Woman left hanging by insurance company after her spouse causes major damage to home
Teri-lynn Robison is facing a very real prospect of bankruptcy. Not because of poor financial choices she has made, or due to the strain of a failing company she operates. Nothing like that. Robison's dilemma is a tragic one, and one that could have been avoided with a different type of insurance regulation.
It all began last year. Following a heated argument with the man she had been married to for 11 years, Robison told him definitively that their relationship was over. As she stood in their bedroom, packing up his clothes, he did the unthinkable and entered the room, armed with a barbecue lighter he then used to set the bed on fire.
Robison thankfully escaped unscathed, and her spouse is now serving a two-year sentence for arson; but her troubles are far from over. Costs for repairs to her house have been pegged at upwards of $160,000. Her insurer, Allstate, has given her $10,000, but is denying the bulk of her claim based on a stipulation it has in its home policy. Because Robison's husband was also insured under the policy and responsible for the damages, the intentionality and criminality of his actions disqualified her from being covered by the policy.
Despite the apparent unfairness of this reality, it is within Allstate's legal boundaries to structure its policies this way. Ontario insurers have no obligation under the law to support victims when another policy holder has intentionally caused damage or done so as a result of criminal activity. That is not the case in British Columbia, Alberta, Manitoba, or Quebec, where an insurer in this type of scenario would be required to pay out a claim to the "innocent co-insureds." Even then, only half of the payout—or the proportional equivalent of it—can be under a legal obligation to be paid by the insurer.
After having this incident come to light, both Allstate and Ontario's Minister of Finance have said that they will be looking into changes that could prevent this type of situation from re-occurring.