Denied an Insurance Claim in Ontario? How to Fight It in Small Claims Court
Your insurer denied your claim and you think the denial was wrong. This guide covers the duty of good faith, bad faith denial, the Insurance Act appraisal pr...
Frequently Asked Questions
Can I sue my insurance company in Small Claims Court?
Yes. If your claim is worth $50,000 or less (the Small Claims Court monetary limit effective October 1, 2025), you can sue your insurer in Small Claims Court. You can be represented by a licensed paralegal, and the process is faster and less expensive than Superior Court.
What is bad faith denial of an insurance claim?
Bad faith occurs when an insurer breaches its duty of good faith — for example, by denying a valid claim without a reasonable basis, failing to investigate properly, relying on exclusions that do not apply, or unreasonably delaying payment. Bad faith can lead to damages beyond the policy amount, including mental distress and punitive damages.
Can I get punitive damages against my insurer?
In exceptional cases, yes. The Supreme Court of Canada in Whiten v. Pilot Insurance (2002) upheld $1 million in punitive damages for bad faith denial. This level is rare, but courts can award punitive damages where the insurer’s conduct was high-handed or reprehensible.
What is the appraisal process for insurance disputes?
If the dispute is about how much the loss is worth (not whether it is covered), the Insurance Act allows either party to demand an appraisal. Each side appoints an appraiser, the appraisers select an umpire, and the panel determines the loss amount. The result is binding on quantum but does not resolve coverage disputes.
How long do I have to sue after an insurance denial?
The basic limitation period is 2 years from the date you knew or should have known the claim was denied, under the Limitations Act, 2002. Some insurance policies contain shorter contractual limitation periods — check your policy wording. Do not delay in seeking legal advice.
Contact Legal Assist
Legal Assist Paralegal Services — Licensed by the Law Society of Ontario. Serving London, Ontario and Southwestern Ontario. Call 226-272-5153 or email general@legalassist.london for a free consultation.