Tansey v. Allstate Insurance Company of Canada, 2026 ABKB 525 is an Alberta property insurance decision addressing whether an insurer must replace all exterior siding when only part of the siding has sustained direct physical damage but an exact colour match is no longer possible due to sun bleaching.

The case provides guidance on the meaning of “property of like kind and quality”, distinguishes situations involving a substantial and permanent colour discrepancy in siding from those involving minor or temporary differences, and provides guidance on balancing the principles of indemnity and betterment in replacement policies.

The focus of this article is: When will a partial siding replacement involving mismatched colour fail to meet a policy’s requirement to repair or replace damaged property with “property of like kind and quality”?

Background and Trial Decision

A July 2023 hailstorm damaged the north and west siding of Kyle Tansey’s Calgary home. Allstate proposed replacing only the siding directly damaged by the hail. The existing vinyl siding was significantly sun‑bleached, such that the newly installed siding of the same type created a noticeable colour mismatch visible from the street, affecting the property value.

Justice L.L. Burt of the Alberta Court of Justice found in favour of Tansey, ordering Allstate to replace the siding on all four walls. She concluded replacing only two walls with materially different-coloured siding would not restore the property with “property of like kind and quality”. Allstate appealed.

Relevant Policy Provisions

This was a home insurance policy which provided coverage for:

“You are insured against all risks of direct physical loss or damage subject to the conditions of this policy and the following exclusions: …” 

Wear and tear and deterioration were excluded from the policy, though those provisions were not reproduced in the decision.

The policy further provided:

“We will pay for insured loss or damage up to your financial interest in the property, but not exceeding the applicable amount(s) of insurance for any loss or damage arising out of one occurrence.”

With respect to the insurer's options following a loss, the policy stated:

“In the event of loss, we have the option of taking all or part of the covered property at the agreed or appraised value. We have the option to repair, rebuild or replace the damaged or destroyed property with property of like kind and quality within a reasonable time.”

Allstate's Argument on Appeal

Allstate argued the policy was a contract of indemnity and was not intended to provide enhancement or betterment. The insurer submitted that coverage extended only to the portions of siding that had sustained direct physical damage. In its view, the policy did not require Allstate to replace siding that had not itself been damaged by the hailstorm simply because the replacement siding would not perfectly match the existing siding.

Allstate further argued the colour variation in the existing siding was attributable to sun bleaching, wear and tear, or deterioration – conditions excluded under the policy – and the insurer should not be required to remedy those pre-existing conditions.

The Court of King’s Bench Decision

Justice Carruthers dismissed the appeal and upheld the order requiring full siding replacement.

The Court considered the principle of indemnity and the nature of the policy's replacement-cost coverage. Although indemnity is a central objective of insurance, replacement-cost coverage can provide an insured with more than mere compensation for the depreciated value of directly damaged property – it can allow for some betterment. As the Court noted replacement-cost coverage allows an insurer to rebuild or replace damaged property with something equivalent to what was lost. If spot repairs resulted in a loss of property value, the spot replacement would not result in something of equivalent value to what was lost. 

In this context, the concept of “like kind and quality” was not limited to the material composition of the siding. The Court concluded that leaving the homeowner with significantly mismatched exterior siding could diminish the value of the property and would not satisfy the reasonable expectations associated with the policy's replacement-cost coverage.

The Court rejected the argument that standard policy wordings excluding wear and tear and deterioration operate to prevent the need to replace these materials, as the aesthetic damage of the mismatch was caused by the hail. It further rejected the argument the insurer was only responsible for the replacement of a damaged part as they found the additional condition regarding parts was not applicable to the replacement of siding.

Discussion:

It is important to appreciate that Tansey does not establish a blanket rule that an insurer must replace all siding whenever only part of a dwelling's siding has sustained damage. It is a matter of assessing the replacement value in considering the damage. This case was distinguished from other cases where there was only a slight difference in colour or where the difference in colour might reasonably be expected to disappear over time. In those cases, the insurer did not have to replace all of the siding.

In the case of Tansey it was significant that (1) the existing siding had changed colour significantly over time, (2) the Insurer did not provide evidence that the new and old siding would eventually become the same colour, which they might have been able to do as they were able to locate the same type of siding, and (3) replacing only the damaged areas would result in a substantial colour discrepancy visible from the street and would result in a loss of property value. If these facts were otherwise, the Insurer may not have had to replace all the siding.