TORONTO -- A Mississauga couple says they were ecstatic when they moved into their first detached home last fall, but on Christmas Eve they got a present they didn’t want.

“We saw water gurgling up from underneath our basement floor and that's when we thought this is a serious issue," said Derek Boyko.

Boyko and his wife Michelle Jagdat said there was water coming up through their driveway as well as their basement and they couldn’t find out where the source of the flooding was coming from.

However, they said when they contacted their insurance company, Allstate Insurance Company of Canada, they were told they would be covered.

“We called our insurance company and they said 'don't worry we will come and take care of the problem,'" said Boyko.

When they couldn't find the source of the flooding they called the City of Mississauga and it was discovered that it was a burst service line which carries water from the street to their home.

When that was determined, they were told by their insurance adjuster they were not covered for that type of water damage and their claim was denied.

“We were told we had the best policy based on our location, but that our location and postal code excluded us from any additional water coverage, so we were told we were not covered,” said Jagdat.

The couple says when their claim was denied they had to pay $8,000 to replace the water pipe from the street to their home and their previously finished basement is now in need of expensive repairs.

Boyko said, "Why are we paying all this money for insurance when they won't even cover this." Jagdat added, “I’m just completely frustrated with this entire process."

An Allstate Insurance spokesperson told CTV News Toronto, “Allstate takes great pride in our high standard of customer service and ensures that all customers are provided with clear documentation detailing their coverage. Allstate is still looking into this matter and the customer’s claim is still open.”

After being denied by Allstate, the couple contacted the General Insurance OmbudService, an independent and impartial agency that resolves disputes between insurance companies and their clients.

Their case was reviewed and the OmbudService sided with the couple. Three months after their basement flooded they received a cheque from Allstate for $24,000.

“Actually we were told ‘no’ by so many people so many times, when we actually saw a figure ($24,000) we were very happy,” said Jagdat.

Following the settlement the Allstate spokesperson told CTV News Toronto that “after a thorough investigation” into the incident, it decided to pay out the claim.

It is good to know if you have a dispute with a company over home, auto or business insurance you can file a complaint with the General Insurance OmbudService and have it reviewed through an independent process.

It’s a free service and disputes are often resolved in a timely manner.