There are also different factors to consider between residential claims and commercial claims. Commercial policies may have additional coverages for things like business interruption, leasehold improvements, loss of inventory, equipment, and business expenses. Certain trade policies may also shorten the statute of limitations within which to bring a lawsuit. Early engagement of an experienced attorney can ensure maximum recovery under the terms of the policy and ensure that rights are properly protected against statutes of limitations.
Presentation of the complaint
All insurance contracts in Ontario must incorporate the statutory terms listed in section 148 of the Insurance Act, RSO 1990, c. I.8. Statutory condition 6 indicates that after the occurrence of a loss, the insured must deliver to the insurer as soon as possible proof of loss attested by a statutory declaration. The Proof of Loss must, among others, provide a complete inventory of the destroyed and damaged goods and detail the quantities, costs, actual cash value and details of the amount of loss claimed. Great care should be taken when completing the proof of claim, as when and how the form is completed, as well as what is included or excluded, will determine the remaining course of the claim.
Completing the proof of claim can be overwhelming for policyholders who take on the challenge themselves. Imagine a total house fire where a family has resided for over 20 years. The family will not only have to find alternate living arrangements while their home is uninhabitable, but they will also have to investigate and obtain estimates to repair their home and prepare an inventory detailing every damaged personal property accumulated over the past 20 years. These personal items can easily run into the hundreds and under Statutory Condition 6 policyholders are required to provide details and determine the actual price of each item.
There is the added burden of ensuring claims are not inflated or overstated on proof of loss. As stated above, proof of loss must be evidenced by statutory declaration. Statutory Condition 7 states that “any fraud or willfully misrepresentation in a statutory declaration relating to any of the above (as stated in Statutory Condition 6) vitiates the claim of the person making the declaration.”
Under Statutory Condition 7, any statement in the Proof of Loss which is found to be fraudulent or willfully untrue may void the entire claim. Policyholders should be warned of the importance of not exaggerating values. When I explain this principle to clients, I often use the analogy of a Cadillac versus a Toyota. If the insured owned a Toyota at the time of the loss, he should not indicate on the Proof of Loss that he owned a Cadillac. Although both are indeed vehicles, one is significantly more expensive than the other and policyholders are only entitled to replace items with items of the same or similar quality.