Beyond Repair: Valuing Residential Property Loss In Litigation

As published by Risk Management Counsel of Canada on September 25, 2025.Click here to view the originally published article.

When a residential property is destroyed due to negligence, assessing damages is a critical factor for insurers in evaluating litigation risks. This can be particularly important when an insurer has provided coverage to replace a destroyed residential property and is contemplating the extent they could recover damages from the wrongdoer.

The plaintiff will commonly seek damages to replace the property. In contrast, the defendant typically argues the plaintiff should only be entitled to the decrease in value of the property (diminution in value), or that the damages awarded should be reduced to account for improvements to the property resulting from replacement (betterment).