually occurs due to a lack of maintenance and care.”
When purchasing home insurance, be sure to seek the advice of a real estate lawyer who can help you understand your policy and provide advice on the viability of purchasing additional sewer-backup or overland flood coverage, when possible.
If you have recently bought a new home or are interested in purchasing or extending your insurance coverage or switching insurance providers, contact a real estate lawyer at Nanda & Associate today. We can ensure you have the knowledge you need to make the right decision and avoid inadequate coverage.
