Mortgage Insurance Claims

Mortgage insurance is a crucial policy carried by many homeowners in Canada to safeguard their financial stability in the face of unexpected challenges. This essential coverage ensures that families are protected if they or their loved ones encounter difficulties in making mortgage payments due to illness, injury, or unfortunate events like death. By providing this safety net, mortgage insurance offers homeowners peace of mind, knowing that their financial security is preserved even during challenging times. With mortgage insurance in place, individuals can focus on their well-being and that of their families, knowing they have a reliable support system to lean on in times of need.”

Insurance companies have an obligation to honour legitimate mortgage insurance claims, and can’t deny claims without proper justification. Unfortunately, there are instances where insurers wrongfully deny valid claims, causing distress and financial hardship for the claimants.

The mortgage insurance lawyers at Samfiru Tumarkin LLP have proven experience handling thousands of insurance claim disputes. If your mortgage insurance claim is denied, or you simply have questions about the claim process, our team can provide valuable legal assistance and guidance through a free consultation. Our firm will review the policy, investigate the circumstances surrounding the denial, and ensure that the beneficiaries get the proper compensation they are legally entitled to.

Continue reading below to learn more about mortgage insurance claims and how you can get the help you need if your claim for compensation is denied in Canada.

BASIC INFORMATION

What is mortgage insurance?

Mortgage insurance is a type of policy that protects Canadians if they can’t make their mortgage payments due to illness, injury or death. This benefit is designed to pay off the mortgage to the lender in either one complete payment or a set number of monthly payments.

Mortgage insurance is also referred to as Mortgage Protection Insurance or Creditor Insurance.

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What does mortgage insurance cover?

Mortgage insurance covers the remaining balance on the policyholder’s mortgage.

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When do you need mortgage insurance?

You can choose to obtain mortgage insurance when negotiating the purchase of your home or other real estate property through a lender, such as a bank or other financial institution.

Homebuyer’s are typically required to acquire mortgage insurance when they make a down payment of less than 20% of the property’s purchase price. This insurance mitigates the risk for lenders, allowing them to offer mortgages to a broader range of borrowers. The insurance premium is typically added to the borrower’s monthly mortgage payments and is provided by approved insurers such as the Canada Mortgage and Housing Corporation (CMHC) or private insurance companies.

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What are the different types of mortgage insurance policies?

In Canada, there are primarily two types of mortgage insurance:

• Mortgage Life Insurance: This is the most basic coverage option for mortgage insurance. In the event of the insured’s death, the policy will pay off the outstanding mortgage balance, ensuring that the family or beneficiaries do not inherit the mortgage debt.
• Mortgage Disability Insurance: Disability coverage provides protection in the event the insured becomes disabled and is unable to work. The policy will typically cover mortgage payments for a specified period, ensuring that the borrower doesn’t fall behind on mortgage payments due to their disability.

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How much does mortgage insurance cost in Canada?

The cost of mortgage protection insurance in Canada, which covers life, disability, or job loss, can vary significantly based on the insured’s age, health condition, coverage amount, and the specific type of coverage selected.

Premiums for mortgage protection insurance are typically paid on a monthly or annual basis and are determined based on the risk factors associated with the insured.

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What you need to know before you file a mortgage insurance claim

Before filing a mortgage life or disability insurance claim in Canada, there are several important things that you should know:

• Insurance policy details: Review your mortgage insurance policy thoroughly to understand the coverage it provides, including the terms, conditions, and any exclusions or limitations.
• Eligibility and coverage: Determine whether your claim falls within the scope of coverage provided by the policy. Mortgage insurance typically covers events such as death, disability, or illness, which can affect your ability to meet mortgage payments.
• Get Documentation: Gather all the necessary documents and evidence to support your claim. This may include death certificates, medical records, critical illness diagnosis documents, proof of mortgage payments, and any other relevant documentation specified by the insurance company.
• Reporting deadlines: Be aware of the specific deadlines for filing a claim as outlined in your policy. Notify the insurance company promptly after the triggering event occurs to avoid potential claim denials due to missed reporting deadlines.
• Contact the insurance company: Reach out to your insurance company or insurance agent to initiate the claim process. They will provide you with the necessary claim forms and guide you through the steps you need to take.
• Waiting period: Some policies may have a waiting period before you can submit a claim. Understand if there is any waiting period specified in your policy.
• Keep records: Maintain a record of all communication with the insurance company, including emails, letters, and phone calls, related to your claim.
• Talk to a lawyer: If you encounter challenges or complications with your mortgage insurance claim, contact the insurance lawyers at Samfiru Tumarkin LLP immediately. We can provide guidance, review your claim, and advocate on your behalf.

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Why are mortgage insurance claims denied?

Legitimate mortgage insurance claims are wrongfully denied in Canada for various reasons. While each case is unique, here are some common reasons why mortgage insurance claims may be denied:

• Misrepresentation: If the insured person provided inaccurate or incomplete information during the application process or failed to disclose relevant medical or personal details, the insurance company may deny the claim based on the grounds of misrepresentation.
• Policy exclusions: Mortgage insurance policies often have specific exclusions outlined in the terms and conditions. If the reason for the claim falls within these exclusions, the claim may be denied. For example, if the insured’s death or disability was caused by a pre-existing medical condition not covered by the policy, the claim could be denied.
• Lapsed policy: If the insured failed to pay the required premiums, the policy may have lapsed, and the coverage would no longer be in effect. In such cases, the insurance company is not obligated to pay out a claim.
• Failure to meet policy requirements: The claimant must meet specific requirements outlined in the policy to be eligible for coverage.
• Fraud: If the insurance company discovers evidence of fraud or intentional misrepresentation related to the claim, they may deny it.
• Policy inactive: If the policy was canceled or terminated before the triggering event occurred, the claim will not be valid.
• Dispute over interpretation: There may be disagreements between the claimant and the insurance company over the interpretation of the policy’s terms and conditions. If the insurance company believes the claim does not fall within the policy’s coverage, they may deny it.

While your insurance provider may provide these or other reasons for denying your claim, you should never take their decision at face value. Have a mortgage insurance lawyer at Samfiru Tumarkin LLP review your denial letter so we can understand their decision, explore your legal options, and get you the compensation you deserve.

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My mortgage insurance claim was denied – what should I do?

If your mortgage insurance claim has been denied, it is important that you do not appeal your denial. Instead, reach out to a lawyer at Samfiru Tumarkin LLP as soon as possible, as there may be time limits to respond to your insurer that you are not aware of.

Mortgage insurance policies are highly technical contracts and they require a legal expert to interpret and understand the details of the policy. Our team of experienced lawyers can help you get the compensation you are owed.

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How a lawyer at our firm can help

A lawyer can help you understand your mortgage insurance policy and identify your rights. These policies are complex and written in confusing ways. We can help you cut through the legal jargon and understand what the best course of action is to ensure you get your benefits.

Don’t give up. That is what the insurance company wants you to do. They may also encourage you to appeal the denial. Do not go through the insurance company’s appeals process! In most cases, your appeal will be unsuccessful, and your insurer will use this tactic to run out the clock on your time limit to file a claim for full compensation.

If your mortgage insurance claim is denied, you need to contact the experienced lawyers at Samfiru Tumarkin LLP immediately at 1-855-821-5900 for a FREE CONSULTATION.

Our firm has helped many people, like Sandra Bullock, Julie Austin, and Florence Steele, resolve their insurance disputes. We will review the facts of your situation, tell you if you have a case, and advocate on your behalf. Don’t let your insurer walk away with the money that they owe you in your time of need.

Get the advice you need, the compensation you deserve.