When a refrigerator leak sent water streaming across John Comar and his partner’s kitchen in Ottawa last spring, soaking hardwood flooring and sending water dripping into the basement ceiling, the couple’s frustration was offset by the reassurance of having a generous home insurance policy.
More than half a year later, however, the damage was nowhere near being fixed. Their three-year-old child tripped over exposed floorboards and the couple’s frustration mounted.
“What should have been a straightforward process to restore our home has turned into an ongoing seven-month ordeal,” said Mr. Comar in an e-mail to The Globe and Mail. The couple battled with TD Insurance over their water-damage claim for months.
At the heart of the issue was TD Insurance’s recommended contractor – a company with alarmingly low consumer ratings and many bad reviews online. In Mr. Comar’s case, the contractor provided estimates that omitted key costs. That was compounded by the insurer’s internal process that left Mr. Comar in a bureaucratic loop.
As insurance premiums soar, the couple’s ordeal renews scrutiny around providers’ selection of preferred vendors and insurers’ eagerness to dispute claims.
Home insurance costs in Canada have risen by nearly 8 per cent compared with the same time last year, according to My Choice Financial.
Meanwhile, Canada’s General Insurance OmbudService (GIO), which oversees complaints against property and casualty insurers, saw a roughly 26-per-cent increase in complaints last year. The GIO’s chief executive officer and Ombudsman, April Schulze, said that last year was the resolution service’s busiest year to date.
After TD Insurance sent its contractor to assess the situation at Mr. Comar’s home, the insurer handed the couple about 30 pages of assessments to look through. The contractor’s initial estimate was about $14,000. But after Mr. Comar noticed the estimate omitted the costs for hardwood flooring, it ballooned to about $36,600.
Worried about the mistakes, Mr. Comar Googled the contractor to find concerning reviews on Better Business Bureau, a non-profit, among other platforms. Trustpilot gave it a 2.2-star rating across 62 reviews while ConsumerAffairs rated it even lower at 1.5 stars. Google reviews showed a 3.5-star average.
One Canadian reviewer on Trustpilot who shared a stressful experience, noted: “This is who our insurance company uses, and we can’t believe why they would.”
When the couple asked TD Insurance for an alternative recommended contractor, the company said the contractor was the only one available at the time in the insurer’s “preferred provider network.”
“We just got so frustrated,” Mr. Comar said. “We wanted to use a TD contractor, but we didn’t feel comfortable with someone who kept missing things.”
Seeking a second opinion, Mr. Comar received a $44,555 quote from another contractor. While TD Insurance allowed the couple to use their own provider, the estimates had to be evaluated and approved by TD Insurance, with what appeared to be involvement from the contractor that made the initial error.
“Whenever we raised questions or pointed out something missing from the claim settlement, they consistently went back to their contractor for validation,” Mr. Comar said. “In many cases, they even asked me to communicate directly with the contractor.”
If the couple went with another company, they would have to pay their contractor first “and then deal with the back-and-forth,” said Mr. Comar, adding that every e-mailed question already took at least two weeks to answer and as long as a month in one case.
In a statement, TD Insurance spokesperson Alison Ford said the company is committed to supporting its customers throughout their claims and that customers have the choice between using their own contractor or a TD Insurance-recommended contractor for repairs. TD Insurance did not address why it recommended contractors with low ratings and whether the company keeps track of contractor quality and standing.
Tijana Potkonjak, a lawyer who specializes in insurance claims, said going with an insurer’s recommended provider can still have advantages owing to liability.
“What’s good about going with the insurer’s people is that all of that is factored in. So, in the event of delays, your additional living expenses are still going to be covered,” Ms. Potkonjak said.
The downside is their tendency to cut costs and corners.
Given the errors and omissions in the repair estimates provided by TD Insurance’s contractor and having exhausted other options, the couple obtained the quote from a different contractor, totalling $44,555. So began a new set of challenges: reconciling the higher estimates from their contractor with those from TD Insurance’s contractor, who said that they don’t price match, and later said the independent contractor’s quote lacked sufficient detail. The couple persisted until TD Insurance ultimately relented.
“An insurance company is probably going to look to minimize what they have to pay,” said Shane Katz, a Toronto-based personal injury and insurance lawyer. But consumers have options, too.
Many people don’t realize they can get help from a professional known as a public adjuster to aid in their claim.
A public adjuster can sometimes be cheaper than a lawyer and have “insider knowledge of how the insurance industry works,” Ms. Potkonjak said.
Either an adjuster or a lawyer can help a claimant launch an appraisal process – a key avenue for resolving disputes over damage costs. (They can also do it themselves, though it could be challenging.)
“Each side hires an appraiser; the appraisers choose an umpire, and each appraiser presents their position. The umpire makes a decision,” Mr. Katz said. “Once the umpire makes that decision, everybody has to accept it. It’s final.”
Filing a complaint with the insurance ombudsman is another avenue for frustrated claimants. These can result in insurers being ordered to change the person dealing with a claim, but it won’t necessarily result in any payouts or damages, Mr. Katz said.
Each process can take months or even years to complete. It can take about three to five years from the time a legal claim against an insurer is filed to the time it goes to trial, said Mr. Katz – though settlements can happen earlier.
In the meantime, Mr. Katz said claimants should begin repairs and meticulously record any costs and expenses. Mr. Comar agrees.
“Make sure you get everything in writing before you start the work,” he said, adding that once the work begins, all the negotiating power shifts to the provider.
Last week, seven months after the couple filed their claim, TD Insurance finally agreed to pay the full amount of their contractor’s quote.
