Nova Scotia Property Owners Stunned by $100K Water Damage Bill
A Nova Scotia family recently received a harsh lesson in the complexities of home insurance when they were hit with a substantial repair bill for water damage to their Cole Harbour rental property. To their astonishment, their insurance provider initially denied the claim, leaving them facing a potential $100,000 in repair costs.
As Sarah Ryall and her husband prepared to sell their rental property, the couple experienced an unexpected crisis. After a burst pipe caused significant damage, they quickly learned that their insurance policy might not offer the protection they anticipated.
The couple had owned the property for nearly two decades. Selling the home promised crucial financial security for the Ryalls, enabling Sarah to continue as a stay-at-home mother to their nine children and providing more quality family time for Tanner. This plan was threatened when a burst pipe unleashed extensive water damage throughout the home.
In mid-February, Sarah received a frantic phone call from a friend managing the property. “All I could hear was, ‘Oh my God! Oh my God! Oh my God! There’s water everywhere,'” she recounted. The initial shock quickly morphed into dread as they learned about the potential financial repercussions. They were told that a little-known insurance concept, known as a change in material risk, could leave them on the hook for the repair costs.
When the friend and contractor Tom Arnold first arrived at the house, he immediately noticed steam escaping from the front door. That steam grew, and a pool of water sat on the floor inside.
Three copper water pipes, which carried scalding water to the home’s radiators had burst. The subsequent water damage was significant, and the hot water itself transformed the home into a giant steam room.
The Ryalls contacted their insurer, Co-operators. Crews were called to mitigate the damage. The cleanup alone cost thousands, and the repairs were estimated at $90,000. They soon learned that their insurance wouldn’t cover the damage.
The denial was based on the fact that, in the insurer’s eyes, the home had been vacant for more than five days. Despite consistent visits from contractors, real estate agents, and potential homebuyers, Co-operators did not consider these activities as “occupancy.”
Amanda Dean, Atlantic vice-president for the Insurance Bureau of Canada, emphasized the importance of informing insurers about changes in material risk, including renovations, extended trips, or properties on the market. She explained that insurers can then discuss preventive measures with the client to avoid coverage gaps.
“Every claim is different, there is always a host of circumstances that lead up to an event,” Dean stated. “That involves a big conversation between the adjuster and the homeowner.”
Dean also pointed out that if policyholders disagree with their insurer’s decision, they can seek help from an independent ombudsperson or the General Insurance OmbudService of Canada.
After CBC News contacted Co-operators, the Ryalls received a call from a company executive, who informed them that Co-operators would cover the damages. The company later stated that the timing of this call and the resolution were coincidental, as the claims process was still underway.
“It was a huge weight taken off our shoulders and we are so thankful to the Co-operators for working with us now to make sure that we can get these repairs done to our home and restore it to the condition that it was in before this happened,” said Sarah Ryall.
Co-operators released a statement acknowledging the challenges of the situation and expressing satisfaction with the resolution. The company also urged consumers to regularly review their insurance policies and inform their insurers of significant changes to ensure adequate coverage.
Sarah Ryall hopes her experience will raise awareness among others about the potential limitations in insurance coverage. “Even if this just helps one other person out there to not have to face what we’ve faced over the last couple of weeks, this will be well worth it,” she said.
