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.

What can I do today to avoid disputes tomorrow?

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:

  • Damage caused by animals or insects
  • Damage considered “wear and tear”
  • Damage from overland flooding
  • Damage due to poor maintenance of your roof
  • Mold

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

  • Jewellery – You may have a $12,000 engagement ring, but if you don’t buy separate insurance for it, your standard home insurance policy will probably have a limit of $1,000 or $2,000 for all jewellery.
  • Cash – There is usually a limit of $200 to $1,000 for cash. If you keep thousands of dollars in a safe or under your mattress and the house burns down, you can only claim up to the limit.
  • Collectibles and fine art – Like jewellery, if you have a valuable stamp or hockey card collection, or a priceless painting, and they are lost in a burglary or fire, you’ll likely only be able to claim something like $1,000 total.

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

Important note: When you have a burglary, fire, storm damage or other loss, the most important thing is your safety and that of your family. Before taking any steps to mitigate financial losses or prepare for a claim, make sure that everyone is out of harm’s way, and tend to anyone who is injured. Don’t put yourself at risk to save your valuables or your home. If your home is not safe, leave. If necessary, call 911 before calling your insurance company.

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:

  • Before doing any cleanup or moving anything, take pictures or video that show the damage. Remember to capture both closeups that may show the extent of the damage to a given item, but also long shots that may be necessary to show where the items were and how the fire, water etc. got to them.
  • Try to save your valuables from further damage. For example, if you have flooding and the water is still rising, move valuables away from the basement. Efforts to mitigate damage will help show that you’re only claiming that which could not be saved.
  • Sort damaged items into two piles: Things to fix, and things to throw out.
  • Once you’ve got enough pictures and/or video, if you want to send items from the “fix” pile for repair or cleaning, keep receipts.

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

Call your broker

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:

  • They may disagree that the item can’t be repaired.
  • They may disagree with the value you’ve assigned.
  • They may request more documentation.

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.

When a dispute arises

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.

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    This is a great article. I am a licensed public adjuster and would really like you to also suggest the services of a public adjuster, not just a lawyer, to help policyholders when they have a dispute with their claims.

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