You have a claim that you thought would be covered by your insurance. That's why you bought your policy in the first place, right? Yet your insurance provider is insisting that your claim is not covered under your policy. What do you do?
First, ask your insurance provider to show you exactly where in the policy it states that this particular peril is not covered. It may be that once you have read your policy, you will realize that you have no argument. (That's why it's so important to ask your insurance provider what is not covered before you buy your policy.)
However, many claims are not so cut-and-dried. Perhaps, having checked your policy, you still disagree with the insurer's decision. Try to resolve your problem within the company first. Discuss your case with a senior official in the claims department, the claims manager, if possible. This official may make an allowance if there is a gray area, and particularly if you are a good long-term customer. But don't count on it.
If you're still not satisfied, find out if the insurance company (not the broker) has an ombudsperson or an employee who deals with consumer complaints (in Ontario, all insurance companies are required by law to have someone in this position). If so, contact that person.
Another option is to speak with one of the information officers at the consumer assistance centres operated by the Insurance Bureau of Canada (for property and casualty insurance) and the Canadian Life and Health Insurance Association (for life and health insurance questions). While they do not have the authority to intervene in the company's decision, they will advise you as to your best course of action, or tell you if you have a case at all.
As of December, 2002, consumers have access to a new, free service to help resolve all types of financial-services complaints, including insurance. The Centre for the Financial Services OmbudsNetwork (CFSON) can be reached toll-free at 1-866-538-FS0N (3766), or 416-777-2043 in Toronto (for services in French, call 1-866-668-7273). Web site: www.cfson-crcsf.ca . In order to use this service, you must first have tried to resolve your complaint at the company level. If you have done so and are still not satisfied, the Centre will refer you to one of the three industry-level ombudservices: the Canadian Life and Health Insurance OmbudService (CLHIO), for life- and health-related insurance complaints; the General Insurance OmbudService (GIO), for home, car, and business insurance complaints; or the Ombudsman for Banking Services and Investments (OBSI), for all other types of financial-services complaints. The service is available Monday to Friday, from 9:00 a.m. to 7:00 p.m. EST. Fax, voice, e-mail, and Web access are available around the clock.
CFSON now also offers the Complaint Couriers financial complaint module, an online tool that walks consumers through a multi-step process, beginning with complaint assessment, followed by an overview of rights and responsibilities, and guidance in contacting the financial provider, both by telephone and by letter. For consumers who have completed all the steps at the company level and are still not satisfied, the tool provides an online form that can be completed and e-mailed seamlessly to one of the three independent ombudservices. The financial complaint module can be accessed through the CFSON Web site.
The ombudservices have the capacity to produce a report with recommendations, including, in some cases, restitution or compensation. However, the recommendations are not binding on the insurer.
In the case of property-claim disputes, you could also retain a public adjuster, a licensed adjuster who acts on your behalf to settle your loss with the insurance company, taking a percentage of the final settlement as payment. While public adjusters are not as common in Canada as they are in the United States, and the insurance industry -- not surprisingly! -- tends to shun them, they represent yet another avenue for dissatisfied consumers.
Finally, you may have to resort to legal action. If you retain a lawyer, choose one who specializes in insurance litigation, and ask in advance about fees. Lawyers' fees for bodily-injury lawsuits are usually payable upon settlement of the case, rather than on an hourly basis.
Most insurance disputes arise from a lack of communication upfront, when the insurance was purchased. Who can blame consumers for crying foul when, for example, they are penalized for small claims that they probably wouldn't have made had they known the surreptitious rules by which insurers play. It's the responsibility of the insurance provider, not only to explain these practices, but to inform the consumer what is, and isn't , covered in the policy. Simply handing over a brochure to the consumer will not do the trick.
But policyholders must also learn to ask the right questions and make the effort to understand what they are buying. If your insurance provider is not willing to take the time to assess your needs, answer your questions, and explain your policy to you, find one who will. Ask trusted friends or relatives for recommendations, especially if they have experienced a recent claim. Insurance is a big expenditure, and you need to be sure you are getting what you're paying for – the peace of mind that comes from knowing you have the right insurance protection.