Robert's insurance nightmare began on the stormy day last summer. He was sitting inside his basement apartment in downtown Toronto when water suddenly started spewing from the drain cover in the center of his floor. It oozed outward, slowly drenching his couch, machine, shoes, and book collection. Pretty soon, the water was up to his ankles.
Robert called his tenant insurance provider, who sent an adjuster the following day to survey the flooding. Like a renter, Robert wasn't responsible for harm to the floor or walls, but he estimated he'd lost about $2,300 worth of personal items, and would need to re-locate before the water was cleared and also the problem was fixed. The adjuster assured him several times, both in person as well as in writing, that he'd be reimbursed for his contents and the accommodations.
Over the following six weeks, Robert spent $6,000 on Airbnbs. “It was all the money I'd,” he says. Yet as he moved back to his apartment in September, he still hadn't seen a penny from his insurance provider. Concern about making October's rent, he wrote the organization again, asking when he'd be reimbursed. The adjuster called him to deliver some not so good news: looking over Robert's insurance policy again, he realized it excluded damage caused by “the copying or escape of water from the sewer, sump or septic tank.” In other words, the insurer would purchase neither his items nor his accommodations.
“I was stunned. I was really in shock,” says Robert, who requested his real name 't be accustomed to avoid blowback from his insurance company. He'd never filed an insurance coverage claim before. Up to that point, he'd simply trusted his insurance provider to deal with the problem. When they balked, he says, “I was clueless that how to deal with this.”
It was stressful. To this day, I still don't completely understand how it all works
Robert called his adjuster's manager, who only doubled recorded on the choice. So he went higher. With the aid of a buddy and a bit of internet sleuthing, he found the e-mail address from the senior v . p . of claims at the multinational insurance company that owned Robert's insurance provider. At 11 p.m. on the Monday night, he sent her an email explaining the situation. “It would be a total shot in the dark,” he states. “There's not a way this really is likely to work.”
The next morning, however, Robert was surprised to wake up to a response in the executive. She apologized and promised to look into it. A couple of hours later, she wrote again and agreed to cover his costs. While Robert's policy did in fact exclude damage caused by sewer backup, she chose to foot his bill for the sake of good customer service; in the end, he'd been promised many times that he'd be reimbursed. With that afternoon, an inspection for $8,300 was in the mail. Robert's insurance saga was finally over. “It was stressful,” he states. “To this day, I still don't completely understand how it all works.”
How to deal with home insurance claim disputes
Robert's do-it-yourself solution isn't best way to solve a home insurance claim dispute. Whether you're a tenant or a homeowner, you often have recourse against an insurer that refuses to cover damage brought on by flooding, fires, or other accidents.
If your homeowner's insurance claim is denied, or if the payout is under satisfactory, start by gathering all the information you are able to from your insurance company, your broker, as well as your adjuster. Ask for any documentation associated with your case and policy, and try to pinpoint the legal wording that's in the centre of your dispute – for instance, in Robert's case, the exclusion of coverage was for damage brought on by sewer backup. (This type of coverage usually needs to be purchased being an endorsement, or add-on, to an existing policy.) This may assist you to realise why your claim was denied.
Next, examine your claim: have you submit all of the evidence necessary to prove your loss? Attempt to add extra materials – photos, videos, service receipts, written promises out of your adjuster – that could change your insurance provider's mind. With respect to the extent of the damage, you might also commission an independent appraisal, which may set you back a few hundred dollars but help recoup thousands more over time. Armed with this new information, submit a brand new claim to your insurance company.
How to dispute a home insurance claim denial
Of course, there is a chance your brand-new claim will come across exactly the same fate as your initial one. In that case, file a complaint with your insurance company's ombudsperson or complaints liaison officer – they all are necessary to have one. Make sure to state the facts clearly and express your desired outcome. Pass on all the information you've gathered to date – in addition to any extra details they may request – and an eye on all of your correspondence.
At this point, you've done everything you can as an individual. It's time to involve a third party
Allow time for the complaints liaison officer to investigate the problem; they'll need to examine all of the documentation and could speak with your adjuster and their manager. If they side with you, they'll pay your claim and your dispute is over. Otherwise, ask for a final position letter that states the insurance company's conclusive decision in your situation.
How to appeal a homeowners insurance decision
At this time, you've done everything you can being an individual. You're ready to involve a 3rd party. First, contact the insurance coverage Bureau of Canada, a national industry association. They'll provide a neutral opinion on your case, plus they may spot flaws or omissions in your claim that could change your outcome.
If the insurance coverage Bureau of Canada doesn't have further advice, they may lead you to the General Insurance Ombudservice, a completely independent body that tries to look for a “mutually agreeable solution inside a confidential, non-confrontational, and cost-effective manner” that pleases all parties. At no cost, the Ombudservice will assign you a consumer service officer who are able to negotiate with your insurance company on your behalf. They may arrange adjudication sessions with your provider, but all their recommendations are non-binding – nothing they are saying or do can force an insurance company to pay for up.
If the Ombudservice does not change anything, contact the insurance coverage regulator responsible for your province or territory – for instance, the Financial Services Regulatory Authority in Ontario (FSRA) or even the BC Fsa (BCFSA) in Bc. They can help resolve complaints, make sure your insurance provider is licensed, and punish them if they're acting unlike regulations.
If that also doesn't solve it, your last recourse is to take legal action, likely in small claims court. If a judge rules in your favour, the insurance company is needed to pay your claim and a part of your legal fees. But filing a case will probably set you back more – possibly much more – than $10,000, so be cautious before you head to court. Before you decide to pull the trigger, you could always try, like Robert, to transmit a Hail Mary email to a higher-up at the insurance company. It might not work, but it's worth a go.