What to Do If Your Insurance Claim Is Denied: Tips and Next Steps

Receiving a denial letter for an insurance claim can be a frustrating and disheartening experience. After paying your premiums and fulfilling your obligations, a denial can feel like a breach of trust. However, a denied claim is not necessarily the final word. At Insureline Empire in Alberta, we guide our clients through the appeals process every day. There are clear, strategic steps you can take to challenge the decision and fight for the coverage you deserve. 

Why Your Insurance Claim Was Denied 

The first and most critical step is to understand the precise reason for the denial. Insurance companies are legally required to provide a clear explanation. The denial letter will cite specific policy language or reasons for their decision. Common reasons for claim denials include: 

• Lack of Coverage: The specific event or damage may not be covered under your policy. For instance, a standard home insurance policy typically does not cover flood damage, which requires separate coverage. 

• Policy Lapses or Non-Payment: If your premium payments are not current, your coverage may have been suspended or canceled at the time of the incident. 

• Disputed Liability: In auto or liability claims, the insurer may argue that their policyholder is not at fault for the incident. 

• Insufficient Documentation: The claim may have been denied because the supporting evidence you provided was deemed inadequate to prove the extent or cause of the loss. 

• Missed Deadlines: Failing to file your claim within the timeframe specified in your policy can lead to an automatic denial. 

• Material Misrepresentation: If the insurer believes you provided false or incomplete information on your application or during the claims process, they may deny the claim and potentially void the policy. 

Your Step-by-Step Action Plan After a Claim Denial 

A methodical approach significantly increases your chances of a successful appeal. Do not get discouraged; get organized. 

Step 1: Carefully Review the Denial Letter and Your Policy 

Scrutinize the denial letter. Note the exact policy clauses and reasons cited. Then, cross-reference this with your full policy document. Look for any discrepancies or vague language that could be interpreted in your favor. Understanding the specifics of your contract is your most powerful tool. 

Step 2: Gather and Organize All Supporting Evidence 

Comprehensive documentation is the foundation of a strong appeal. Gather all relevant evidence, including: 

• Photos and videos of the damage or incident. 

• Police reports, fire department reports, or other official documents. 

• Receipts, invoices, and estimates for repairs or replacements. 

• Medical reports and bills, if applicable. 

• A detailed timeline of events and records of all communication with the insurance company, including the names and titles of everyone you speak with. 

Step 3: File a Formal Appeal with Your Insurance Company 

The initial appeal is typically handled through the insurance company’s internal process. Write a formal, professional appeal letter. This letter should: 

• State your policy number and the claim number. 

• Clearly reference the denial letter and its date. 

• Systematically address each reason for denial, explaining with evidence why you believe the decision was incorrect. 

• Attach all your newly organized supporting documents. 

• Request a full and fair review of your claim. 

Send this appeal via registered mail or another method that provides proof of delivery. Keep a complete copy for your records. 

Step 4: Request a Second-Level Review or Speak to a Supervisor 

If your initial appeal is rejected, do not stop. Escalate the matter within the company. Request that your file be reviewed by a different claims adjuster or a senior manager. Sometimes, a fresh perspective can lead to a different outcome.

Escalating Your Denied Claim in Alberta 

When the internal appeals process fails, policyholders in Alberta have robust external avenues to pursue. 

Consulting an Insurance Lawyer 

For complex cases or claims involving significant sums of money, consulting with an experienced insurance lawyer is a prudent step. A lawyer can provide a professional assessment of your case, identify any bad faith practices by the insurer, and represent you in further actions. You can find a qualified professional through the Canadian Bar Association. 

Filing a Complaint with the General Insurance OmbudService (GIO) 

The General Insurance OmbudService is an independent, national dispute resolution service for consumers. If your insurer is a member of the GIO, you can file a formal complaint after you have exhausted the company’s internal process. The GIO will investigate your case and work to facilitate a settlement. This service is typically free for consumers. 

Contacting the Alberta Superintendent of Insurance 

As a regulatory body, the Alberta Superintendent of Insurance oversees the conduct of insurance companies in the province. You can file a complaint with this government office if you believe the insurer has violated insurance laws or regulations. While they may not adjudicate the specific value of your claim, they can investigate and take disciplinary action for non-compliance. 

How to Prevent Future Insurance Claim Denials 

Proactive management of your insurance can prevent many common reasons for denial. 

• Conduct an Annual Policy Review: Sit down with your broker at Insureline Empire each year to review your coverage. Ensure you understand what is and is not covered, and update your policy to reflect any major life changes or new assets. 

• Document Everything Thoroughly: Maintain a home inventory with photos and receipts. After any incident, document the damage extensively before any cleanup or repairs begin. 

• Report Claims Promptly: Notify your insurer and your broker as soon as possible after an incident occurs. Delaying the notification can complicate the process. 

• Be Accurate and Honest: Provide complete and truthful information on your application and throughout the claims process. Transparency is key to maintaining coverage. 

A denied insurance claim is a setback, not a defeat. By taking deliberate, informed steps and leveraging the regulatory resources available in Alberta, you can effectively challenge the decision. The team at Insureline Empire is committed to advocating for our clients and ensuring they receive the fair treatment and financial protection they are owed under their policy.  

For more insights, feel free to contact us or call us at 780-761-2200.