Homeowner's insurance - Interpretation of policy - Coverage - Exclusions - Water damage - Mistakes of insured; Policies and insurance contracts - Terms of policy
October 2007Graham v. Canadian Direct Insurance Inc.
[2007] B.C.J. No. 1897
British Columbia Supreme Court
D.M. Smith J.
August 28, 2007
The Court denied the Insured’s application for coverage pursuant to a Homeowner’s Insurance Policy after finding that the loss caused by the Insured’s mistake in failing to turn his sprinkler system to automatic before leaving on vacation did not fall within the coverage provisions of the Policy.
This was an Application by the Insured, Mr. Graham, who sought a Declaration of Coverage under the terms of his comprehensive Homeowner’s Insurance Policy (the “Policy”) with Canadian Direct Insurance Inc. (“Canadian”).
The Insured went on a vacation and left his outdoor sprinkler system operating, assuming it was on automatic and would shut off. Earlier in the day, he had turned it to manual. By failing to reinstate the system to automatic, the sprinkler continued to operate in his absence. When the Insured returned home after the vacation, he found significant damage to the foundation of his house caused by the resulting flooding. Canadian Direct denied his request for coverage under the Policy.
The central issue in this Application involved the interpretation of the Policy’s relevant coverage and exclusion provisions. The Policy did not provide coverage for loss or damage caused by water unless the loss or damage resulted from the sudden and accidental escape of water. The Policy contained an exclusion for loss or damage caused by continuous or repeated seepage or leakage of water.
The Insured submitted that the manual escape of water was sudden and accidental. The Insurer submitted that there was no escape of water based on the Little Oxford English Dictionary which defines “escape” as to “break free from captivity or control” because the sprinkler and the control box did not malfunction so as to cause the water to “break free”.
The Court found that the loss caused by the Insured’s mistake in failing to turn his sprinkler system to automatic before leaving on vacation did not fall within the coverage provisions of the Policy. There was no “sudden and accidental escape of water”. The water did not “escape”. Any negligence for the mishap had nothing to do with the operation of the sprinkler but with the Insured’s mistake in failing to switch the system back to automatic.
In the result, the Court found that the Insured’s loss was not covered by the Policy. In the alternative, the Court found the loss was excluded by the Policy.
This case was digested by Harper Grey LLP Associate Steve Vorbrodt and edited by Partner David Pilley.
