Policies and insurance contracts - Interpretation of policy - Exclusions - Contra proferentum rule

Smith v. Wawanesa Mutual Insurance Co.

An application for judgment pursuant to a policy of property insurance. The application was denied.

[2013] A.J. No. 690

2013 ABQB 369

Alberta Court of Queen's Bench

J.B. Veit J.June 27, 2013

The applicants insured their barn with Wawanesa. The building had been damaged by a heavy snow fall. The weight of the snow had allowed moisture to infiltrate the seams of the roofing and the fastener locations. Several months later, heavy rain caused water to enter the building which caused damage.

The applicants brought a claim pursuant to their policy with Wawanesa. The policy excluded coverage for loss or damage caused to the interior of the building by rain, hail, snow, sleet, sand or dust unless an opening in the roof or the wall of the building had been made by wind or hail. The applicants sought judgment under the policy on the basis that the policy was ambiguous and they did not understand that they were not covered for the damage that the building sustained.

The application was denied. The court found that there was no ambiguity in the language of the policy. The agreed statement of facts established that the damage to the interior of the building was caused by rain or snow. However, neither wind nor hail had anything to do with the creation of an opening which allowed the snow and rain to cause the damage. Therefore the damage to the interior of the building was clearly excluded. However, the damage to the exterior of the building may be covered by the policy and that issue remained to be settled.

Even if it were possible to have expressed the exclusion more clearly, any such alternative does not create an ambiguity. Because there is no ambiguity, there is no basis to consider the reasonable expectation of the applicants. Without an ambiguity, there is no basis for the application of the contra proferentem principle, nor the reception of parol evidence.