Benefits for Home Renovations Alllowed by Superior Court

We have attached a copy of a recent decision of the Ontario Superior Court that will be of interest to those dealing with accident benefits claims. The case is Alfred v. Allstate. The name might be familiar to you, as there was a FSCO arbitral decision in this same case back in 1999. Both cases dealt with the issue of entitlement to benefits for home modifications.

The plaintiff suffered major injuries in a 1993 accident, leaving her partially paralyzed and confined to a wheelchair. She and her advisors felt that the apartment in which the plaintiff and her family were living was not suited to her needs. The plaintiff wanted to move into her own house, together with the rest of her family. But she could not afford to buy a suitable home because the modifications that would be necessary would cost an additional $70,000 to $80,000. She approached Allstate about paying for the purchase of the home. In the 1999 decision, a FSCO arbitrator found that Allstate was not obliged to fund the purchase and renovation of a home, although Allstate was ordered to make a lump sum payment on account of three years of income benefits which it was found to have wrongfully terminated.

Using this lump sum payment, the plaintiff would have been able to afford the purchase of a home herself. But the home would still require modification to make it suitable for her use. She again approached Allstate, this time about paying for just the cost of the renovations (estimated this time to be between $125,000 and $165,000) as a med-rehab benefit. Allstate again refused and the plaintiff did not buy the house. She and her family continued to live in the rental unit and she sued Allstate in Superior Court.

Justice Himel, the trial judge, rejected Allstate’s argument, that the suit was barred by the earlier arbitral decision. The plaintiff’s claim was found to come within the language of s. 6(1)(e) of the pre-1994 SABS: “home renovations to accommodate the needs of an insured person”. Allstate was ordered to pay the estimated cost of the renovations in 2001, which amounted to $156,000.

The plaintiff also claimed for damages to compensate her for losses suffered as a result of Allstate’s denial of the claim for renovations (e.g. rent that would not have had to be paid, the increased cost of renovations in 2004, etc.) This claim was rejected. The court found that allowing such a claim for consequential damages could have very harsh results for the insurance industry. Here, Allstate had obtained two legal opinions in support of its position. Thus, Justice Himel found that it had not conducted itself in such a way as to be liable for additional consequential damages.

We hope this update is of interest to you.

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