A claim is a request for payment by the insurance company for damages or loss to the person or property filing the claim. The basis of an insurance policy is that if and when a claim occurs then the insurer pays you so you do not suffer an unnecessary financial loss. It sounds straightforward, doesn't it? Unfortunately it is not always quite that simple.

Let's examine the procedure for a claim. First off you, the insured, will be required to give notice in writing to the insurance company. You can do this directly or through your agent or broker. Giving notice is simply, stating the fact that a claim situation has occurred.

The adjuster for the insurance company will examine your policy to see if you do indeed have coverage. If you do have coverage then you proceed to a statement of loss. If you do not have coverage and you thought you did then this is another situation that needs to be addressed.

A broker or agent has a duty to follow your instruction and duly notify the insurance company. If you maintain that you did indeed ask for the coverage and ideally have some documentation of this request then one of the following could occur:

  1. Your representative will confer with the insurance company and the coverage will be in place.
  2. Your representative will present this as an Errors & Omissions claim and the coverage will be in place.
  3. You will not have coverage and will have to pay the financial loss yourself.
  4. You can complain to the insurance governing body in your province/territory in hope of receiving compensation.

You will make a statement to the insurer adjuster and complete a proof of loss. The proof of loss form has to be signed with a statement declaring the complete listing of the damaged/lost property. This needs to list the quantities, price you paid for it and the estimated replacement cost of the items. This statement declares how the loss occurred.

If your claim is due to fire or explosion due to ignition then you have to state how the fire or ignition started to the best of your belief. You have to state that you did not create the loss through any deliberate act, neglect, procurement or means or your connivance.

You will be asked if there is any other insurance applicable to this claim. You must declare any policies that you might already have in place.

You have to declare any interest that others may have. Examples would include a mortgage on your home, a lien on your vehicle or equipment.

You will have to declare if you changed the title on the property, your occupation or have amended the use of your property since you started your insurance term.

You have to state if the property insured was on site at the time.

If necessary you may have to provide a complete list of the undamaged property and provide costs and an actual cash value of these items. You may even have to provide account books, receipts, or invoices.

Now you have to decide if you wish to replace the items or property. If so then the values will be considered as current replacement cost if you purchased a replacement cost policy. If you decide to take a cash settlement then your values will not be for full replacement cost but a reduced amount. With depreciation and other considerations you could receive somewhere between 50 and 80%. Each situation has to be considered on its own merits.

When you have settled with the company you will sign a document agreeing that all has been settled in full. This would include the rebuilding of your home to the payment of expenses that the adjuster has approved.

Bear in mind that your agent or broker is not licensed to act as an adjuster. Your agent or broker can help you with communicating to the adjuster if you are having difficulty getting phone calls returned or setting up an appraisal appointment. Your broker cannot make decisions on behalf of the insurance company in regards to how your claim will be paid.

An adjuster or appraiser should always treat you respectfully and courteously. If you have a complaint then you advise your local insurance council.