A basement floor damaged by an upheaval of the foundation was not covered under the insured’s property insurance

An Insurer (“Wawanesa”) was entitled to rely on a clause excluding coverage for damages caused by settling, expansion, contraction, or bulging where an Insured brought a claim relating to a basement floor which was damaged by upheaval.

Tomko v. Wawanesa Mutual Insurance Co., [2007] M.J. No. 17., Manitoba Court of Appeal., Huband, Monnin and Freedman JJ.A., January 25, 2007

The Insureds sustained structural damages to their house as a result of the shift in foundation and heaving of the floor/slab. They alleged that the upheaval of the foundation was related to work performed by the Municipality on a sewer line which damaged the weeping tiles under the house. Wawanesa denied coverage to the Insureds on the basis of an exclusion clause in the policy excluding coverage for, amongst other things, “settling, expansion, contraction, moving, bulging, buckling, cracking or the falling ceiling or wall plaster….” The policy contained additional exclusions for damages caused by water below the surface of the ground, landslide or any other earth movement. The Insureds argued that under the authority of the decision in Rivard v. General Accident Assurance Co. of Canada, 2001 MBQB 293, Wawanesa needed to prove that the loss was due to natural causes before the exclusion clauses would apply. The Court disagreed, noting that the Wawanesa exclusion clause did not refer to the cause of the damage. Instead, the Court noted that the exclusion clause contained a series of words, all of which related to structural movement resulting in structural damage. In this case, the damage to the property arose from normal wear and tear and natural causes resulting in earth movement and structural damage. As such, the exclusion clause applied to exclude the claim. The appeal was dismissed with costs.

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