What to do when insurance companies drag their feet

This article looks at some of the methods insurers sometimes use to deny or delay a claim.

Insurance is something that most Canadians rely on to provide them with security and peace of mind in times of need. What many Canadians do not rely on is their insurer either turning down their claim or using delay tactics to avoid paying out on a claim in a timely matter. However, as the Financial Post points out, many insurers are all too willing to deny or delay claims for negligible reasons. These tactics can be disheartening and frustrating for consumers and in many cases they can lead to insurance disputes that are only resolved through litigation. Consumers should ensure they get the most out of their policies by being aware of some common tactics used by insurers and what to do if an insurer denies or delays a claim.

Dealing with adjusters

The adjuster is one of the first people consumers deal with when filing a claim. It is important to remember that adjusters work for the insurance company, meaning that at the end of the day they are looking to protect the insurer’s bottom line rather than offer the claimant the maximum amount of compensation possible. An adjuster will often offer the claimant an amount for compensation early on. While it can be tempting to take this settlement right away and end the claims process quickly, it is important to keep in mind that such an offer is likely to be lower than what the insurer is ultimately willing to pay.

For example, as Global News reports, one claimant, who felt that an adjuster offered him 30 to 40 percent below what his car was worth, asked to see the appraisal report. When he contacted the dealers listed on that report and who had supposedly been contacted by the adjuster, he found that one of the dealers didn’t exist, another was long retired, and one had not worked at the dealership that was listed on the report. When the claimant challenged the insurer with this information, the insurer increased its original offer of $17,000 to $26,000.

Negligible reasons

While many claimants worry about their claims getting denied, in a lot of cases, as the Financial Post notes, the bigger risk comes from delays rather than outright denial. Insurers may take an overly long time to come to a decision on a claim or they may keep requesting additional information that has limited bearing on that claim. Some insurers will employ delay tactics when paying out on a property damage claim in the hopes that time will run out for the claimant to sue or that the claimant will simply accept a low offer just to end what can be a frustrating claims process.

In other cases, the insurer may deny a claim for rather negligible reasons, such as a minor issue in an insurance policy application being filled out incorrectly. Even if a claimant believes he or she has filled out the policy truthfully, insurers may look for a small mistake in order to reject the claim outright.

Pursuing litigation

While insurance companies can certainly be intimidating, it is often important not to back down in the face of such intimidation. A civil litigation lawyer who is experienced in handling insurance disputes can be a great asset when fighting for compensation. A qualified lawyer will deal with the insurer directly on the client’s behalf and may be able to push the insurer to offer the client a fairer and more substantial settlement.