Purchasing home insurance provides people with protection should their home be damaged by things such as theft, natural disasters, fire, or flooding. However, as one case recently heard by the Supreme Court of Nova Scotia, claims for fire damage resulting from arson on the part of the homeowner will result in a denial of the claim.
The facts of the case date back to 2010. The homeowner, who had separated from his spouse a few years earlier, had come into financial hardship. He owed her $16,024.54 from a 2008 judgment. He also had six credit accounts, including a mortgage on his home in the amount of $44,500. At the time of the fire, the mortgage had not been paid for 277 days. His other five credit accounts were also past due. In addition to his credit accounts, the homeowner also owed more than $3,500 in property tax.
The events leading to the claim took place on September 9, 2010. The homeowner, who was a self-employed locksmith as well as a property maintenance worker, shared the home with his girlfriend. They broke up a few days prior to the fire, though many of her personal items remained in the home.
His day began as it normally did, meeting his brother before work and returning home at around 5:00. He said he grabbed a couple of beer (there was testimony that he had a drinking problem) and went to his garage to clean up. He said he returned to the house, which was separated from the garage by a breezeway, after about 15 minutes to grab six more beer before heading back to the garage. He claimed this was the last time he was in his house before the fire, stating he left the steel door and storm door he used closed, but not locked (though the front door was locked).
Sometime between 8:00 and 8:30 he exited his garage and walked north along his driveway, lighting a cigarette. It was at this time that he noticed his neighbours lining the street. One of them told him they saw smoke and asked if his house was on fire. Up to this point the homeowner claimed to have not noticed anything unusual, but then heard a loud “whoosh” and observed glass blowing out of his kitchen windows. He took shelter in his van and called 911. He said he moved his van and tried to extinguish the fire, though his neighbours could not corroborate that testimony.
The fire department was able to put out the fire, but the house suffered considerable damage. During the ensuing investigation the fire examiner was unable to determine the cause of the fire (but did rule out electrical or other accidental heat source). The examiner also found the fire alarm had been disconnected, and there was an exploded fire extinguisher at the bottom of the stairs to the basement as well as a number of burnt cans.
The homeowner files a claim
The homeowner filed a claim against his insurance company. He was denied coverage after the insurer found the only reasonable conclusion to how the fire started to have been the homeowner intentionally setting it on fire. The homeowner commenced an action against the insurer, but took his life nine months later. Nevertheless, the court still heard the case.
The homeowner’s estate claimed the fire loss was not an intentional act, and that it was caused by either spontaneous combustion, careless disposal of smoking materials, or an electrical fire. Any of these could have occurred under the basement of the stairs leading to the second floor of the home. They claim the insurer rushed to judgment and the estate should be entitled to the proceeds of the insurance policy, amounting to $495,000 plus interest.
The insurer maintained their position that the fire was deliberately set, and that the homeowner had both motive and opportunity.
The court heard from a number of witnesses before determining that the investigation leading to the determination that the fire was deliberately set was the most accurate. While the court was unable to find any direct evidence of arson, it did find that the insurer had established, on a balance of probabilities, that arson was the cause of the fire. As a result, the claim was dismissed.
It’s natural for people to turn to their insurance policies to recover losses following property damage to their home. However, insurance companies may require an investigation to determine what it’s obligations are. This can result in complex, technical, and lengthy disputes. Don’t enter these situations without the representation of an experienced insurance lawyer. The excellent team of insurance lawyers at HMC lawyers provide coverage opinions and advice to our clients on coverage disputes and other insurance-related issues. Please contact us online or by phone at 403-269-7220 to see how we can help you today.