OK - I checked with the "experts" at the brokerage where I spend my
An insurance company CAN refuse to pay damages in the case of grossly
inadequate modifications made by the homeowner materially being at
fault in a claim if he knew, or should have known, that what he did
was dangerous and/or illegal.
They would have to have a very good case in order for their refusal to
pay to stand up in court - but they own thair lawyers - and you rent
yours. Do the math.
The courts could find in your favour. They could find in the insurance
company's favour, or they could award substantually reduced
compensation for your damages.
In the case of a payout for damages caused by an incompetent
contractor, they would pay, then go after the contractor or his
insurance company to recover their expense.
In Canada, and Ontario in particular, it is very rare, but not unheard
of, for an insurance company to take this route.
Part of the legalese involved is whether the person (homeowner) "knew
or should have known" that what he did was likely to cause damage.
ANother is whether his actions "materially" contributed to the damage.
One Ontario case that was VERY close to being successful on the
insurance company's part involved an engineer who decided to refinish
his hardwood floors with a very flamable finish. In large letters on
the can it stated that ALL SOURCES OF IGNITION MUST BE REMOVED from
Said engineer did not shut off the gas waterheater, and the electronic
ignition ignited the fumes, flattening the house and damaging several
The insurance company thought they had a good case - the guy WAS an
engineer - and SHOULD have known to turn off the water heater before
starting the job. His carelessnes was the ENTIRE cause of the damage,
meeting the "materially" clause.
The court came to the conclusion that just because the guy was an
engineer didn't mean he was necesarilly "smarter than the average
bear" - perhaps he really did not undestand that a gas waterheater
could ignite at any time, or indeed that it had an open flame when
running - so they ordered the insurance company to pay.
THAT one could very easily have gone the other way.
The "expert" was not aware of any recent cases where restitution was
denied - but MANY cases where renewal of insurance was not offered, or
initial coverage was not offered.
If an insurance company smells a significantly elevated risk, they run
the other way as quickly as they can - they are not in business to
Howvever,my daughter,also a registered insurance broker, said they
"pay for gross stupidity ALL the time". Theft from unlocked houses? no
problem.Theft from unlocked cars? All the time (except in some high
crime areas where an exclusion may be put on a policy, voiding theft
insurance if it can be established that the home/vehicle was not
locked, a car was left running anattended, or keys were left in the
In "general insurance" - (not automotive, life, or health) a sizeable
percentage of claims fall under that category (gross stupidity)