In a Fight With an Insurance Company: What Are Your Options?
When you're in a dispute with an insurance company, what you do first should depend entirely on the type of claim you have. This could be a personal injury claim, a contractual claim, a long-term disability claim, or a property claim. They all lead back to the insurance contract, but there are different resolutions depending on the type of claim you have.
Probably the most common type of claim is property damage claims. "Your first line of resolution is presenting the claim to your insurance company. You want to determine if the claim can be adjusted by whoever answers the phone. Often, you can because I would estimate that 70 per cent of the time there's no issue," says Andrew Suboch of Suboch Law, a Toronto-based law firm. For example, those times when a tree falls on your car or you get in a car accident and no one is injured can often be resolved through discussion with your insurance company directly.
"Where you start getting into issues is when there may be an issue of liability. As an example, where there is a car accident involving property damage, you look at what are called The Fault Determination Rules, which are set out by The Insurance Act and regulations that come from there. Depending on how the motor vehicle accident occurred, these rules set out by statute who is at fault for the accident and how claims for property damage are to be resolved. So, a lot of property damage cases have a statutorily prescribed method of resolution."
However, even if the Fault Determination Rules set out how fault is to be determined, you might not agree how the insurance company characterizes the motor vehicle accident, and this categorization can affect who is determined to be at fault. You may have to agree to disagree or agree to split the difference. If, from a property damage perspective, you can't resolve the dispute, you can also go to The Ombudsman, but Suboch will tell you that in his opinion, the Ombudsman's Office hasn't been very effective in resolving many of the cases that come before it.
Your next option is binding arbitration. How to do this is also explained in The Insurance Act, which says you must agree on an arbitrator. However, the downside to arbitration is if you lose, you must pay the other side's cost. "At the end of the day, you can always try to appeal the decision to the courts, but you have to remember that most insurance policies only require the insurer pay the actual cash value," advises Suboch. "Why is that important? If you're going to end up spending $20,000 on a car that is worth $5,000, why would you do that?"
Personal Injury Through a Car Accident
A person who sustains a personal injury through a motor vehicle accident always will have an adjuster appointed by the insurance company. Once you signal your intent to make a claim for personal injury, there are a number of mechanisms available to you.
"If you're suing your own insurance company, known as making a claim for “accident benefits,” you are required to go through mandatory mediation if a dispute arises as to your entitlement to the same or to the quantum of accident benefits. Once you've done that, you can either choose to go through the court system and start a lawsuit against the insurer or go through The Financial Insurance Services Commission of Ontario [FISCO] for arbitration," says Suboch.
For both, there's an intermediary step, which is either a further mediation and a pre-trial on the court side, or if you've chosen the FISCO route, there is a pre-arbitration hearing. You then file the paperwork and go about proving your case.
Long Term Disability, Sickness and Accident or Life Insurance Contracts
When we're talking about disputes other than property or personal injury through a car accident, claims pertaining to longterm disability, sickness and accident or life insurance policy claims, an adjuster is always assigned, and the first step in the dispute resolution process is always mediation. "If that doesn't work, your next method of resolution is through the court system," says Suboch.
This involves a statement of claim, both oral and documentary discoveries, another mediation (either privately or through a roster mediator), a pre-trial before a judge, and if you didn't settle in the pre-trial, a trial itself.
What Makes a Solid Case
Before Suboch Law takes on a case, there are a number of criteria that need to be satisfied. The first has to do with liability.
"If you caused your injuries, unless it's a car accident where you may be entitled to what are called No Fault Benefits even if you caused the accident, you are stuck with the loss," says Suboch. "The first thing you assess in non-motor-vehicle claims is liability. This could be the contractual obligations if you are making a claim for longterm disability, sickness, and accident or life insurance policy claims. So, if an insurance company has issued a contract for longterm disability, sickness, and accident or life insurance and they appear to have a valid case, we will take the case, review the relevant policy, and investigate further."
Suboch Law will investigate the nature of the injury as well as its impact on a person's life and daily activities as they relate to to social, business, employment, sporting, and other concerns. They're looking for witnesses and trying to figure out if the client somehow contributed to the injury. It's a constant process of assessing and re-assessing as new information is revealed.
"For example, if fraud is revealed, I will shut down the case. I will not represent someone I believe, or find out, is committing a crime," says Suboch. "As far as the damage assessment is concerned, each case is distinct and based on evidence particular to that case. For example, if two people break their leg on the same person’s icy driveway that wasn't cleared, a person who is 65 years old and has been on Ontario Disability Support will have a much harder time proving loss of income than an athlete like Sidney Crosby, all other things being equal."
The Biggest Mistake People Make in Thinking They Have a Case
It's easy enough to think you have a case and want to sue the insurance company, but it's much harder to determine if you actually do.
"The biggest mistake people make is in looking at why they have their injury," says Suboch. "This is not to exclude pre-existing injuries, but if you have a pre-existing condition and you injure the exact same area, or you think you did, you have to get a medical practitioner to say that the incident caused or exacerbated the injury in your complaint. You have to show that there's a connection between the accident and your injury and therefore, 'I am entitled to money.' Just because you're injured, does not mean you're automatically entitled to compensation."
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Pre-existing Conditions Don't Automatically Exclude Compensation
Just because you have a pre-existing condition, pre-existing injury does not automatically exclude you from compensation from an insurance company. For example, you may have a long-term disability and still work, pay taxes, and make a significant contribution to society. Then, you get into a car accident, which gives you a more severe permanent disability that will no doubt significantly reduce your ability to contribute to society. If a person is negligent in causing the accident that gravely impacted your societal contribution and further impacted, in a serious manner, your usual activities of daily living, you are probably still entitled to compensation for that loss and for the pain and suffering that the accident caused.
"The idea you won't get compensated if you have a pre-existing condition is perhaps one of the greatest fallacies promoted by the insurance companies," says Suboch. "The idea that you're not entitled to compensation because of a pre-existing condition is an incorrect statement of law."
The leading case on this issue was decided by the Supreme Court of Canada. It is the Athey v. Leonati decision. Athey held that if the injuring party causes a material effect on the life of the person who is injured, then the person who is not at fault is entitled to compensation.
"Any suggestion that merely because you had a problem before, and now, because that same problem is worse, this somehow disentitles you to compensation, is, in my opinion, categorically wrong," says Suboch.
Talk to Someone
When looking into insurance claims, Suboch suggests that people should not attempt to make a claim without first consulting a lawyer if bodily injury is involved.
"If people have a potential personal injury claim, or a claim involving an interpretation of an insurance contract, such as one for long-term disability, sickness and accident. or life insurance policy claims, most lawyers will provide a brief, free initial consultation to determine if, in the lawyer’s opinion, there is a potential basis to make a claim. “It is my firm’s policy to give prospective claimants, after a brief initial telephone screening, a free initial meeting," says Suboch. “At this initial meeting, we meet with the client to try and determine whether there might be a legal basis to assist them in obtaining due and just compensation. We do not charge for this initial meeting."
At Suboch Law, the lawyers are very good at determining if there appears to be any basis for monetary recovery. As this meeting is free, there really is no downside to first getting some legal direction when a person might have a claim. This is particularly important when the injury has been reported to an insurer who then wants to set up an exploratory meeting, often under the guise of taking a statement, from the injured party.
"In my opinion, to give a statement in the case of personal injury without a lawyer is a bad idea because insurance companies will often try to trap people into saying things when they don't know what the relevance, or potential impact, is from their answers. I'm not suggesting the insurance companies are intentionally misleading possible claimants, but all too often I have seen questions put to unrepresented claimants that, in my opinion, were of little relevance to these claimants' cases, but whose answers later end up harming those cases," says Suboch.
"I think people give way too much information and don't know the rights they have not to give certain information that may not be relevant to their case. In my opinion, the insurers are often trying to obtain information about a claimant that may not be relevant to that person’s actual claims but will be used to try and find an angle to pay less. So it's worthwhile to talk to a lawyer early, and if they won't do it for free, there are lots of lawyers out there who will."