Introduction
Guaranteed Rebuilding Cost (“GRC”) coverage sounds like a gold standard – insurance that promises to rebuild a home regardless of price. But in Emond v Trillium Mutual Insurance Co., 2026 SCC 3 (“Trillium”), the Supreme Court of Canada made clear that even the strongest‑sounding promises only go so far.
Background
The dispute in Trillium arises from a common issue in insurance law.
On one hand, GRC endorsements assure policyholders that the insurer will pay repair or replacement costs, even if these exceed the policy limit. Many insureds interpret this as a guarantee that the insurer will fund whatever is necessary to rebuild.
On the other hand, accompanying many GRC endorsements are compliance cost exclusions (“CCEs”), which remove coverage for increased costs associated with meeting regulatory requirements such as zoning, demolition, repair, construction and so on.
