A Home Under Renovation Isn’t Necessarily ‘Under Construction’: Appeal Court

 Thursday, June 17, 2021

 Canadian Underwriter

A home under renovation doesn’t mean it is ‘under construction,’ Ontario’s Appeal Court has ruled, rejecting an insurer’s interpretation of its home insurance policy exclusion.

In Tataryn v. Axa Insurance Canada (now Intact Insurance), Susan Tataryn’s Ottawa property served as both her residence and place of business for her tax law practice.

Her property was undergoing significant renovations before sustaining two separate occurrences of water damage.

The first flooding event, on Dec. 12, 2010, was the result of an internal plumbing malfunction and gave rise to an unresolved legal action against Axa about the amount of the loss. The renovations were mainly discontinued up until the second flooding event, which happened on Mar. 6, 2012.

Axa denied coverage for the second water damage claim in March, relying on a policy exclusion that said the insurer would not cover loss or damage ‘occurring while the building is under construction … even if we have given permission.’