An Ontario judge has ordered Intact Insurance Company to pay $17,700 in compensatory damages for breaching its duty of good faith in handling a claim over two outbuildings that collapsed under heavy snow near Thunder Bay.
The ruling was a mixed result for property owners George Ward and Kelly Gallant. Justice F. Bruce Fitzpatrick rejected their claims for $180,000 in punitive damages and $35,000 for mental distress, along with their demand for immediate payment of a $237,000 replacement-cost difference.
In Ward v. Intact Insurance Company, 2026 ONSC 5425, released September 24, 2026, the Superior Court of Justice found problems with delayed payment, temporary storage and disclosure during demolition negotiations. But the judge found the insurer’s conduct did not meet the threshold for punitive damages.
The duty of good faith requires insurers to handle claims promptly and fairly, including their investigation, assessment and attempted resolution. Punitive damages require misconduct markedly beyond ordinary standards of decent behaviour.
Three claims-handling breaches
The wood-frame building and Quonset hut collapsed in April 2022. Intact confirmed coverage the following month. The parties later used an appraisal process under Ontario’s Insurance Act to establish the buildings’ actual cash values and replacement costs.
The November 2024 appraisal set actual cash value at $180,000 for the wood-frame building and $78,000 for the Quonset hut. Replacement costs were $300,000 and $195,000 respectively. Intact paid the combined $258,000 actual cash value in December 2024.
Intact argued that it could legitimately await the appraisal because the amount was disputed. It also pointed to the pressure created by the catastrophic snowfall, difficulty obtaining reasonable quotations, contractor visits and interim payments.
Fitzpatrick accepted that the unusual snow conditions and northern construction season explained some early difficulties. He nevertheless found the insurer had not adequately explained why an actual-cash-value payment had to wait until the appraisal ended. The failure to make a reasonably timely payment for the wood-frame building breached the duty of good faith.
The court also faulted Intact for failing to arrange timely storage for contents left exposed after the collapse. Ward had asked for shipping containers or off-site indoor storage. Although temporary storage costs were settled in August 2023, the judge said the issue should have been addressed much earlier.
A third breach concerned demolition negotiations. Intact paid $74,000 in September 2022 to settle demolition and debris-removal costs, including contents handling. It did not first disclose higher demolition quotations it held. The court found that information was relevant to Ward’s agreement to undertake the work himself.
The damages comprised $9,000, or five per cent of the wood-frame building’s actual cash value; $3,700, or five per cent of the demolition payment; and $5,000 for the storage failure. The resulting $17,700 award was compensatory. The judge found the conduct was not malicious, oppressive or high-handed.
Future progress payments remain conditional
The replacement-cost ruling separately addressed when further money became payable. The owners argued that their decision to rebuild entitled them to the full difference immediately and that Intact’s bad faith relieved them of further policy requirements.
Fitzpatrick found the policy unambiguous and rejected both arguments. Intact had acknowledged coverage and made payments; its conduct did not amount to repudiation of the insurance contract.
By trial, reconstruction of the wood-frame building was underway, but some actual-cash-value funds remained and supporting invoices or estimates had not been submitted. The judge said progress payments would become payable once the owners showed that the actual-cash-value funds had been exhausted on replacement and supplied receipts or reasonable estimates for the next construction steps.
Demolition of the Quonset hut remained unfinished. The court held that the $74,000 settlement relieved Intact of further demolition payments and that an intention to rebuild did not establish a present entitlement to replacement funds. The dismissal therefore concerned the immediate claim before the court, while the wood-frame progress-payment route remained available.
Ward’s mental-distress claim failed because the judge found the evidence did not establish compensable suffering beyond ordinary upset and frustration. The reasons do not impose a blanket requirement for a psychiatric diagnosis.
The court ordered Intact to pay the $17,700 to the plaintiffs and dismissed the other claims. The reasons refer to a prior costs agreement but do not set a costs amount.
