January 25, 2011 by Canadian Underwriter
A rare collection of beetles is covered under a “condominium comprehensive” policy, the Court of Quebec found in 2009, prompting McMillan LLP lawyer Hartley Lefton to caution brokers and clients to review their condo insurance carefully.
In a January 2010 article for the International Law Office, Lefton noted that while residential insurance is a fact of life, “few take the time to review their insurance policies until it’s too late.”
Specifically, he noted the Court of Quebec’s 2009 decision in Zoran Zlatic v. ING Assurance.
Zlatic, a tour guide and condo resident, had a hobby of collecting rare species of beetles from around the world. His collection included 15,000 beetles from places such as Serbia, Montenegro and Mexico.
He preserved his captured insects and laid them out in trays, later mounting them with pins on cardboard or plastic.
Without a storage locker of his own, Zlatic arranged with the condo manager to lease a storage room that was part of the common areas of the condominium. He kept his beetle collection in this storage area.
But the lease arrangement fell through. Zlatic was able to obtain an extension on his lease while he was away on business in September 2002.
But while Zlatic was away acting as a tour guide, the condo manager left a letter by Zlatic’s door, requiring Zlatic to vacate his belongings from the common area immediately. When he arrived home, some of his belongings were stacked in the hallway in such a way that his rare beetle collection was ruined.
Zlatic claimed his policy limit of $53,045 for the damage. But his insurer denied the claim, saying the rare collection of beetles was not “usual to the ownership or maintenance of a unit,” as is stated in the policy.
The Court of Quebec found hobby collections generally – including Zlatic’s beetle collection – are covered under the comprehensive condo policy.
Nevertheless, ING noted a policy exclusion for “fragile or brittle articles.” The court agreed the beetle collection would fall under this exclusion; at the same time, it noted an exception to the exclusion for “vandalism or malicious acts.”
The court said this exception applied in part because of the way in which Zlatic’s belongings were carelessly piled in the hallway of his condo unit.
The court also noted the manager knew Zlatic would not be able to react to her written warnings to vacate the storage area: he was away at the time she placed her letters next to his door. (Zlatic told the manager before his trip that he would remove his belongings at the end of his lease extension, when he returned from his trip.)