Home insurance: the importance of living in insured home – Insurance


Canada: Home insurance: the importance of living in the insured home

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June 17, 2021 – The Superior Court recently issued an interesting decision in Dang v. Industrial-Alliance Home and Auto Insurance Inc., 2021 QCCS 1408, stressing the importance for the insured to make a complete declaration of the risk to the insurer. In this case, the plaintiff asked her insurer for compensation following a fire which had damaged her house. The Superior Court ruled in favor of the insurer who held that the home insurance policy required the insured to stay in the house in order to benefit from the coverage.


The plaintiff owns a house in Trois-Rivières, which had been insured by the defendant since 2012, with an automatic annual renewal. The plaintiff was the only insured under a policy which contained the terms “owner occupant” and “your residential building” [“owner
occupant” and “your dwelling”; our translation]. In May 2018, the building was damaged by fire.

During its investigation, the insurer learned that the plaintiff had traveled sporadically to the United States from 2013 to 2016 and that she had been residing there permanently since February 2016 with no intention of returning to reside in Quebec. However, the house was never left vacant as members of the applicant’s family lived there continuously.

The complainant argued that she had not really moved to the United States and that she had always intended to return.

The evidence revealed that the plaintiff left her home in Trois-Rivières in February 2016 to live with her spouse in the United States and had not returned once to Quebec in the 27 months preceding the fire. During this time, she canceled her automobile insurance in Quebec; tried unsuccessfully to sell his house; acquired a new home in Texas with her spouse; and obtained permanent resident status and green card in the United States.

At trial, the defendant produced as witnesses representatives of two independent insurers who confirmed that, like the defendant, they would not have renewed the policy had they known that the insured did not intend to renew the policy. come back to live in his house.

Analysis and decision

The Court clarified that the onus was on the insurer to prove that the plaintiff did not intend to live in her house and that he would not have renewed the insurance had he been aware of this information. It then specifies that an insurance contract depends on the ultimate good faith of the parties and that the insured must disclose to the insurer any material change in circumstances. If the insured fails to do so, the court may declare the policy terminated if the bad faith of the insured is established or if the evidence confirms that the insurer would not have accepted the risk. On this point, the Court privileged the evidence of the defendant according to which the risk would not have been covered if it had been duly disclosed: “Living in the building is such an important condition that if an insured does not reside in the building. ‘one of the buildings insured, it just can not be insurance. ”
[par 26; our translation] This is not a case where the risk is greater than expected: it is completely excluded. Case law confirms that the notion of “owner” depends on the fact of living in the accommodation.

Considering the above facts, the Court ruled that the applicant had not lived in Quebec since February 2016 and did not intend to return there.

The Court agreed with the insurer’s argument that it would not have renewed the policy in February 2016 had it been informed of the change in risk. As a result, the court declared the policy void as of February 2016 and ordered the return of premiums. The claimant was not entitled to compensation.

The decision reiterates the importance of declaring to the insurer all the facts relevant to the risk assessment and the serious consequences that the insured may face in the event of default.

As the case is currently on appeal, we will await the judgment of the Court of Appeal.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.


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