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When Following the Law Leads to Unfair Results

In Soczek v. Allstate Insurance Co., the plaintiff’s husband attempted to kill her by pouring gasoline on her and lighting her on fire. The plaintiff sustained significant injuries and in the midst of the tragic events the family home was burned down. The plaintiff was co-owner of the home with her husband and they were co-insured under an Allstate homeowner's insurance policy. The plaintiff advised her insurer of the fire and sought reimbursement for the damage caused to her home. The insurer refused coverage. It relied on an exclusionary clause in the plaintiff’s policy. The clause excluded coverage for property damage caused by any “intentional or criminal act” by a person insured under the policy, which included the plaintiff's husband.

Justice Morgan heard the motion. His decision highlighted the unfairness of this exclusion clause and acknowledged the hardship and position of the plaintiff. Nevertheless, he decided in favour of the insurer and dismissed the plaintiff's case. The plaintiff was left with the loss of her home and no insurance coverage to repair it.

The fall-out of the decision was not a determining factor in the overall analysis. As difficult as it is to understand, the judge’s hands were tied in the matter. The law in Ontario is clear; it has dealt with this exclusion clause in the past and has refused to put it aside.

Other provinces have taken a pro-active approach to avoid such unjust scenarios by enacting a bar against these types of exclusionary clauses. Unfortunately, Ontario has not followed suit. There’s no doubt that there is fundamental injustice in this decision. It is a prime example of how the law doesn’t always consider fairness and iniquity.

You can read the decision in its entirety here.
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