Having an insurance claim denied is frustrating, especially when you have been paying premiums for years specifically for this kind of protection. But a denial is not always final. A policyholder can provide additional evidence, challenge the insurer’s reading of the policy wording, or take the complaint to an independent ombudservice.
Here is why claims get denied, how to appeal step by step, and where to go if your insurer will not budge. This page picks up where the claim process ends; the steps for filing in the first place are in how to file an insurance claim, and related guides on deductibles, brokers and premiums are collected in the travel, pet and other insurance hub.
Common reasons insurance claims are denied
| Reason | What It Means | Example |
|---|---|---|
| Policy exclusion | The cause of loss is specifically excluded in your policy wording | Water damage from gradual seepage is excluded (sudden burst pipe is covered) |
| Late reporting | You did not report the claim within the required time frame | Auto accident reported 6 months later; insurer argues inability to investigate |
| Misrepresentation | You provided inaccurate information on your application | Failed to disclose a previous claim or criminal conviction |
| Failure to mitigate | You did not take reasonable steps to prevent further damage | Did not turn off water after a pipe burst, causing additional damage |
| Coverage gap | The type of loss is simply not covered by your policy | Earthquake damage without earthquake endorsement |
| Pre-existing condition | Health/disability claim for a condition that existed before coverage began | Disability claim for back pain that was treated before the policy start date |
| Material change not reported | You did not inform the insurer of changes that affect risk | Started a home business or got a new dog breed without updating your home policy |
| Deductible not met | The claim amount is below your deductible | $1,500 claim with a $2,000 deductible (how deductibles work) |
The denial letter normally cites the policy clause the insurer is relying on. If it does not, ask for it in writing.
Step-by-step appeal process
Step 1: Read the denial letter carefully
The denial letter should specify the exact policy clause or condition the insurer is relying on. Read the corresponding section of your policy. If the wording is still ambiguous after the usual rules of interpretation, the Supreme Court of Canada has held that courts construe the policy against the insurer (the contra proferentem rule), which means coverage provisions are read broadly and exclusions narrowly (Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33).
Step 2: Gather supporting documentation
Build your case before contacting the insurer:
| Claim Type | Useful Documentation |
|---|---|
| Home insurance | Photos/video of damage (before and after), contractor estimates, maintenance records, receipts for temporary repairs |
| Auto insurance | Police report, dashcam footage, witness statements, independent damage appraisal, medical records |
| Life insurance | Medical records, physician’s letters, autopsy report (if applicable), proof of policy being in force |
| Health/disability | Specialist medical opinions, functional capacity evaluation, employment records showing inability to work |
| Travel insurance | Medical facility records, proof of expenses, trip booking confirmation, reason for claim; for pre-existing condition denials, pharmacy and doctor records covering the stability period |
Step 3: Request internal review
Contact your insurer and formally request a review of the denial. Ask to speak with a supervisor or a different claims adjuster. Present your additional documentation and explain why you believe the denial is incorrect. If you bought the policy through a broker, the broker can escalate with the insurer on your behalf (broker vs direct: claims support).
Tip: Put your appeal in writing (email or registered letter). This creates a paper trail and ensures your arguments are clearly documented.
Step 4: Escalate to the insurer’s ombuds office
If the adjuster and their supervisor uphold the denial, ask to escalate to the company’s complaints department or ombuds office. The insurer’s final written answer matters: the General Insurance OmbudService (GIO) reviews a case only once the policyholder has a final position letter from the insurer, and the OmbudService for Life and Health Insurance (OLHI) asks consumers to follow the insurer’s internal complaint process first. Complaint procedures and response times are set by each insurer and are usually published on its website.
Step 5: Escalate to the external ombudsman
If the internal process fails, take the complaint to the external ombudservice for that type of insurance. Both services are free and independent of the insurers, and both serve Quebec as well as the rest of Canada.
| Insurance Type | External Ombudservice | Website |
|---|---|---|
| Home, auto and business insurance | General Insurance OmbudService (GIO) | giocanada.org |
| Life and health insurance | OmbudService for Life and Health Insurance (OLHI) | olhi-oap.ca |
GIO reviews the case, the policy wording and the insurer’s reasons, and its final stage is a non-binding recommendation. OLHI can ask the insurer to reconsider its decision. Neither can force the insurer to pay, and if you remain unsatisfied you can still go to court or contact your provincial insurance regulator (the Autorité des marchés financiers (AMF) in Quebec, for example).
Step 6: Legal action (last resort)
If the ombudsman process does not resolve the issue and you believe the denial is wrongful, you can pursue legal action. Options include:
- Small claims court: for claims up to the provincial limit (for example, $50,000 in Ontario, $35,000 in BC, and $100,000 in the Alberta Court of Justice’s civil division).
- Civil litigation: for larger claims.
- Class action: if many policyholders are affected by the same denial pattern.
Limitation periods for legal action by province
Each province’s limitations statute sets a general deadline for starting a lawsuit. In most provinces it runs from the day the claim is discovered, which is not necessarily the date of the denial letter.
| Province | General limitation period | Statute |
|---|---|---|
| Ontario | 2 years from discovery | Limitations Act, 2002, s. 4 |
| British Columbia | 2 years from discovery | Limitation Act, s. 6 |
| Alberta | 2 years from when the claimant knew or ought to have known of the injury | Limitations Act, s. 3 |
| Quebec | 3 years | Civil Code of Québec, art. 2925 |
| Manitoba | 2 years from discovery | The Limitations Act, C.C.S.M. c. L150 |
| Saskatchewan | 2 years from discovery | The Limitations Act, s. 5 |
| Nova Scotia | 2 years from discovery | Limitation of Actions Act, s. 8 |
| New Brunswick | 2 years from discovery | Limitation of Actions Act, s. 5 |
| PEI | 6 years for actions not otherwise provided for | Statute of Limitations, s. 2(1)(g) |
| Newfoundland and Labrador | 2 years for damage to a person or property; 6 years for actions not otherwise provided for | Limitations Act, ss. 5 and 9 |
Important: these are general periods. A province’s Insurance Act, and the statutory conditions it writes into policies, can set a specific time limit for some types of insurance, and each statute has exceptions. Check the “limitation of action” or “time limit for legal proceedings” condition in your policy, and get legal advice before relying on any deadline.
When denial might be bad faith
Insurers in Canada owe policyholders a duty of good faith and fair dealing in handling claims (Whiten v. Pilot Insurance Co., 2002 SCC 18). Conduct that can raise a bad faith concern includes:
- Denying a claim without proper investigation
- Unreasonably delaying the claims process
- Misrepresenting policy terms to justify a denial
- Refusing to provide a written explanation
- Offering a settlement far below the reasonable value of the claim
A breach of that duty can lead a court to award damages beyond the claim itself: in Whiten, the Supreme Court of Canada restored a jury’s punitive damages award against the insurer. If you suspect bad faith, an insurance litigation lawyer can assess it.
Tips to prevent claim denial
- Read your policy. Understand what is covered and what is excluded before you need to make a claim.
- Report claims immediately. Notify your insurer as soon as possible, even before you know the full extent of the damage.
- Document everything. Take photos, keep receipts, and maintain records of all communications with your insurer.
- Mitigate damage. Take reasonable steps to prevent further loss (board up a broken window, turn off water, etc.), and keep receipts for what you spend.
- Be honest on your application. Disclose all relevant information. Misrepresentation can void coverage.
- Report material changes. Notify your insurer of renovations, new pets, home businesses, or other changes that affect your risk profile.
Related pages
- Car Insurance Guide Canada: coverage types and how to choose
- Best Home Insurance Canada: comparing providers
- Best Critical Illness Insurance: lump-sum health coverage
- Canadian insurance overview: every insurance hub on the site
Sources
The figures and rules on this page come from these sources, last checked against them on September 25, 2026. How we check facts.
- giocanada.org: GIO HOME - GIO
- olhi.ca: About OLHI | OmbudService for Life & Health Insurance
- ontariocourts.ca: Small Claims Court – Ontario Superior Court of Justice