How to handle a home insurance claim dispute

If you ever need to make a home insurance claim, it’s possible that it will go smoothly and you and your insurance company will agree on what has been damaged or lost, how much of it is covered, and what fair value is for those covered losses.

But what if you don’t agree? And what if the difference is significant? Insurance claim disputes are not that common, but when they happen, it can add stress and hardship to what is already a difficult situation. Below, we offer some tips that will maximize the chances that your claim will go smoothly, and outline the process you need to follow if you and your insurer can’t come to a common understanding on your claim.

Read your policy – A home insurance policy is a contract signed by you and your insurer, and almost anything you need to know about your coverage is written into the contract. It will indicate if specific items or particular causes of loss are not covered. These are called exclusions. Some common home insurance exclusions:

Your policy will also say if there are limits on particular types of claims, and what those limits are. Some examples include:

By knowing what you are entitled to claim, and what you are not entitled to claim, you are much less likely to have a dispute with your insurer.

Keep receipts – If you don’t have receipts for items in your home and you have a fire, the only thing the insurance company can do is estimate what the average home would have in it, and pay the claim accordingly. However, if you keep receipts, it’s much more likely that you will be reimbursed the actual value of the lost items (up to any limits in the policy). This may not seem like a big deal, but what if the average dinnerware set costs $70, but your new set that you got as a wedding present is worth $250? Receipts always help. Keep a copy of your receipts somewhere other than your home.

Make a home inventory – Another way to help make sure you get full value if you have to make a claim is to keep an inventory of everything you own. Nowadays, the easiest way to do this is to take a video of everything in your closet, your basement, your cupboards, and narrate what everything is. That way, say you have a fire that destroys the kitchen but leaves the rest of the house untouched, you’ll be able to prove that your $800 Dyson vacuum was one of the items lost. Your inventory, along with your receipts, will help your claim go tickety-boo. Again, keep a copy of your inventory somewhere else so it’s not destroyed in the same event that leads to a claim.

When you suffer a loss, whether it be a fire, flood, vandalism or burglary, once you’ve determined that there is no imminent danger to you or your family, you should do the following:

Together, your receipts, inventory, and footage of the damage will go a long way to making sure your claim goes smoothly.

If you are insured through a licensed insurance broker, then your broker is in your corner, especially if you have a claim. But they won’t know about your claim unless you call them. If you do, based on your description of what happened, they should be able to tell you what to expect, and help you get a fair deal.

The insurance claims process is usually a back-and-forth between you and the adjuster assigned by the insurance company. You will tell the adjuster what happened, and usually submit an itemized list of your losses, with values assigned to each item, and documentation to support. So, for example, if you have a dresser that was damaged beyond repair by water, you might claim $600 for the dresser, with a photo of the damage, and a link to a website selling a comparable dresser for that price. Even before a formal dispute, it’s very possible you and the adjuster may disagree on certain parts of your claim:

Your broker can advocate on your behalf with the adjuster, and will do whatever they can to ensure that any reasonable amount you submit is approved. Your broker may also let you know if they think any part of your claim is exaggerated or not sufficiently supported by documentation. If you don’t have receipts to substantiate certain values, your broker may suggest other ways to document your claim.

Sometimes, in spite of your best efforts, and perhaps your broker’s, you and your insurance company simply can’t agree. In this case, the insurer will provide a letter outlining what their position is, including an itemized list of losses they are willing to reimburse you for. If you don’t agree with the insurer’s position, ask to be referred to the company’s ombudsman/complaints or dispute resolution department. Every insurance company in Canada is required to have one. They will review your position and the adjuster’s position, and may help the two sides come together.

If you are still unhappy after going through your insurance company’s internal dispute resolution process, you can take your dispute to the General Insurance Ombudservice (GIO). This independent agency offers free conciliation, mediation, as well as non-binding adjudication. Again, they will need a letter outlining your position and that of the insurer in question.

Ultimately, if all else fails, you can take your complaint to the provincial regulatory body for insurance. In Ontario, that would be the Financial Services Regulatory Authority (FSRA). And of course, if the discrepancy is large enough to warrant it, you can always consult a lawyer or public adjuster about pursuing legal action against your insurer.