A judge’s ruling on ground water policy exclusions could allow policyholders to claim on flood damage on a technicality.
Toronto Star published a feature outlining how a policyholder managed to succeed in her case against her insurer, despite wording on her policy’s exclusions that prevented her from claiming on damaged caused by purported ground water.
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David Morin, a Huntsville, Ontario-based litigation lawyer, told Toronto Star of his client Cheryl Wight, who, on April 16, 2013, had her home flooded in by a nearby creek. The creek, located just 14 meters from her home, was connected to a man-made lake and a dam that covered up to 4.85 hectares.
On that fateful day, the dam burst on a neighbor’s property, which caused a flash flood down the creek and raising water levels to two meters above ground level. The flooding was so fierce that it washed away part of the pavement and damaged four driveways; it also overturned a 2,549kg metal food smoker.
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When the water reached Wight’s home, it had also brought in mud and debris. The flood damaged part of the concrete block wall in her garage.
Wight’s insurer, Peel Mutual Insurance Company, could cover for damages arising from accidental events, but not against loss or damage caused by water. It made exceptions for cases wherein the damage resulted directly from water entering “through an opening which has been created suddenly and accidentally.” The policy, however, did not cover loss or damage caused by surface water.
Peel Mutual denied Wight’s claim, reasoning that there was no coverage for damage caused by ground water. Wight, in turn, filed a suit against her insurer and took the matter to court last year. She asked for judgment in her favor without a trial, based on the wording of the policy.
Judge Edward Coke, who presided over the case, ruled that the damage resulted from the flooding. He then found that the policy says that while water damage is generally excluded, the policy covered for damages caused by the sudden and accidental escape of water from a swimming pool, water main, sewer, drain, sump or from an opening which has been created suddenly or accidentally by a peril not excluded elsewhere in the policy.
Coke ruled that the dam was, in effect, a water management system and thus Wight’s comprehensive policy provided coverage. He also added that the exclusions for ground water and surface water did not apply, as the water from the dam was neither ground water nor surface water.
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