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Households, cottages and insurance!

cottages, households and insurance

A household is thus a type of community, most readily understood by analogy to a family unit. Although a household is not synonymous with a family, the existence of a household is evidenced by the extent to which its members share the intimacy, stability, and common purpose characteristic of a functioning family unit.

In Ferro v Weiner, a recent Ontario Court of Appeal decision, the Court discussed what is meant by coverage under a homeowner’s policy of insurance for those homeowner’s relatives “while living in the same household” as the homeowner.

In this case, the insured Enid, at the time of the incident, was living in a nursing home. She had a house on Lake Eugenia, which had been constructed as a vacation property in the late 1960’s. She had occupied the property from the late 1980’s or early 1990’s as her sole residence before moving to a nursing home. Her three adult children and their families continued to use the property as a cottage. At all relevant times, the insured Enid was the sole owner and sole person insured for the property through Intact Insurance.

The Intact policy provided coverage not only for the insured but also for all of the insured’s relatives “while living in the same household” as the named insured. The policy covered the insured’s primary residence and also the insured’s seasonal and other residences.

The insured’s son Scott, his wife Sandy and their daughter Regan were named as defendants in an action where a young man drowned at the house during a high school party in May 2010. Scott and Regan were present at the house during the party. The appellant Enid’s Estate was also named as a defendant. The Plaintiff’s claim was settled by Scott’s insurer TD Insurance and TD brought a summary judgment motion seeking a declaration that Intact was bound to defend and indemnify all defendants against the claims advanced by the Plaintiffs. The motion was granted and it was found that Scott, Sandy and Regan were insureds under the Intact Policy. The motion judge ordered Intact to indemnify TD 50% of the value of the settlement with the Plaintiffs.

Intact appealed. Were Scott, Sandy and Regan insureds under the Intact policy? Were they entitled to coverage?

Scott had taken an ownership interest in the house and cared for the property in the manner in which an owner would. However, it was argued that the correct focus was whether Scott was a member of the same household as Enid, the policyholder.

However, what is meant by “same household”?

A household is constituted not only by its members’ patterns of living with each other, but also by their settled intentions.

membership in a household is assessed holistically, based on the totality of the parties’ relations and intentions towards each other.

The Court of Appeal concluded that at the time of the accident, Enid was living in a nursing home. Scott lived with his family in the City and had an urban household. Enid never lived with Scott. Scott maintained a separate identity of life from his mother Enid and did not view his mother’s house as his home base.

Accordingly, there was no coverage found under the Intact policy. The definition of household has been defined through many cases. The Court of Appeal recognized that a person may belong to more than one household, but typically this relates to minor children. However, to meet the definition of household, the Court of Appeal concluded that there had to be evidence of a shared life, and there was no evidence to support this.

In this case, the policy wording was clear and unambiguous and the intent of the policy was clear. The Court of Appeal therefore refused to broaden the definition of household beyond the policy wording.

With our aging population, this will be a recurring issue, especially when it comes to family cottages or other seasonal or recreational properties. Always check your policy to determine what coverages are in place and if you have concerns, speak to your broker for clarification.

We have used over 10 Pallett Valo lawyers on different matters and find that they are always responsive.
Dr. Don Pinchin, Pinchin Environmental Ltd.