TREAT YOUR INSUREDS FAIRLY

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Punishing an Insurance Company: Treat Your Insureds Fairly When They Suffer a Loss ... $100,000 Punitive Damage Award Granted Against Insurer

  

This case is a warning to insurance companies as to the strategy they adopt to defend against their insured's lawsuit over the scope and quantum of insurance coverage arising from a fire loss.

  

THE ISSUE  

Having a disagreement with your insured over the amount of loss arising from a significant garage fire is understandable and even anticipated.

But when that disagreement turns to litigation, the insurer has to refrain from engaging in a "high handed litigation strategy" to pressure the insured into settling their claim.  The insurance

company cannot put a "gun to the head" of their insured by raising the stakes in litigation when that same strategy did not factor into the initial assessment and adjustment of the claim.

In the case of Brandiferri v. Wawanesa Mutual Insurance, et al., 2012 ONSC 2206 (CanLII), the Court awarded a $100,000 punitive damage award against Wawanesa Mutual Insurance for taking an aggressive litigation strategy which appeared to be designed to raise the stakes against the homeowner and pressure them to settle.

WHY THIS MATTERS

If your house is significantly damaged by smoke, you will probably be reliant on your insurance company to help you out.

If the insurance company does not dispute that the fire was an innocent accident, then the only issue remaining is the scope and amount of your loss.

For example, these are examples of typical questions that you will face:

• How much will it cost to repair or clean your house?
• How much will it cost to clean or replace your furniture?  Your clothes?
• How much will you receive to find alternative living arrangements?
• If there are big differences in the cleaning or repair estimates between your contractors and the insurance contractors, then whose estimate will prevail?
• What exactly are you entitled to receive under the policy
• money to buy new clothes stained / smelling from smoke or just to have those clothes dry cleaned?
• The quality of materials to repair or re-build your house?

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