Lockwood v. Moreira

In this matter the insured’s pleasure craft was broken into by vandals who used citronella candles in the interior of the vessel. As a consequence, a thick sooty substance covered the interior of the vessel. The assured made a claim under the insurance policy and the insurers responded by having the interior of the vessel cleaned. The assured was not satisfied with the first cleaning so the insurers authorized a second cleaning. The assured was still not satisfied and took the position that the only way the vessel could be restored to its original condition was by removing the deck and replacing the interior at a cost of $100,000. The trial judge held that the insurer’s obligation under the policy was to restore the boat to substantially the same condition it was in before the vandalism, which had been done. The insurer was not required to restore the boat to the exact condition it was in before the vandalism. The trial judge further rejected a claim of bad faith against the insurer, holding the insurer had responded promptly to the claim and without malice. The insured appealed. The Ontario Court of Appeal in a brief endorsement noted that they agreed with the trial judge that the boat "was substantially repaired " and dismissed the appeal.