Denied insurance claims

Why do insurance claims get denied in Ontario?

Most denials fall into a few categories: the loss falls under an exclusion, the coverage was never on the policy, a policy condition was not met, the claim was reported late, or the information given when the policy was arranged did not match the facts. Understanding which category applies determines what, if anything, can be done next.

The distinction matters. A claim denied because a coverage was never purchased is a different conversation from one denied over the interpretation of an exclusion: the first is a gap, the second may be arguable.

What should I ask the insurer for?

Ask for the decision in writing, with the specific policy wording it relies on and the facts the insurer says bring the claim within that wording. A denial that cites a clause is something you can check against your own policy document; a denial given only over the phone is not something anyone can review.

This single request changes the nature of the conversation. It moves the discussion from an opinion to a document, and documents can be examined.

Ask for the decision in writing, and ask which specific policy wording it relies on. A denial that names a clause can be checked against the policy; one given only over the phone cannot be checked at all, and it is much harder to escalate later without a written record of what was decided and when.

What are the escalation routes in Ontario?

Every insurer licensed in Ontario must have an internal complaints process and a designated complaints officer or ombudsman. If that does not resolve matters, the General Insurance OmbudService provides independent dispute resolution for home, auto and business insurance. Legal advice is a separate route, and accident benefit disputes have their own tribunal.

Disputes about statutory accident benefits after a collision go to the Licence Appeal Tribunal rather than through the general complaints route.

These processes take time. They are, however, free to use, and using the internal process first is normally a prerequisite for the external one.

What can a broker do about a denied claim?

A broker can obtain and explain the reasoning, check the denial against the policy actually in force, provide the underwriting file where relevant, and put a case to the insurer where the facts appear to have been misread. What a broker cannot do is overturn the decision. That authority sits with the insurer.

Being clear about that boundary is more useful than optimism. What advocacy achieves is that the decision is made on the correct facts and the correct wording, and that somebody is pressing for an answer.

What counts as misrepresentation, and why does it matter so much?

Misrepresentation means the information given when arranging or renewing the policy did not match the facts: the address the vehicle is actually kept at, who drives it regularly, the use a property is put to, or the nature of a business. Ontario insurers can void a policy for material misrepresentation, which is more serious than declining one claim.

Voiding treats the policy as though it never existed, which means the premiums paid bought nothing. That is why brokers ask what can feel like intrusive questions about garaging address, occupancy and use.

It is not usually deliberate. Circumstances change (a child moves home and starts driving the car, a property is rented out, a business adds a service line) and nobody thinks to mention it. Telling your broker when something changes is what prevents this.

What records should I keep when disputing a decision?

Keep the denial letter, your policy document including any endorsements, the original claim submission, and a dated log of every conversation with the insurer. Keep the evidence of the loss itself as well (photographs, receipts, quotes and reports) because a dispute may be reviewed by someone who has never seen the property.

Ombudsman services and internal complaints processes work from documents. A well-organized file is not a formality; it is most of what the reviewer will actually see.

Put your position in writing rather than only raising it by phone. A written summary of why you disagree, tied to the specific policy wording, is a document that has to be answered.

Can Sutherland Insurance move a policy after a denial?

Sometimes, and sometimes not. A denied claim, and particularly a policy voided for misrepresentation, becomes part of the history other insurers consider. A broker can approach the markets available and set out what each is prepared to offer, but the outcome depends on the reason for the denial and on the insurer's own appetite.

Being straightforward about what happened produces better results than leaving it to be discovered. Insurers find out, and a disclosed history is treated differently from an undisclosed one.

What is the internal complaints process, and how do I use it?

Every insurer licensed in Ontario must have a written complaints procedure and a designated complaints officer, and must tell you how to reach them. The process is free. It escalates your file above the adjuster who made the decision, to someone whose role is to review whether the decision was correctly made.

Set out what you disagree with, tie it to the policy wording, and attach the evidence. A complaint that states a position clearly is easier to uphold than one that expresses frustration.

Ask for the outcome in writing, with reasons. If the matter goes further, that letter becomes the starting point for the external review, and a vague response is itself informative.

Keep to the sequence. External services generally expect the internal process to have been used first, and going straight to them usually results in being sent back.

How long does a dispute take to resolve?

An internal complaint is often answered within weeks. An external review through the General Insurance OmbudService takes longer, because it involves gathering the file from both sides and assessing it independently. Neither is fast, and neither is a substitute for legal advice where a significant sum or a limitation deadline is involved.

Because limitation periods continue to run while a complaint is being considered, it is worth knowing what your deadline is before you start rather than discovering it afterwards. Ontario's general limitation period for civil claims is two years, and some claim types are shorter.

It is worth separating two questions that often get argued together: whether the policy responds at all, and how much it pays if it does. They follow different routes, they are decided by different people, and mixing them makes both harder to resolve.

A coverage question is answered by the wording and, if disputed, by the complaints and ombudsman process. A valuation question is answered by evidence and, in most home policies, by the appraisal clause.

Sources

• General Insurance OmbudService
• Financial Services Regulatory Authority of Ontario