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An "unfortunate misunderstanding" almost left a Thompson senior $452,000 out of pocket after her insurance company refused to pay up when her house burned down.

Luckily, for the 61-year-old Ashcroft woman, B.C. Supreme Court Justice Leonard Marchand ruled that evidence presented in the case tipped the scales "ever so slightly in her favour."

According to a Mar. 3 decision, the case centres around an Ashcroft property Sharla Dubroy owned but didn't live in.

When the home was destroyed by a fire in January 2019, Dubroy's insurance company refused to pay-up saying the contract was void because she failed to inform them that her brother had moved out of the home and her son and daughter-in-law had moved in.

Dubroy then sued Canadian Northern Shield Insurance Company and CapriCMW Insurance Services for the value of the burned-down house at $452,428.

The case highlights the importance of following an insurance company's criteria to the T.

The decision says in 2016 Dubroy decided to buy her mother's home as a way to help her elderly mom out and give her brother somewhere to live. She signed contradictory mortgage paperwork, one that stated the property was a rental and in another box said the property was her permanent residence.

She took out a joint house insurance policy with her brother, who lived in the home, but incorrectly ticked the box saying she did not own any other property.

Shortly after Dubroy's brother moved out of the home, the insurance company wrote to her asking to renew the policy and tell them if the occupancy of the home had changed.

Dubroy wrote on the envelope "call Capri" but forgot to call.

Several years went by and then in January 2019, the house burnt down.

CapriCMW Insurance refused to pay saying Dubroy hadn't told them about the change in occupants. The company also says it doesn't insure rentals.

Dubroy says the house was not a rental because her family lived in it and didn't pay rent. The insurance company disagreed.

The decision goes into lengthy detail about the insurance contract and how each side interpreted it.

The insurance company in its defence highlighted the multiple mistakes and inaccuracies Dubroy made when she filled in various forms.

However, the Justice goes on to say the insurance company cannot void a policy because of a customer's failure to correct inaccurate information in a renewal notice, and that it can only void a policy if there has been a "material change in the risk" and a customer has failed to inform them.

"Certainly, there were changes in 'occupants' but in my respectful view, there was no change in 'occupancy,' the primary residents continued to be family members of the exclusive owner," Justice Marchand said in the decision.

Justice Marchand found the insurance company didn't prove that the change of people living in the home changed the risks associated with the insurance policy.

The decision says earlier arguments from the insurance company accused Dubroy of making fraudulent omissions in her application for insurance, while Dubroy had filed claims for punitive and aggravated damages saying the company had acted in bad faith. These claims have since been dropped.

The insurance company also focussed on the contradictory information Dubroy gave on the forms.

The Justice says that while there were multiple inconsistencies signed on various forms, the responsibility also lies with the professionals who were assisting Dubroy, given her “chatty” nature.

"It is true that there were disparities between the mortgage and insurance applications that Ms. Dubroy signed," the justice said. "On the spectrum of reasonableness, I put Ms. Dubroy’s conduct well within the reasonable range. The breach was the result of an unfortunate misunderstanding."

While Justice Marchand ruled in Dubroy's favour, he called the case "a very close call."

"My conclusion that Ms. Dubroy acted imperfectly but reasonably tips the scales ever so slightly in her favour," he says.

Ultimately, the insurance company was ordered to pay Dubroy $452,428 plus interest.

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