Being rejected for home insurance doesn’t necessarily mean no company will insure your home.
We reviewed the Financial Consumer Agency of Canada’s insurance-purchase guide and FSRA’s property-insurance guidance to understand why you may be turned down for home insurance. We reviewed FCAC’s insurance-complaint process to learn about next steps if you think your case warrants a complaint. We also reviewed the Insurance Bureau of Canada’s home-rate guide to learn why you may be turned down.
What Should You Do After Being Rejected For Home Insurance?
First, identify why you’ve been denied coverage. If it’s due to inaccuracies on your application, correct them and ask for the reason for rejection in writing. If an existing policy is involved, ask for its effective date.
Provide evidence that problems have been fixed or risks have been reduced.
Talk to a licensed broker who understands insurers’ appetite for your property’s risk.
Common Reasons For Rejection
IBC points to the following reasons why property may be priced higher or turned down: condition of construction, replacement cost, geographic location, claims history. However, every insurer has its own eligibility criteria. Ask which changes or evidence could make the property eligible, rather than settling for a vague description of it as a difficult risk.
Read More: Review High-Risk Home Insurance After a Rejection
Which Repairs Or Documents May Improve A New Application?
| Underwriting concern | Possible response | Evidence for the next insurer |
|---|---|---|
| Roof or active water entry | Repair the cause and damaged materials | Paid invoice, photos, warranty and roofer report |
| Electrical system | Obtain the inspection or licensed work the insurer requests | Inspection report, permit or certificate and invoice |
| Plumbing or heating | Replace or service the identified system | Material details, installation date and contractor record |
| Vacancy, renovation or rental use | Seek the policy designed for the actual occupancy | Dates, permits, scope of work, tenant/property management information |
| Repeated claim cause | Show that the source and recurrence risk were addressed | Claim documents, repair report and prevention upgrade |
Read More: Use the Insurance-Focused Home-Maintenance Checklist
Address Structural Concerns
Call a qualified engineer, electrician, or roofer to address specific concerns. However, confirm with your insurer what will satisfy them. It would be a waste to initiate expensive work that may not be necessary. Insurers may specify what report, repairs or remaining useful life will satisfy them. Don’t guess.
Add Relevant Safety Measures
Items that reduce the chance of a claim, including security systems, smoke detectors and automatic water shutoff devices, may reduce loss risk. Don’t assume, however, that adding them will guarantee eligibility or discounts.
Contact your insurance company to find out if it recognizes those items, what standards and proof it requires and whether security systems need to be professionally monitored.
Document Routine Maintenance
While evidence of regular property maintenance won’t erase previous claims or require an insurer to accept the risk, this documentation can help an underwriter understand a home’s current condition. Save receipts, invoices, and take pictures of maintenance activities, especially those related to your roof, plumbing, electrical, heating, or other systems that control water, and record dates.
How To Apply Again With Better Evidence
- Provide a one-page property description, including: year built, occupancy, mortgage information, any renovations, especially to the roof or any systems, type of heat, claims history and any work in progress.
- Include only pertinent supporting documentation.
- Tell the insurer what has been updated or changed since being turned down.
- Talk to a licensed broker who is knowledgeable about the standard, specialty and high-risk markets.
- Don’t just compare the premium; evaluate the policy. Understand deductibles, limits, exclusions and conditions, including how water damage is treated and how claims are settled.
- If your mortgage lender requires insurance and there’s going to be a lapse in coverage, tell them. Your lender may purchase lender-placed coverage to protect its interest, but it isn’t a replacement for a robust homeowners’ policy.
Read More: See When a Home Inspection Can Support an Insurance Application
How Future Claims Can Affect The Next Application
Do not delay notices or hide losses to maintain a clean claims history. Protect people and property first, then comply with policy requirements as soon as possible. Find out how the insurer records inquiries, notices, open files, withdrawn claims and payments.
When To Challenge The Decision
If you think the decision was based on incorrect information or didn’t follow the company’s complaint-handling procedures, use the insurer’s complaint procedure and ask for its final decision in writing.
If the complaint has not been resolved to your satisfaction, it may be eligible for resolution through the General Insurance OmbudService.
You can also report an insurer’s or intermediary’s business conduct to the provincial regulator.