With an increasing aging population, the risk of a loved one being forced to leave their home indefinitely is also on the rise. But what happens to the home of a loved one in such a scenario, especially if there is damage to the property while they are away? The recent decision in Gregson v. CAA Insurance addresses such a scenario and the conclusion reached was that the house had been vacated and therefore there was no coverage for property damage that occurred during that time period.
The Plaintiff, who sustained water damage to her house in March 2017, had not been living at the property when the property experienced a crack in a water pipe. In fact, the Plaintiff had stopped living in her house in October 2016, when she was taken to the hospital, then moved to a retirement home and then back to the hospital. In March 2017, after the water damage had transpired, the Plaintiff was deemed incapable and her lawyer acted under a Power of Attorney. The lawyer admitted that when the Plaintiff was hospitalized in October 2016, he only attended at the house infrequently, to check the mail and heat. No one was spending the night at the property and no one else had access to the property.
The Plaintiff herself did not return to the property and in fact passed away in September 2019. The lawyer was appointed Estate Trustee 10 days after the water damage had already occurred.
A Claim was made for the property damage to the insurer of the house. The insurer sought an Order dismissing the action which rested on the assertion that at the material time the property was vacant for more than 30 consecutive days with the policyholder having moved out with no intention of returning. Accordingly, summary judgment was sought. The only argument which was advanced by the insurer was regarding vacancy. The Estate took the position that the property owner had not moved out with the intention of never returning and without the Power of Attorney being triggered, her lawyer could not make the decision for her.
After reviewing the evidence, the Court concluded there was insufficient evidence of planning to conclude that there was an objective intention to return. There was no plan for live-in or daily assistance. No social worker or agency had been retained to assist the Plaintiff in moving back home.
It was cited that
The common law defines vacancy as inoccupation, meaning there is a lack of habitual presence by human beings. The property is regarded as vacant within the meaning of the policy if the occupant moved out with no intent to return as an occupant. It would not be vacant if the occupant intended to return to occupy the premises: Zimmerman v. Royal & Sun Alliance Insurance Company, [2007]
Reference was also made to Maracle v. Bay of Quinte Mutual Insurance Co. et al. which indicated that the subjective intention or desire of the property owner was what mattered.
Again, because there was no plan for the home owner to return to the property, it was found that the house was vacant at the time of the water damage and therefore there was no coverage for the damage.
The case reinforces the importance putting a plan into play, when a loved one has to move out due to medical reasons. Vacancy endorsements can be obtained if a loved one is going to be out of the house for a significant period of time. However, most polices indicate how often the property needs to be checked if the owner is not present and what is required to be carried out for coverage to remain in force, i.e. the frequency of someone attending at the home, the inspection that needs to be carried out, etc. The best option is to speak with your insurance company or insurance broker and ensure that they are notified of the situation when it occurs. It may be the last thing that one wants to address, especially in such challenging circumstances, but given the climate that we have in Canada, and the chances of water damage as a result of burst pipe, it is wiser to address the insurance issue as soon as possible to ensure and maintain coverage, especially in these circumstances.