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There is nothing worse than finding out your car insurance company has denied your claim. However, this happens quite frequently in Canada. There are several reasons some insurers will deny a claim, some may be out of your control. Some may not even be legitimate. There is a process that can be followed if you think your car insurance claim has been unjustifiably been denied. Always ensure you know what is and is not covered under your current car insurance policy. It just may be the insurance company is within their rights to deny your claim. 

Reasons For Car Insurance Not Paying Out


There are a few reasons why a car insurance company will not pay out a claim. Some reasons include:

  • Time-limits not met
  • Unlawful or reckless driving
  • Premiums overdue
  • Lack of coverage
  • Fraudulent claims
  • Violation of the policy

Time-limits Not Met

Your car insurance policy may have a time limit on reporting an accident. The reason being it allows your insurer time to inspect the involved vehicles and start investigating the accident. Failing to meet the notification time limit could result in claim denial.

Unlawful or Reckless Driving

If you are found guilty in a court of law of unlawful or reckless driving you can fully expect your insurance claim will be denied. 

Premiums Overdue

If you are not up to date with your insurance premiums and you are involved in an accident, there is a good chance that your insurance provider will not pay out your claim.

Lack of Coverage

If there is a cap on your insurance coverage and your claim is over the cap, you will be responsible to pay the difference out of pocket. 

Fraudulent Claims

insurance fraud

If your insurance provider suspects you are making a fraudulent claim, they will deny your claim until their investigation is complete. If found fraudulent, the claim will be fully denied and you could be charged with fraud. 

Violation of The Policy

If you have not advised your insurance provider of certain things such as being a part-time fast-food delivery person and you get into an accident while conducting your business, chances are your claim will be denied. It is always important to advise your insurance provider of anything that could affect your car insurance policy. 

What Happens If an Insurance Company Doesn’t Pay?

If your insurance company does not pay a claim you think you are entitled to you can file a complaint with the Insurance Bureau of Canada or you can hire a lawyer. 

Can I Sue An Insurance Company For Not Paying?

Yes, you can hire a legal firm and sue an insurance company if you think you were wrongfully denied an insurance claim. 

Which Insurance Company Is Best At Paying Claims In Canada?

There are several insurance companies in Canada that are more than fair when it comes to paying out claims. 

The Importance of Reading and Understanding Your Car Insurance Policy

To avoid possible claim denial by your car insurance company, it is very important to fully read and understand your car insurance policy. If there is something you do not fully understand, ask your insurance provider for clarification. If something were to happen and you didn’t realize your car insurance policy wouldn’t cover it, your claim could be denied. All insurance companies are not the same. Make sure you read all the fine print. 

What Can I Do When My Car Insurance Company Denies My Claim?

claim denied

Your car insurance policy is a legal document, both you and your insurance provider have rights and responsibilities pertaining to the agreement. If you have filed a claim under your car insurance policy and the claim has been denied there are a few things you can do to better understand the situation or possibly have the decision reversed. Before filing a complaint with the Insurance Bureau of Canada, ask your insurance provider for all the details surrounding your claim denial. If your insurance representative has not satisfied your concerns you can ask to speak with their supervisor or manager. You can also follow these steps:

Step One

Contact the Insurance Bureau of Canada’s Consumer Information Centre to make some general inquiries as they have extensive training and experience in the insurance industry. They can also provide you with any clarification you may need with the wording of your insurance policy. The Consumer Information Centre can advise you on how to proceed with a complaint and how to obtain information about contacting a Complaint Liaison Officer or Ombudsperson. 

Step Two

Contact your insurance providers Ombudsperson or Complaints Liaison Officer as all licensed insurance companies have their own dispute resolution process. When you speak with your insurers Ombudsperson or Complaints Liaison Offers make sure you explain in detail what your expectations are, have all the important information and documentation available, give them time to investigate the situation, and always keep a written record of anyone you have spoken to and the conversation you had with them.

Step Three

If you are not satisfied with the outcome with your insurance provider Ombudsperson or Complaints Liaison Officer you can request a final position letter and get in touch with the General Insurance OmbudService also referred to as GIO. The GIO is a regional-based independent consumer dispute-resolution system for the entire insurance industry. The GIO member will assist you and your insurer to resolve disputes about any claims and policy interpretation-related matters. The GIO acts in a fair, impartial, and independent environment.

Step Four

If you are still not fully satisfied after going through the GIO to resolve your dispute you can then contact a Financial Consumer Agency of Canada such as:

  • The Financial Consumer Agency of Canada
  • Property and Casualty Insurance Compensation Corporation
  • Financial Services Commission of Ontario

The Financial Consumer Agency of Canada

The Financial Consumer Agency of Canada is a Federal institution that educates and protects consumers with financial services. The role of the  Financial Consumer Agency of Canada is to ensure that all financial institutions comply with Federal consumer protection measures. You can also make a complaint to the Financial Consumer Agency of Canada regarding your insurance provider. 

The Property and Casualty Insurance Compensation Corporation

The Property and Casualty Insurance Compensation Corporation is a Federal institution. It is the responsibility of the Property and Casualty Insurance Compensation Corporation to protect consumers in rare cases of insurance company insolvency. 

The Financial Services Commission of Ontario

The Financial Services Commission of Ontario is a Provincial institution that can advise you on how to resolve a complaint about your insurance provider.

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