Chances are almost 100% the insurance company won't do anything, unless Canada has a law requiring them to.
Did you have a home inspection prior to purchase?
The liability of the prior owner is directly related to the disclosure laws in your province. In the U.S., some states require the owner to disclose defects, others do not. Usually, if disclosure is required, you have to prove they knew about it. If not, you have to prove they misrepresented the house by saying it didn't leak AND they knew it did.
As far as fixing it, get a structural engineer in there to see what the problem is, and (s)he would tell you what is needed from there.
