How You Can Lose Your Insurance

INTACT DENIES CLAIM FOR BURST FIRE SPRINKLER EVEN THOUGH FIRE CODE WAS FOLLOWED

VACATIONING COUPLE LEFT FIRE SPRINKLER OPERATIONAL, CAUSING INSURER TO DENY CLAIM | BY ROSA MARCHITELLI | CBC NEWS

POSTED: JUNE 17, 2015

An Ontario couple's home insurance claim is being denied after the pipes of their emergency fire sprinkler system froze and burst, causing major damage. Intact insurance is denying the claim, even though the couple followed the Ontario's fire code and left the sprinklers operational while away on vacation. Diane and Michael Uniac were stunned when intact denied their claim because they left their fire sprinkler system on when they were away for the winter. (CBC)

DAMAGE OVER $250,000

Michael and Diane Uniac live in an attached townhouse in Waterloo, Ont., and for past 19 years, they've been spending winters in Florida. Each year, they turn off the water before leaving, but not the fire sprinkler system."Never in my wildest dreams would it ever occur to me that I would ever consider shutting off the fire system, for heaven's sake," Michael Uniac told Go Public. In January of last year, the pipe supplying water to the fire sprinkler heads froze and burst, severely damaging all four levels of the home. "I was speechless," Diane Uniac said. "There was insulation hanging down and walls hanging down and ceiling fans. It was just shocking."

Claim denied

Intact denied the claim, saying that under the policy, the water needed to be turned off and drained, including the fire sprinkler system, if the couple were away for more than a few days.The Uniacs say they were shocked and confused. Under the building code, the Uniacs townhouse requires a fire sprinkler system that has to remain operational at all times."It's a real mess, a catch 22," Michael Uniac told Go Public.

The Waterloo, Ont., fire department told the Uniacs that their fire sprinkler system must be kept operational at all times.

"We've got the fire department on the one hand telling us we have to have a system and it's got to be maintained on at all times. We've got the city telling us we have to have the system it's a building code requirement. We got the insurance company telling us, you can't do that or you're not insured. It doesn't make any sense at all."

Intact knew the Uniacs had the fire sprinkler system and factored the added safety feature into the couple's premium."I put [a] question to our adjuster early on. I said, 'Supposing instead of a flood we had a fire, and we had turned off our fire system, what then?' Obviously I didn't get an answer, but I can guess what it would have been."

Damage estimated over $250,000

All the floors, walls, and ceilings had to be ripped out, and the home rebuilt. Original estimates placed the cost at somewhere between $250,000 and $300,000. The couple have been doing some of the work themselves and so far have spent over $160,000, borrowing against their mortgage."Common sense dictates you leave your fire system on. The insurance was aware we had it.… I felt it was part of my contract with them to maintain protection. "They really have the odds stacked in their favour. Things that can be legal aren't necessarily just or fair. I'll tell you that," he said.

Broker assumed couple covered

Even the couple's insurance broker, who's paid to interpret and explain policies, thinks the Uniacs should be covered, according to an email sent to the couple after the pipe burst.

Insurance lawyer Scott Stanley says policies have become so complicated that even the experts have trouble understanding them. (CBC)

"He told me flat out in writing that you are covered, that no insurance company is asking anyone to turn off their fire system in the winter," Uniac said.

The couple are considering suing the broker and Intact, but were told legal costs would run about $120,000. That's on top of paying for the repairs.

'Couple did everything right'

Insurance lawyer Scott Stanley from the law firm Murphy Battista, says the problem is not the people but the policies.

"There's nothing these people could have done. If you had a client that acted perfectly — this would be that particular client," Stanley told Go Public.

"This industry needs to make the information simpler for people to digest. There's a problem when the insurance industry itself is struggling to understand the contracts that it's selling … if they can't understand it, there's not hope a regular person can."

The Uniacs say Intact made them an offer a while ago, but it doesn't even cover 10 per cent of the repair costs.

Intact Insurance refused to comment on this story, saying the case is before the courts. (Intact Insurance)

After Go Public contacted the company, Intact's lawyers repeated its request for the couple to sign a confidentiality agreement. Even though the Uniacs have asked their lawyer to put any legal action on hold, Intact tells Go Public it won't comment because this case is before the courts, adding it is confident in its position.

Frozen pipes don’t have to spell disaster

When winter is upon us, in some parts of Canada, that means lots of snow, ice, and freezing winds. Many of us are already dreaming of a winter vacation to some glorious hot spot!

If you’re able to fly away to some tropical island, and leave your home in the icy depths of January, have you made arrangements to keep your house warm while you’re gone? Maybe you have your neighbour picking up your mail, and checking to make sure your furnace is running?

Have you considered what would happen if the power went out while you were away, and temperatures dropped low enough to freeze your water pipes? Water pouring out of frozen, burst pipes, destroying your home! If you have home insurance, you’re ok though, right? Maybe…maybe not!

Most home insurance policies have a restriction that reads something like this: If you are away from your home for more than 3-5 consecutive days during the usual heating season, you need to shut off your water supply and drain the pipes, OR have a competent person checking your home daily to make sure heat is being maintained OR have your heating maintained with 24/7 monitoring with 24/7 service dispatch. These restriction vary slightly from one company to the next, but you can be pretty sure there will be some requirement to safeguard your home while you’re away.

Recently, a couple in Ontario came home from a winter vacation to discover their home in shambles. They had turned off their water before heading to Florida for the winter, but did not shut off their sprinkler system. The building code required that their sprinkler system always remain operative. The pipe leading to the sprinkler heads froze and burst causing extensive water damage throughout their townhouse. Their insurance company denied the claim, stating that all the water, including the fire sprinkler system, was required to be shut off and drained if the policyholders were away for more than a few days.

In another case, a woman was in hospital undergoing cancer treatment. She had been away from home for 3 weeks, when her furnace went out. The pipes froze and burst causing significant damage to her home. While she was away, she had a neighbour keeping an eye on the house, and picking up the mail, but because he didn’t actually enter the house daily, insurance coverage was denied.

Most people are unaware of this standard exclusion on homeowner policies in Canada. And even if you are aware, and try to comply with the conditions, a requirement to leave sprinklers operative, or a sudden medical emergency, can put you in an impossible position.

HomePro Watch offers protection programs against these voids in your Home or Cottage insurance policy when your Home or Cottage is *Unoccupied or ** Vacant for more than 3-5 days during normal heating and non-heating seasons. Protection programs at affordable rates that will ensure your insurance coverage is maintained while you are away. Choose your program today….before its too late!

Don't let your House Insurance Take A Holiday

TheStar.com - Bob Aaron

Away for the holidays?

Under most insurance policies, if your house is unoccupied for more than four consecutive days during the winter season, your insurance will not cover water damage from the freezing of any part of a plumbing, heating, or air-conditioning system, or an appliance such as a washing machine or dishwasher.

Typically, an insured homeowner will not be able to make a successful claim for this type of damage unless arrangements were made for a competent person to visit the house daily to make sure the heat is maintained.

Other options are to shut off the water supply and drain all pipes and appliances or have your home monitored with a 24/7 Central Station service.

Check Your Home or Cottage Insurance Policy

ICFHome.ca

Reported by CBC News, an elderly woman battling cancer learned recently that the standard practice isn’t always common knowledge in the home insurance business. (CBC News article “Cancer patient’s home not covered for flood damage because she was away for treatment – Apr 20, 2015).

As revealed by a CBC “Go Public” investigation, Ivy Scotland, 84, was stunned when she was stuck with an $11,000 damage repair bill after she left her Pembroke, Ontario, home for treatment in the hospital. During three weeks she was in the hospital, the pipes in her house froze and burst, causing water damage.

But Grey Power denied Scotland’s insurance claim, citing a clause in the policy that Canadians who leave their homes unattended for more than four days in the winter are not eligible for coverage for water damage unless they appoint a responsible person to check the heat inside every day.

“We all agree the case is unfortunate, but the rules are the rules”, said Grey Power while denying the claim. “This is an exclusion on every personalized home insurance policy”.

CTV NEWS CALGARY

Property Alert
ctvcalgary.ca
Published Tuesday, May 3, 2011 5:38PM MDT

When you go out of town do you have someone check on your house while you are away? Consumer Specialist Lea Williams-Doherty has tips to ensure your insured.

When the Thomson family did not receive the help they needed from their insurance company, they turned to Lea Williams-Doherty for help.Melinda Thomson moved from her Rockyford home into her parents' basement in Calgary last fall.

She made the change so her special needs son could get the kind of schooling that her Rockyford community could not provide.Thomson assumed that as long as she kept paying her home insurance premiums, and either she, or her realtor neighbour, checked on her house every other day, everything was fine.

However, when a water pipe burst and flooded her home, everything was not fine.TD insurance denied Thomson's claim because her home was vacant when the damage occurred."I thought I was doing what I was supposed to do," Thomson said. "I paid my bill every month, why aren't they helping me when I need the help?"Now, because she can't afford to repair the damage, Thomson stopped making mortgage payments and is facing foreclosure.

TD declined to comment on Thomson's case citing privacy concerns.They did, however, point out that the policy says if a home is vacant, defined as unoccupied for 30 days or more, TD is no longer obliged to pay for any insured losses. Mark Klein of the Insurance Bureau of Canada says that this ‘no coverage if home is vacant for 30 days' rule is typical on all home policies.

The IBC says that if you need to leave your home vacant, ask your insurance company for something called a ‘Vacancy Clause Rider'."Normally insurers will charge an additional monthly premium for this based on various factors including the value of the property, the length of time it would be vacant, who is checking on the home, how often, and the reason for the vacancy," Klein says.

It is also important to clarify what kinds of losses, such as fire or water damage, will be covered by the vacancy clause rider.According to the TD Policy, water damage caused by breakage due to freezing of the plumbing system located within a heated building will not be covered if you have been away from your home for more than seven consecutive days unless you either:

Arrange to have someone enter your home every seven days to ensure that heating is being maintained
Shut off the water
Connect your water and heating system to a monitored alarm system with 24/7 dispatch

According to the IBC, a four day time limit is more typical, and they say that you should have someone check on your house every day you are away, especially in the winter

ConsumerInfo on Home Insurance

BEFORE YOU HEAD SOUTH . . .

By Michael C. Maclean

Heading south? Who can blame you if you are!

Before you go, however, let's look at your property insurance needs back in Canada.

There are two main considerations:

What must you do to comply with your policy?
What else should you consider?

There is often confusion between a property that is vacant and one that is unoccupied.

The definition of Vacancy will be found in your property policy, most likely towards the beginning under the general heading "Definitions." While this definition might vary slightly from policy to policy, a typical definition would be as follows:

Vacant -- Refers to the circumstances where, regardless of the presence of furnishings: all occupants have moved out with no intention of returning and no new occupant has taken up residence; or, in the case of a newly constructed home, no occupant has yet taken up residence.

You should check the definition in your policy and if you have any questions, discuss the matter with your insurance provider.

Most people going south for a few months will be leaving behind an unoccupied house, rather than a vacant house.

Unoccupancy generally affects only coverage for frozen pipes and the resultant damage.

Vacancy, on the other hand, can affect the entire policy, rendering it ineffective after 30 days of vacancy.

Most policies have a clause that states that if you are going to be away for four or more consecutive days (i.e., the dwelling is unoccupied), in the usual heating season, you must make special arrangements to monitor the heating if coverage for frozen pipes is to apply. Alternatively, you could turn off the water and drain the water system.

Other arrangements that should be made to protect your property:

Stop your mail and paper deliveries.
Have someone check regularly on the home.
Consider using timer switches to turn lights, music, etc., on and off.
Arrange to have snow cleared.

NOTE: The above is general information only. Policy terms and conditions can vary from one company to another. Always be sure to check with your insurance provider for more-specific information.