The refusal of an insurance claim is an issue that many people face at some point during their lives. While insurance adjusters are required by law to thoroughly investigate all claims and come to fair and transparent decisions, disputes arise from time to time, and as a policy holder, you should be fully aware of your rights and responsibilities in the claim resolution process.
Lane’s Insurance of Calgary believes that all consumers have the right to know their options. If you feel that a legitimate claim has been unfairly denied, you do have recourse available to you under Canadian consumer protection law.
Reasons Why Claims May Be Rejected
There are many reasons why an insurance company may reject a claim, with one of the most common being that the basis for the claim was not actually covered under the individual’s insurance policy in the beginning. As in law, ignorance is not an excuse. Just as you can’t argue that Calgary road signs are unfamiliar to you if you happen to be pulled over for a moving violation, you also can’t argue that you didn’t know that your auto insurance did not cover at-fault accidents. It is your responsibility to understand what is and is not covered by your auto insurance or home insurance.
Calgary Car Insurance Claims Denials
Additional circumstances under which your car insurance claim may be denied:
- The person operating your vehicle when damage occurred was not properly included on your policy when you purchased or renewed it
- Your vehicle was not insured in the proper rate class; for example, if you’ve ensured your vehicle for leisure use only but in fact use it to commute to and from your place of employment, your claim may not be valid
- You failed to declare your vehicle in its proper rate class or geographic region when you purchased your policy
In addition to these circumstances, your claim may also be refused if you committed a criminal offense or were engaged in a criminal activity when the damage occurred. Examples of such circumstances include:
- Failure to remain at the scene of an accident
- Impaired or dangerous driving
- Refusal to give police a blood or breath sample when asked
- Deliberately causing death, injury or property damage
- Attempting to avoid arrest or evade a police pursuit
- Using the vehicle for criminal purposes
Note that you do not necessarily have to be convicted of a crime in order for an insurance company to refuse your claim. For example, even if you avoid conviction despite proof that you were under the influence of drugs or alcohol at the time of the crash, your claim may still be denied.
Calgary Home Insurance Claims Denials
Your Calgary home insurance claim may be denied for the following reasons:
- Damage was incurred as the result of an intentional, criminal or negligent action
- There was failure to implement basic safeguards that would have prevented the damage
- Underlying problems with the property that led to the damage were not disclosed to the insurance company when you purchased your policy
Having an auto, home or condo insurance claim denied can be a stressful and worrisome thing. However, there are options available to you if you have grounds to believe that your claim was denied without a legitimate reason.
The Insurance Claim Dispute Resolution Process
Statistics show that only about 1 per cent of people who have insurance claims refused actually contest the insurance company’s decision, but of those who do make an appeal, about 50 per cent of them eventually reach some type of settlement. If you’ve had a claim refused and you’re wondering what to do about it, here is the process recommended by the Insurance Bureau of Canada (IBC):
- Ask your insurance company for an explanation. The first thing you should do is request a written explanation from the insurance company, detailing their reasons for refusing your claim. It is important that you have this documentation on file in case it becomes necessary to take your claim to independent arbitration.
- Discuss your claim with the insurance company’s ombudsperson. All Canadian insurance companies are required to provide a dispute resolution department and a dedicated official whose role it is to liaise with customers submitting complaints or appealing refused claims. If you have a legitimate basis for believing your claim was errantly refused, the ombudsperson has the authority to overturn the adjuster’s initial decision.
- Contact your local General Insurance OmbudService. If you are unable to resolve your dispute directly with the insurance company, contact your local GIO office.
- Contact the Alberta Superintendent of Insurance. If the GIO cannot help you receive a legitimate claim that has been refused, contact the Alberta Superintendent of Insurance. The Canadian insurance industry is heavily regulated, and insurance companies are subject to stiff penalties if they are caught refusing legitimate claims.
Lane’s Insurance is a Calgary-based brokerage with very high rates of customer satisfaction. If you’re unhappy with your current insurance company, or if you’re interested in getting a free, no-obligation quote for a comprehensive range of insurance products, please contact a Lane’s Insurance representative to arrange a consultation.
