Bad Faith Insurance Claims In Ontario: When Insurers Act Improperly

Insurance companies must treat policyholders fairly and act in good faith when handling claims. When insurers deliberately deny valid claims, unreasonably delay payments, or fail to properly investigate, they breach this duty. Understanding what constitutes bad faith and your available remedies helps you hold insurers accountable.

Insurers must:

• Investigate claims promptly and thoroughly
• Treat policyholders fairly and honestly
• Make reasonable decisions based on evidence
• Pay valid claims without unnecessary delay
• Not prioritize their financial interests over legitimate claims

Bad faith is more than disagreement about claim value: it involves conduct that’s dishonest, unreasonable, or deliberately harmful.

Unreasonable claim denial:

• Denying without proper investigation
• Making up reasons not supported by facts
• Denying based on policy provisions that don’t apply

Inadequate investigation:

• Not examining damage or reviewing records
• Ignoring witness statements or expert reports
• Relying on biased or incomplete information
• Refusing to consider evidence supporting your claim

Misrepresenting policy terms:

• Lying about coverage that actually exists
• Misinterpreting policy language to deny claims
• Providing false information about claim rights

Changing position without justification:

• Initially approving claims then reversing without new evidence
• Paying partial benefits then stopping without explanation

Compensatory damages:

• Full claim value insurer should have paid
• Additional expenses from denial or delay
• Interest from when claim should have been paid
• Financial losses from claim-related hardship

Aggravated damages: for mental distress caused by egregious conduct.

Punitive damages: to punish and deter particularly malicious or high-handed behavior.

Enhanced cost awards: Recover 75-100% of legal fees rather than typical 50-60%, significantly increasing insurer’s financial consequences.

Facing insurance bad faith or improper claim denial? 

Our tort litigation lawyers represent policyholders in bad faith insurance claims and hold insurers accountable for unreasonable conduct. Contact us at 416.901.9984 or info@pintoshekib.ca.