Denial of Home Insurance Claims
When you purchase home insurance, you are doing so for the peace of mind that if your home is damaged or destroyed by a fire or another cause, you will be able to deal with the problem quickly and efficiently. You expect the insurance company to treat you fairly, and to not deny your claim when you have paid your premiums, followed their deadlines for submitting your claim – and have done nothing wrong.
A recently released decision from the BC Court of Appeal highlights one of many kinds of circumstances in which powerful insurance companies improperly deny claims. In this decision (Busato v. Gore Mutual Insurance Company, 2025 BCCA 79), the plaintiff’s home was unfortunately destroyed by an accidental fire that started in the kitchen. After the fire, the insurance company learned that the plaintiff had been legally growing marijuana for medical purposes under a license obtained from the federal government – he had chronic and debilitating pain after five surgeries from 2006 through 2013 and required the marijuana for pain management.
The insurance company denied the claim on the basis of an exclusion in the insurance policy. The trial court agreed with the insurance company and dismissed the plaintiff’s claim. The Court of Appeal reversed the trial court’s ruling, on two grounds: (1) the exclusion clause in the policy was ambiguous and should be interpreted narrowly in favour of the plaintiff (reasoning that any ambiguity should be resolved against the insurance company since they drafted the policy); and (2) the language in the policy was unjust or unreasonable pursuant to the remedial provisions found in s. 32 of the Insurance Act, R.S.B.C. 2012, c. 1, which permits the court to find that particular language in a policy is not binding on the homeowner.
The takeaway? Insurance companies routinely deny claims for all kinds of reasons, often without any legal justification. They know that denying claims will cause many of their insureds to simply walk away from their claim, and they know that many people do not realize that insurance denials can be challenged.
If your insurance claim has been denied (home insurance, life insurance, disability insurance), contact Rice Harbut Elliott without delay and we will evaluate whether your claim has been unfairly denied.