Insurance company won't cover Falmouth, N.S., house ruined by sinkhole

A family that lost its house to a sinkhole in Falmouth, N.S., is planning legal action against their insurance company because it won't cover the cost of the home.

"I just feel like they worked very hard to find a way not to cover us," Heather Strickey said Saturday.

Strickey and her daughter were home the morning the sinkhole opened up under their Mountain View Drive house on Sept. 3, 2017.

Police told them they had to grab whatever they could because there would be a chance the family would never be able to get back into the house.

"In my head I was like, we just wait for the insurance — this is awful, but this is definitely something we can deal with because we've been paying insurance for as long as we've owned that house," said Strickey.

"We've taken maximum insurance and in our insurance we're covered for house collapse, and our house collapsed into a hole."

But 72 days after the incident, the Strickeys learned Wawanesa Mutual Insurance Company, a Winnipeg-based Canadian insurance company, would meet with the family and tell them they would not cover the house.

Strickey said the company brought in experts and machinery from Alberta and Ontario and determined the house collapsed because of "movement of earth" — an exception in their insurance policy.

"Movement of earth, as far as we know, is landslides, snow slides and earthquakes — because there's nothing denying sinkholes, or any type of hole, in our insurance policy," she said.

CBC News contacted Wawanesa, but the company said it would not comment on the Strickey situation to guard the privacy of its clients and that family has chosen to be represented by legal counsel.

David Hutlin, a spokesman for the company, said in an email that if a policy holder disagrees with a decision, they can complain to Wawanesa through the company's website.

But if that isn't enough, "they may contact the Office of the Ombudsman for an independent review."

"Additional options include contacting The General Insurance Ombudservice (GIO) and the Financial Consumer Agency of Canada (FCAC)," Hutlin's email stated.

Strickey said the family is looking into contacting the ombudsman, but will consult a lawyer first.

The property had been assessed at $531,000 and today is evaluated at $1,200. The house was demolished in January 2018.

Strickey said the family avoided media coverage in the months following the collapse, and the subsequent dispute with the insurance company, hoping the issue could be resolved privately. But "we filed papers and it's going to have to go before the courts."

They're hoping to recover the value of the house that was lost and the purchases they needed to make following the collapse.

"For 10 months, it was like we were nomads. We were moving from place to place," she said.

Strickey said Wawanesa agreed to remove possessions from the house and those items ended up in multiple different storage lockers in Windsor, Hantsport and Kentville. 

By July, King's-Edgehill School, the private school where Strickey and her husband work, had a house on its property for the family to use.

Still making mortgage payments

Even though the house is long gone, the family is still paying a mortgage.

Strickey said they were able to come to an agreement with their bank so they could be out of their mortgage in five years, but she said this arrangement "ruined our credit rating."

"So even if we wanted to buy a new house, we can't because our credit rating is now non-existent. We have to start up from scratch again, even though we both have good jobs, we've never missed payments," she said.

"It also changed the way we live the rest of our life. We had put so much money into that house and it's like you took $250,000 and set it on fire. It's gone."