How to File a Home Insurance Claim in Canada
How home insurance claims work
Home insurance claims are the reason you pay a premium for a home insurance policy. They’re the means by which insurance companies determine how much money they pay you after a loss, such as a house fire, burglary, or liability incident.
The home insurance claim process involves four primary parties:
- The policyholder (you): You’re responsible for making a thorough report with evidence of the loss you’ve experienced and working with the insurance company to resolve the claim and repair the damage. You’re also responsible for paying your deductible.
- The insurance representative: Your agent or advisor will take your report of the claim, check your policy to see which coverage (if any) is applicable, and help you get started with the paperwork.
- The adjuster: Your insurance adjuster’s job is to review all the evidence you provided, inspect your property (if applicable), and work with you to determine how much your policy will cover.
- The contractor: If your home is damaged, your claim payout may go directly to one or more contractors repairing your home. Your insurance company may recommend a preferred contractor, or you can choose your own.
What does home insurance cover in a claim?
The first step in the home insurance claim process is determining what coverage applies. Depending on the nature of the incident and the type of policy you have, you might be able to claim multiple benefits.
Coverage can vary significantly depending on the nature and extent of the damage and your policy terms. Read your policy carefully before filing a claim to understand what you may be eligible for.
In addition to reviewing the categories of coverage on your policy, check these details:
- Covered perils: Some home insurance policies have a specific list of perils (i.e., causes of loss) that the policy covers. Others cover perils on an “open basis” and only exclude certain perils in writing.
- Replacement cost or ACV: Check to see whether each section of your policy covers the full cost to replace your property or only its actual cash value (i.e., purchase price minus depreciation). Dwelling and other structures coverage is typically on a guaranteed replacement cost basis, but contents coverage may only pay for the cash value of your items at the time of loss.
- Special limits: Some personal property, such as jewellery and sporting equipment, may be subject to special coverage limits. Check to see how much you’re eligible for.
In general, home insurance covers sudden, accidental damage or loss to your property. That includes things like fire and smoke, theft, vandalism, and natural disasters, and excludes things like wear and tear, neglect, and intentional damage.
Other common exclusions include:
- Water damage caused by sewer backup and overland flooding (can be added back with endorsements)
- Earthquakes (can be added back with an endorsement)
- War and terrorism
- Damage caused by vermin or animals
- Mold
Is it covered?
Home insurance coverage varies based on policy selections and is subject to insurer approval. Always check your policy documents to see what is covered or excluded in your situation.
The table below shows what home insurance will and won’t cover in a few common scenarios.
When should you file a home insurance claim?
In general, you should file a home insurance claim if the cost to repair or replace your property is well beyond what you could manage alone.
Home insurance isn’t designed to cover very small claims. That’s why your policy includes a deductible—a portion of the cost you agree to pay before your insurance company will cover the rest. If the cost to repair or replace your property is below your deductible, you can’t file a claim at all.
But how far above the deductible should your repair costs be to make it worth filing a claim? For most homeowners, filing a claim for any amount less than double the policy deductible isn’t worth it. For example, if your home needs repairs costing $2,000 and you have a $1,000 deductible on your policy, it may be simpler and more cost-effective to pay the full $2,000 and avoid a premium increase.
That’s the biggest downside of filing smaller claims: any home insurance claim resulting in a payout will raise your insurance premiums. You may also lose a claims-free discount on your policy, if you had one. Take the increased premium cost into account when deciding whether a claim is worth it.
If you’re not sure whether a claim is warranted, weigh the potential increase in premiums against the financial hit you’d take in the short run by paying out of pocket.
Is it worth filing a claim?
It’s usually worth filing a home insurance claim if you’re facing unavoidable out-of-pocket costs more than double your deductible that could be paid by insurance.
Let’s look at a few real-world examples.
How to file a home insurance claim
To file a home insurance claim, follow these basic steps:
- Make sure that you and all household members are safe. Call the fire department, seek medical assistance, or contact the police if needed.
- Take steps to mitigate further damage: Once all occupants are safe and the incident is over, make any immediate repairs or actions needed to prevent more damage to your home (e.g., turning off your home’s water supply or electricity, securing a tarp over a hole in your roof).
- Gather documentation: In addition to your policy number, you’ll need photos of the loss, proof of ownership, and proof of your property’s value in order to file a claim.
- Contact your insurance company: Some insurers allow you to file a claim through their website or mobile app, but calling the claims department is typically the best way to report a claim and get human support. Your insurance agent can confirm your coverage and deductible and let you know what paperwork is required for a claim.
Your claims representative will walk you through the claim process and may request further documentation to support your claim. Evidence for your claim could include:
- Photographs and video showing the damage to your home or belongings
- Photos showing the condition of your home and belongings prior to loss
- Receipts, credit card statements, warranties, or owner’s manuals to establish ownership as well as the value of your items
- Police reports, if applicable
- Any other documentation that your insurance company requests
In Ontario, provincial law requires all insurance companies to send policyholders a “proof of loss” form when notified that damage has occurred. You’ll need to fill this form out and send it back with all available documentation attached in order to file the claim.
What happens after you file a claim
Once your insurance company receives your proof of loss, they’ll typically have 60 days to evaluate the evidence and issue a final claim decision. The person in charge of reviewing your claim is known as a claims adjuster.
In addition to reviewing the documents you provided, an insurance adjuster will typically visit your home to inspect it. They may take a statement from you as well as from other parties who were involved in or witnessed the incident. They’ll use all of their observations and evidence to write an estimate of what they believe to be the covered cost of repairing or replacing your property.
It’s your job to stay in touch with the adjuster and answer their questions as clearly and honestly as possible. In the meantime, you’re responsible for vetting and hiring contractors to repair your home. They will provide estimates of the cost.
If you or your contractor disagree with the insurance adjuster’s determination of the payout you’re owed under your policy, you can ask to speak with the claims supervisor or head of claims to get an explanation for the discrepancy. If you’re not able to come to an agreement with the assigned adjuster or their supervisor, you can bring your concern to your insurance company’s ombudsman or the General Insurance OmbudService (GIO) of Canada.
How do insurance companies actually make payments?
Depending on the nature of your claim, you might receive your insurance payout in a number of different ways:
- Physical damage claims: Your insurance company will likely send payment directly to the contractors or service providers hired to repair your property.
- Personal property claims: Your insurance company will likely send a cheque for the cash value or replacement value of your damaged items, leaving you to purchase the actual replacements.
- Liability claims: Your insurance company will likely handle any legal disputes and pay any court-ordered settlement on your behalf, up to your policy’s limits.
If you receive a cash settlement or a cheque from your insurance company, you may be able to choose how to spend it—but certain restrictions may apply, especially if you have an active mortgage.
If the payout is for covered repairs, your insurer and/or lender may require you to provide proof (e.g. photographs, invoices) that the repairs were completed. If the payout was a cash settlement for personal belongings or for a totally destroyed home, you may have more freedom regarding what you spend the money on, especially if your mortgage is paid off and no lender has an insurable interest in the home.
What can affect your claim outcome?
Your claim outcome depends on a wide variety of factors, but it all starts with your policy.
- Policy limits: Every part of your home insurance coverage is subject to limits, or the maximum amounts your insurer agrees to pay for a single loss. You may have separate limits for dwelling coverage, contents coverage, and ALE coverage, or your policy may have a single combined limit for most coverage.
- Deductibles: Other than liability claims, most home insurance claims are subject to a deductible. This means you agree to pay a certain portion of the cost of repairs, or to have it deducted from the total sent to the service provider.
- Loss settlement basis: Most dwelling coverage pays out on a replacement cost basis, meaning that your policy will cover the full cost to repair your home, not just the value of the structure before it was damaged. Contents coverage, on the other hand, may only cover the cash value of your items.
- Covered perils: Home insurance doesn’t cover everything. For example, some types of water damage (like overland flooding) aren’t covered by home insurance unless you have a special endorsement for it.
- The information you provide: The more complete and detailed your proof of loss is, the better the odds of a positive claim outcome.
One simple way to improve the outcome of future claims is to create a home inventory detailing the type and value of your personal property. Collating detailed information about each item, including brand names, receipts, and photographs, will not only simplify the process of filing a claim but improve your odds of getting the full value of your belongings covered.
The Insurance Bureau of Canada (IBC) offers a home inventory spreadsheet to help homeowners start the process.
Common reasons a home insurance claim may be denied include:
- Your insurance company determined that your loss was caused by an excluded peril such as neglect
- You weren’t able to provide sufficient documentation of the loss
- You missed the proof of loss deadline (typically up to one year) to file a claim
- Your insurance company discovered undisclosed information or evidence of fraud
- Your property doesn’t meet the standard for insurability (most common for roofs over 20 years old)
Common mistakes to avoid when filing a claim
Try to avoid these common mistakes many Canadian homeowners make when filing a claim:
- Waiting too long to file: Most home insurance companies give policyholders a window of a few months to one year to file most claims. After any major storm or other event that could cause an insured loss, check your property carefully for damage so that you can file promptly if needed.
- Under-documenting the loss: Your insurance company can only approve a payout based on the evidence available to them. The more documentation you can provide regarding damage that will require repairs as well as the value of your property, the better your odds of a fair payout.
- Starting repairs before the adjuster inspects: You can get quotes from independent contractors while you work on getting your claim processed, but never authorize or conduct any repairs (other than emergency repairs to prevent further loss) before the adjuster has a chance to inspect your property.
- Guessing at your property’s value: Don’t just give a ballpark estimate of what your belongings are worth. Dig into your email, your shopping accounts, and bank transaction history to find concrete evidence of the purchase price, brand, model number, and any other detailed information that can help determine the value of your payout.
- Admitting fault or speculating on liability: Stick to the facts; tell the insurance company what you observed and what actually occurred, not how you feel about it or what you think may have happened. It’s up to the adjusters to review the evidence, assign responsibility, and arrange for payments.
How a home insurance claim can impact your future premiums
Making a home insurance claim can impact your ongoing premiums in two ways:
- Your insurance company will likely raise your base premium, often by 10–20%
- If you previously had a claims-free discount, you will lose that discount
The exception: claims forgiveness. If you have an active claims forgiveness endorsement on your policy and no previous history of claims, your insurance company may agree not to raise your rate. However, you’ll lose the claims forgiveness clause, leaving you open to future rate increases if you have to file a claim later.
If you qualify for a claims forgiveness endorsement, it’s almost always worth the cost. Claims forgiveness typically only adds a few dollars per month to your total premium and can significantly reduce the impact of isolated insurance claims on your overall finances.
If your home insurance premium does go up, the amount of the increase will depend largely on the nature and extent of the damage and the size of your payout. Minor claims may not increase your premium significantly, while major claims could lead to a much higher rate.
You can lower your insurance premium after a claim by:
- Switching to another insurer: Not all insurance companies will put the same weight on your claims history. Compare home insurance quotes from multiple carriers, on your own or with the help of an insurance broker, and see if there’s a lower rate out there.
- Earning new discounts: If your rate went up or you lost a claims-free discount, look into new discount opportunities. Bundling your home and car insurance could qualify you for a multi-line discount, while home upgrades like a centrally-monitored fire alarm may add smaller discounts to your premium.
FAQ: Home insurance claims
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.