The blaze that ravaged Antonina Gladkova’s home at the start of 2024 marked the onset of a prolonged period filled with frustration and financial strain, costing her tens of thousands of dollars. She now aims to alert other homeowners regarding the intricacies of their mortgage contracts related to insurance claims.
However, Gladkova described the fire as “just the first nightmare,” adding, “It escalated from there.”
Initially, she felt relieved by the straightforward dealings with her insurance provider, which agreed to cover the entire cost of reconstructing her half of the semi-detached house in Georgetown, Ontario.
Unfortunately, her mortgage lender failed to release the insurance funds in line with her contractor’s billing, leaving her and her boyfriend tens of thousands of dollars short and requiring them to secure a private mortgage to address the financial gaps and maintain construction amidst costly delays.
“We were absolutely outraged,” she expressed.
While it is customary for insurance payments to be disbursed in phases through a homeowner’s mortgage lender, legal professionals indicate that scenarios similar to Gladkova’s are becoming increasingly frequent. This has prompted her to share her experience to help others avoid similar pitfalls.
“The entire system is flawed. That’s why I want people to be informed… be prepared,” she stated.
‘A chicken and egg situation’
In February 2024, a fire erupted in the adjacent half of Gladkova’s semi-detached home. Tragically, her neighbor lost their life in the fire, which then spread to her side, completely annihilating it. Gladkova, who had originally occupied the residence, had been renting it out for several years after moving in with her boyfriend.
Just over a year after the incident, the insurance payout to reconstruct the home was approved at slightly more than $508,000. With a mortgage in place, the lender, Simplii Financial, was tasked with disbursing the funds.
The couple’s contractor requested an initial payment of $101,600; however, according to bank statements reviewed by CBC News, Simplii only released $25,000.
After the couple raised concerns, Simplii, a subsidiary of CIBC, provided an additional $25,000 as a “one-time exception.” Still, they were left 50% short.
A fire ignited on the neighboring side of Antonina Gladkova’s semi-detached house in Georgetown, Ontario, in February 2024. It extended to Gladkova’s portion of the property, completely destroying both residences. (Mehrdad Nazarahari/CBC)
Gladkova explains that the initial procedure required the bank to release funds based on invoices from the builder and verification of completed tasks. However, this necessitated the contractor—who she claims was appointed by the insurance company—to finance the work upfront.
“You cannot construct without the funds. It’s like a chicken and egg situation,” Gladkova noted.
The couple lodged a formal complaint with Simplii, asking the bank to release an extra $51,600 to settle the invoice fully and continue construction. The bank denied their request.
Due to insufficient funds to cover the difference, they opted for a private mortgage with a 10% interest rate.
Following their formal complaint, documents indicate Simplii modified its approach to release funds based on progress reports of completed work. For instance, if 20% of the work was accomplished, Simplii would provide 20% of the total insurance payout.
However, correspondence between Gladkova and Simplii reveals that the bank began calculating based on the first insurance cheque rather than the total insurance amount, resulting in the couple being consistently about 35% short in payments to the contractor.
Antonina Gladkova’s property was entirely devastated in the fire, and her insurance company funded the reconstruction. (Submitted by Antonina Gladkova)
Eventually, Simplii disbursed all funds, including an additional exception payment this past April to cover a shortfall for the third construction invoice.
The reconstruction was finished this past June, about six months later than the timeline outlined in the construction agreement.
Gladkova reports that the couple has paid approximately $15,000 in interest on the private mortgage and additional thousands in setup and legal fees.
There remains an outstanding amount of roughly $19,000 owed to the contractor due to delays caused by the couple’s inability to make timely payments, according to Gladkova.
She states that the combination of the private mortgage and the slow pace of insurance payouts has caused the debt to “accumulate and soar rapidly.”
Simplii’s response
Simplii spokesperson Kira Smylie stated that the company understands the difficulties customers face when dealing with property damage, emphasizing that “wherever feasible, we strive to offer flexibility to our clients, and we did so in this instance.”
Smylie also mentioned that Simplii’s mortgage agreements grant the bank the authority to dictate how insurance proceeds are utilized.
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“Before finalizing payment arrangements with a contractor, clients should verify the payment schedule with us to make informed choices,” she added.
Gladkova aims to caution others regarding the ambiguous language often found in mortgage agreements. She believes that had the bank informed them of their responsibility for any funding shortfalls, they would have sought alternative solutions.
How to protect yourself
Typical mortgage terms state that insurance funds must be paid to the lender, which then disburses the money according to a set schedule since the lender has an interest in the property and wants to ensure the funds are utilized for rebuilding, as explained by real estate and home insurance attorneys.
Fy Virani, the founder of Virani Law, specializing in home insurance claims, noted that occurrences like Gladkova’s—where payment schedules do not align—are increasingly common. He attributes this trend to lenders tightening control over insurance disbursements, especially as total loss claims from fires and floods rise.
Fy Virani, a home insurance claim lawyer and founder of Virani Law, indicates that he is encountering the issue of misaligned insurance payment schedules more frequently. (Submitted by Fy Virani)
“We’re increasingly witnessing total losses due to fires and floods,” he stated. “Consequently, a communication gap arises between entities that are not accustomed to being coordinated.”
Virani advises property owners to foster transparent and direct communication with lenders, contractors, and insurance providers to ensure that all parties are aligned and that payment timelines correspond before construction commences.
“Once money starts moving, it’s very challenging to resolve issues,” he warned.
Filing complaints
At the close of 2025, Gladkova lodged a complaint with the Ombudsman for Banking Services and Investments (OBSI), an independent Canadian entity that mediates disputes between banks, investment firms, and customers.
She sought compensation from Simplii for the interest accrued on the private mortgage and an additional $4,000 in related fees.
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According to Gladkova, the OBSI concluded its investigation last June, determining that although Simplii was not liable for the additional costs incurred and was not bound by the agreement made with the contractor, the bank did cause significant distress and inconvenience by failing to inform the couple that they might require extra financing to finalize the project.
The OBSI suggested that Simplii provide the couple with $500 in compensation, an offer they declined.
“It felt like a slap in the face,” Gladkova remarked.
In their statement, the OBSI noted that their complaint resolution process is confidential and cannot comment on individual cases.
Gladkova has since submitted a complaint to the Financial Consumer Agency of Canada, which oversees federal external complaint organizations, including banks and the OBSI. She hopes to see modifications in mortgage agreements so that banks will directly disburse insurance funds to contractors.
“Hopefully, this can be rectified,” she concluded. “No one should have to go through this as it was life-altering.”