PEI couple fights for “fair” payout from insurer 2 years after fire

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Lora and William Stewart stood in the snow on March 9, 2023, watching their 6,400-square-foot Montrose, P.E.I., home burn to the ground as firefighters battled the blaze.

Their insurance adjuster arrived on the scene that same day. But instead of offering support, the couple said they were handed a copy of their insurance renewal policy effective April.

Lora recalls the adjuster told the couple something along the lines of, “Too bad your house didn’t burn down after (April ). It would be worth over a million dollars.”

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Lived in barn

The comment was the first in a series of what the couple described as bewildering and frustrating interactions with P.E.I. Mutual, their insurance provider. More than a year later, the Stewarts are still fighting for better compensation, living in uncertainty and struggling to rebuild their lives.

The Stewarts’ home, which sat on a property that housed nearly 300 animals, was insured for $935,000. Before getting insurance, the couple said they requested the best services available, and they specifically requested insurance that would cover everything in case a terrible situation happened.

After the fire, they were told their living expenses would be covered, and they moved into a neighbour’s vacant home. But after two months, P.E.I. Mutual wouldn’t pay the rent, forcing the Stewarts to move out. So, they cleaned out their donkey’s stall and built a makeshift bedroom in the barn.

“We lived in the barn for about 40 days,” William said. “It was exhausting.”

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Housing struggles

P.E.I. Mutual Insurance eventually agreed to the Stewarts to buy a trailer to live on the property and they would get reimbursed. They said they sold $30,000 worth of personal belongings — including tractors and equipment — for less than their value to afford a used trailer. Eighteen months later, the insurance company reimbursed them $13,500.

“The trailer was mouldy and barely livable, but it was all we had,” Lora said.

They lived in the trailer for months until P.E.I. Mutual Insurance agreed to resume paying rent for the neighbour’s house, where they continue to live. Even so, they said the insurance company has repeatedly threatened to stop paying rent, leaving them in constant uncertainty.

When it came to contents insurance claims, the couple said they were told they could only claim 50 per cent of their policy’s stated value.

“I was like what are you talking about? It states this much, and then you have something happen drastically, like our house burning, which was a nightmare, and they tell you that,” Lora said.

Insurance bureau

The Guardian contacted P.E.I. Mutual Insurance Company for an interview, but the company said it can’t comment because the matter is in the midst of litigation.

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A spokesperson for the Insurance Bureau of Canada said in an email to The Guardian that there are ways for homeowners to escalate claims disputes. The email said that as a first step, policyholders should ask their broker, agent, company representative or claims adjuster for an explanation.

“Insurance policies are legal contracts that specify the rights and responsibilities of both parties, however, sometimes misunderstandings can occur,” the email said.

The email also said if a matter is not resolved with the insurer’s complaints liaison officer, policyholders can request a final position letter and contact General Insurance Ombud Service (GIO,) an independent consumer dispute-resolution system for the insurance industry. P.E.I. Mutual Insurance, however, does not appear as a member on the organization’s website.

Contracted coverage

According to a replaced copy of their policy reviewed by The Guardian, the Stewarts’ dwelling was protected for up to $935,000, personal property replacement cost of $467,500 and additional living expenses of up to $187,000.

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Lora said upon signing the policy, their expectation was they would receive this exact coverage in the event of their home being destroyed. Instead, they were told they could only claim 50 per cent for personal property replacement and 20 per cent for additional living expenses. So far, they said they have been approved for and given a cheque of $185,403 for personal property replacement.

They said they were also informed they had one year to rebuild their home or risk losing 75 per cent of their coverage. Despite submitting rebuilding plans three times, they said P.E.I. Mutual Insurance has refused to release $653,500 in dwelling coverage unless the Stewarts secure a new mortgage for the amount of $281,500 — the figure the company has already paid out for a mortgage.

“The bank is not going to pre-approve a mortgage on a house that’s not there. There’s no building. So, you can get a building loan, and it will eventually get to a mortgage. But in this case, they cannot pre-approve the mortgage on something that’s not there,” William said.

Rebuilding efforts

The Stewarts’ property was more than just their home to them — it was a community hub. They operated a petting farm that welcomed hundreds of visitors, many of them children.

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Lora said they struggled to keep up with caring for the animals because of their financial uncertainty, so they were forced to sell all the animals in their care.

“It was my life. I live for my animals,” Lora said.

They have since sought legal help and are working towards taking the matter to court. They said they have spent over $40,000 in legal fees and have found themselves in debt that they were never in prior to the fire. They are looking forward to rebuilding all they have lost. How long that will take, however, depends on decisions outside their control.

Vivian Ulinwa is a reporter for The Guardian in Prince Edward Island. She can be reached at [email protected] and followed on X @vivian_ulinwa.

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