Insurance is truly a unique product. What else do we willingly pay for in hopes that we will never have to use it? This is particularly the case with home insurance. We gladly pay the annual premiums knowing that in the case of a fire loss we are protected. All too often, however, this is not the case. A person can pay premiums for years only to find out that once he or she has a fire loss, the insurance company is no longer his/her friend.
Dealing with a major fire loss or property claim? Read Alf Kwinter’s list of Top 10 “Did You Know” tips for policyholders when dealing with a major loss. Singer Kwinter is the only firm in Canada to obtain 4 punitive damage awards against Insurance companies….
Here are Alf Kwinter’s 10 quick tips for policyholders when dealing with a major loss :
Did You Know:
- There is no obligation on you to use the insurance company’s “preferred contractor”. to rebuild or repair damage to your property. Some of these contractors depend on the insurer for most of their business. So consider whose interest they will likely protect.
- If you don’t start a legal claim within the time limit set out in your policy you could lose all your rights against your insurance company.
- Every major claim under your policy has to be supported by a sworn Proof of Loss. This is a declaration made under oath that all statements made to support your claim are true. Any exaggeration or misstatement no matter how small can cancel your entire claim. The “ duty of good faith” referred to in #10 goes both ways. You are obliged to be truthful with respect to every aspect of your claim.
- If you and your insurance company cannot agree on the amount of your loss the Insurance Act provides for a process called an Appraisal. Each side chooses an appraiser and the 2 appraisers agree on an umpire. The decision of 2 out of the 3 is binding. This procedure is designed to provide an efficient and expeditious way to determine your loss which could otherwise take days or even weeks of court time.
- Public adjusters are experts in representing policyholders in Appraisals. They are usually adjusters who previously acted for insurance companies so they are familiar with how insurance companies treat and mistreat their policyholders. Public adjusters usually charge a percentage of the loss. The Policyholders’ Counsel should be able to recover that fee as part of the claim.
- If your policy provides for replacement value you can only get RV if you replace otherwise you are paid Actual Cash Value. That applies both to the structure and contents. Replacement cost means the cost of replacing the item following the loss- not what you paid. Actual Cash Value refers to what you would get if you were to sell the item.
- You can recover amounts in excess of the policy limits if the actions or inaction of the Insurance company in handling your claim have put you to additional expense. These are known as Consequential Damages. For example, having to hire your own contractor to correct or redo faulty work performed by the Insurance Company’s preferred contractor.
- Where the insurance company has engaged in conduct that could be considered high handed, vindictive and arbitrary you could be entitled to an award of punitive damages. These damages are not meant to compensate the policyholder but to punish the Insurance company and to deter it and other Insurance companies from engaging in similar conduct.
- The courts have recognized certain insurance policies ( i.e. Disability Policies) as “peace of mind “ contracts. Where an Insurance company has mistreated a policyholder and caused emotional distress there can be an additional claim advanced for damages for mental distress as well as what are know as Aggravated Damages.
- The caselaw is very clear that an Insurance company owes its policyholder what has been termed as “ the duty of good faith”. This basically means that the company must handle each claim fairly, expeditiously, even handedly and cannot put its interest ahead of the interests of its policyholder. Failure to do so can result in a finding of bad faith. Such s finding could result in an award for Punitive as well as Aggravated Damages.
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