Help! The insurance company is denying my claim!

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W. Eric Pedersen

For many Canadians, insurance is a fact of life. We rely on our insurance policies to provide for us in the case of the unexpected. Insurance has become such an important part of our lives that in 2011, Canadians spent over 39 billion dollars on their premiums.[1] When you make a claim on your insurance, your claim will be managed by an insurance adjuster. The adjuster’s job is to ensure that you are paid out properly under the policy – and in most cases, your insurance claims are handled smoothly and you get the compensation and peace of mind you paid for. However, in order to keep your insurance premiums low (and the insurance company’s profits high), the adjuster must always endeavor to keep payments under the policy to a minimum. As a result, disputes arise between insurance companies and their customers about their insurance coverage, and many people find themselves frustrated, and in need of assistance in resolving these disputes.


An experienced lawyer can help you navigate the claims process, and when necessary, can help you fight for the insurance coverage you paid for by brining an action in the courts. This article explains one of the common reasons that an insurer might deny your coverage.

Material Misrepresentation

Whenever you sign up for insurance, you will be asked to provide information about yourself or the property you are insuring in the form of a questionnaire or application form. Failing to fill these out accurately may result in your insurance coverage being voided at the time you make your claim. If this happens, you will usually be entitled to a refund of your premiums.

At common law, the insured has a duty to properly disclose the nature of the risks that are being insured. In addition, your insurance contract will usually contain a term enabling the insurer to treat your contract as void in the case of misrepresentations. Insurance contracts dealing with property will include the following mandatory clause set out in section 29 of the Insurance Act.

If a person applying for insurance falsely describes the property to the prejudice of the insurer, or misrepresents or fraudulently omits to communicate any circumstance that is material to be made known to the insurer in order to enable it to judge the risk to be undertaken, the contract is void as to any property in relation to which the misrepresentation or omission is material.

Interestingly, this condition makes a distinction between misrepresentations and omissions. This distinction was addressed by the Supreme Court of Canada in Taylor v. London Assurance Corp. [1935] S.C.J. No. 13. The Court found that, upon reading of this language, that an omission of material facts must be made intentionally and fraudulently in order for the contract to be voided, but that a misrepresentation will void a contract irrespective of the insured party’s intentions.

However, not all misrepresentations will void an insurance contract. An insurer cannot void your contract for something trivial like spelling a name incorrectly. Section 17 of the Insurance Act states as follows:

17 (1) A contract is not rendered void or voidable by reason of any misrepresentation, or any failure to disclose on the part of the insured in the application or proposal for the insurance or otherwise, unless the misrepresentation or failure to disclose is material to the contract.

(2) The question of materiality is one of fact.

According to section 17, your misrepresentation or omission must be considered material before the insurer can void your contract. This term was explained by the Supreme Court of Canada in the case of Mutual Life Ins. Co., N.Y. v. Ontario Metal Products Co. [1925] 1 D.L.R. 583.The Court wrote that a misrepresentation is material if “whether if the matters concealed or misrepresented had been truly disclosed, they would, on a fair consideration of the evidence, have influenced a reasonable insurer to decline the risk or to have stipulated for a higher premium.” This means that if the misrepresentation would have caused the insurer to charge you a higher premium, then the misrepresentation is material, and the contract may be voided. For example, if you failed to disclose on your application that you were carrying on a business at home, and your roof was crushed by a falling tree, then your insurance contract can be voided – even though the cause of your loss has nothing to do with the mistake made on your application!

You may want to seek legal advice if you have been denied coverage on the basis of misrepresentation – the adjuster’s decision is to void your contract is not always a legally correct one. You may be able to challenge this decision if:

  • the misrepresentation was not materials, or the insurer was not prejudiced by the misrepresentation;
  • the misrepresented facts were not within your knowledge; or
  • the questions on the insurance application were not clear enough to elicit an accurate answer.

In addition, if you relied on a professional to ensure that your insurance needs were met, you may have a cause of action against that professional for negligence.

If you believe you are wrongly being denied insurance coverage, including home insurance, disability insurance, or travel insurance, please do not hesitate to contact me to assist you in getting the insurance coverage you paid for. I can be reached via email at