All insurance customers – both individuals and businesses – should know the Code of Consumer Rights and Responsibilities
Every year, home, car and business insurers provide billions of dollars to help Canadians recover from disaster. Whether it’s a wind-damaged house, a car crash, or a fire at a small business, insurance plays a vital role in helping people get back on their feet.
An insurance policy is a legal contract that obligates insurers to pay claims for damage covered under the policy – and most of the time, the process runs smoothly. But every so often claims are denied, and it isn’t always because the damage wasn’t covered. There is another, lesser-known reason for denial: the customer did not uphold their end of the contract. If you withhold facts, lie, misrepresent or commit fraud during the application process or during a claim, whether on purpose or not, there can be consequences.
Insurance is a two-way street, with rights and responsibilities on both sides. And you, as an insurance customer, have a role to play.
All of this is captured in a document that is available on IBC’s website – the Code of Consumer Rights and Responsibilities. It contains eight tenets: four rights and four responsibilities. Insurance companies are well aware of every tenet and are committed to upholding your rights.
You, as an insurance customer, should be equally aware of your responsibilities. This applies if you are a car owner, homeowner (or renter), or business owner. In the title “Code of Consumer Rights and Responsibilities, “consumer” refers to all customers of Property and Casualty (P&C) insurance in Canada.
These are all fleshed out in the Code on the IBC website, but here are the tenets at a glance:
Rights:
Right to be informed
Right to timely and transparent claims handling
Right to complaint resolution
Right to privacy
Responsibilities:
Responsibility to understand your needs
Responsibility to provide accurate information
Responsibility to update your information
Responsibility to report the facts
Notably, there is overlap between the four Responsibilities – they all speak to ensuring your insurance company has the information it needs to fulfill its obligations.
But there is nuance: Each responsibility speaks to a different part of the insurance lifecycle. Let’s break it down further:
Before you apply for insurance: Understand Your Needs
This is the planning stage, and it deserves more time than many people give it. You must assess what kind of coverage you need, ask questions, and understand what insurance can and can’t do for you. This is arguably most important for businesses, where the coverage and contracts can be significantly more complex than with auto and home policies.During the application process: Provide Accurate Information
This is about disclosure. When applying, you must be truthful and complete in the information you provide – because that’s what the insurer needs to assess risk and price the policy. Again, the more complex the entity being insured, the more information is needed.Over the course of the policy: Update Your Information
Life and business evolve. You must keep your insurer informed of changes that affect your coverage (e.g., renovations, new purchases, business expansions). If you’re unsure if a particular change impacts the policy, err on the side of caution and check with your insurance representative.Claim time (if it occurs): Report the Facts
When something goes wrong, you must report the incident promptly and accurately to initiate the claims process and ensure fair handling. You will no doubt be very busy right after disaster strikes (not to mention under stress) but immediately looping in your insurance company is to the benefit of everyone. The sooner the claims process gets underway, with all information on the table, the less likely there will be frustrations later.
All too often, consumers don’t spend enough time thinking about their insurance needs. This may happen at any step along the way, and it can lead to giving incomplete, outdated, or incorrect information to the insurer.
But it is your responsibility to provide complete and accurate information. Be sure to work actively with your insurance representative to ensure that no stone is left unturned, at every step of the insurance lifecycle.
Insurance works best when both sides understand their role. By knowing your responsibilities – and all the tenets of the Code – you can protect yourself, your property, and your peace of mind.
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