What to do next
Document the handling, not just the decision
Keep a dated log of every call, request, delay and stated reason, and who said it. A bad-faith claim is built on the pattern of conduct, and the pattern only exists if you recorded it as it happened.
Force the reasons into writing
Ask for the specific policy provision relied on and the evidence considered. Reasons that change over time, or that cite provisions inconsistently, are the substance of these claims.
Respond to their evidence with your own
Where an independent examination or adjuster's report drives the decision, obtain a response from the professionals who actually treated you or assessed the loss. Never let the file consist solely of the insurer's material.
Use the free escalation routes
The insurer's internal complaint process, then the applicable ombudservice, then the provincial regulator - FSRA in Ontario, the AMF in Quebec. These cost nothing and create a documentary record.
Get advice on both claims and the deadline
The claim for the benefit and the claim for bad-faith damages are related but distinct. Limitation periods generally run from the denial, and a policy can contractually shorten the ordinary period.
Frequently asked questions
Is a wrong decision bad faith?
No. Insurers are entitled to assess and to be wrong. Bad faith concerns how the claim was handled - delay without explanation, shifting reasons, disregarding your evidence.
What extra damages are available?
Canadian courts have awarded aggravated and punitive damages where conduct was egregious. Amounts vary enormously and depend entirely on the conduct, so treat any figure you read as illustrative.
Do I have to use the ombudservice first?
Not legally, but it is free, creates a record, and sometimes resolves matters. It does not pause the limitation period, so establish the deadline first.
What kind of lawyer handles this?
An insurance litigation lawyer acting for policyholders. Many work on contingency for denied claims - ask about the percentage and disbursements in writing.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.