Proof must be truth

Be honest when making a claim
Canadian Underwriter Magazine has recently reported that there has been a denial to reverse the decision on claiming abandoned property.

The magazine reported that, "The Ontario Superior Court has upheld the insurer's denial of a claim for allegedly stolen possessions that were moved into storage after a plaintiff abandoned his home."

The case is Harris v. Home Trust Company, with Steven Harris entered into a policy with Meloche Monnex, the insurer of the household goods within Harris' home.

The story starts when in July or August of 2004, Harris moved out of the house. He left the home in the possession of a tenant. He did not advise his insurer of this change.

Things went downhill and the mortgage on the property went into default in July 2004. The power of sale proceedings were initiated in August 2004.

A writ of possession was issued in January 2005 and then the mortgagee took possession of the home on Feb 3, 2005.

The tenant living in the home moved out on Feb. 3, 2005. This left Harris' belongings in the home. Harris was given notice to remove his possessions by February 17th. What was not removed would be considered abandoned.

The sale of the house closed on April 8 2005 and by that date Harris had not removed his belongings. The Meloche insurance policy expired the next day.

The mortgagee then arranged for Harris’ belongings to be moved to a storage facility. At a later date, the items were moved to another storage facility.

When Harris went to retrieve his property on June 3, 2005 he stated that only half of his property was there. He alleged that the goods were damaged or stolen. He then reported the theft to the police in September 2005. On April 3 2006 he filed a proof of loss with Meloche, stating the claim value as $71,031.

When completing the proof of loss, he included property related to a business. He also included a boat, trailer and accessories stored at the property and valued at $12,700.

Harris conceded his household policy did not cover certain business belongings that were claimed in his proof of loss. This can occur in claims quite often and it is important that you understand where the lines are drawn at the time of a claim.

The claim for the boat, trailer and accessories became more involved with correspondence from Transport Canada showing the boat was observed partially submerged on November 4 2004.

Further investigation showed that Transport Canada deemed it a pollution threat and demanded that Harris haul it out of the water. Harris admitted he failed to do so, which resulted in the boat being pushed downstream by ice in the spring.

“When the plaintiff submitted his proof of loss and included the boat in it, he made a fraudulent insurance claim that results in no recovery under the insurance policy,” Ontario Superior Court Justice Helen Pierce wrote. “He has vitiated coverage under the entire policy. He cannot now expect the insurer to pay partial recovery in the face of the common law rule.”"

Thank you to Canadian Underwriter Magazine for reporting on this situation in their latest issue.