Umpire appraisals under the Insurance Act may be confined in scope to specific expenses known at the time, such that different expenses may be submitted under the same head of coverage following the appraisal.

Property insurance – Proof of loss – Mandatory appraisal – Bad faith – Statutory provisions – Practice – Appeals – Summary judgments – Duties and liabilities of insured

Truscott v. Co-Operators General Insurance Co., [2023] O.J. No. 1709, 2023 ONCA 267, Ontario Court of Appeal, April 19, 2023, E.E. Gillese, M.H. Tulloch and L.B. Roberts JJ.A.

The insured submitted building and valuable paper loss claims to the insurer following a fire loss. Some of the claims were subject to umpire appraisals. After the appraisals, the insurer would not pay out claims which were not covered by the appraisal process. The insured brought an action against the insurer and the insurer’s employee who was handling the claim, in negligence and bad faith. The Court of Appeal overturned the lower court’s summary judgment in favour of the insurer. The action was not suitable for summary judgment as it only partially addressed the claims, the issues could not be easily bifurcated from the issues that would need to be adjudicated at trial, and the issues required credibility assessment. Additionally, the Court of Appeal held that the appraisal process was not a “one-shot” valuation. The umpire had confined his appraisal to specific expenses. The insured had a right to submit further proofs of loss under a given head of coverage for different expenses. Finally, the Court of Appeal also affirmed that the action could be maintained against the employee as a named defendant even though the insurer was vicariously liable for the employee.

This case was digested by Dionne H. Liu, and first published in the LexisNexis® Harper Grey Insurance Law Netletter and the Harper Grey Insurance Law Newsletter. If you would like to discuss this case further, please contact Dionne H. Liu at dliu@harpergrey.com.