Why’s it taking longer to settle home insurance claims?
Ontario’s financial services regulator has found a “significant variation” in the amount of time it takes different insurers to settle home insurance claims, partially attributable to supply chain disruptions, catastrophic events and a shortage of skilled labour.
In its inaugural Home Insurance Thematic Review Report released last week, the Financial Services Regulatory Authority of Ontario (FSRA) examined five areas of improvement in claims-handling processes, including claims resolution times.
The report found the average number of days to settle a home insurance claim between 2019 and 2022. In 2019, it was 127 days, peaking at 138 days in 2021 and then improving to 123 days in 2022, the most recent data collected.
“This may indicate a positive sign that industry is adapting and working towards addressing ongoing challenges,” FSRA says in the report. “On average, the duration to resolve claims in 2022 ranged broadly from as long as 180 days to as short as 47 days.
“Longer durations to resolve claims can put financial strain on customers who are relying on indemnity payments for recovery.”
Some home insurance claims are taking longer to settle, agrees Jesica Ryzynski, claims specialist at Ontario brokerage Mitch Insurance.
“However, it’s important to note that companies are not looking to deny claims,” she tells Canadian Underwriter. “In fact, I’ve been more surprised by situations where claims were covered than I have been by claims being denied.”
Several reasons for delays
Ryzynski says there are several reasons for the varying durations for claims resolutions between insurers. For example, depending on the insurer, they could be dealing with significant adjuster shortages — an industry-wide issue. “Staffing is an ongoing issue, both with adjusters and contractors.”
It also depends on the area where the loss occurred. If the area is quite rural, there could be longer wait times to have contractors attend the property due to fewer contractors in the area. Fewer contractors can also result in longer wait times for estimates to be completed, and cause delays in getting repairs started, Ryzynski says. As well, a catastrophic weather event that impacts many homes in one area can put a strain on available adjusters and contractors, especially if a large number of those homes are insured by the same company.
“It’s important for brokers to know their markets, and we need to be familiar with the claims departments for each insurer we represent,” she says. “If we know that a company is understaffed, we can advise our clients upfront that there may be delays.”
Brokers can assure clients they’ll receive help, but it could take longer than usual. “We should also set the expectation that local contractors may be overwhelmed, and this could cause potential delays as well.”
Ryzynski says it’s crucial when dealing with insurers and assisting clients to focus on the reasons why the issues raised in the FSRA report exist. She adds the report includes several instances where companies involved clearly showed they’re trying to mitigate the issues and find solutions. “These include recruitment and retention efforts for claims staff, increasing training and feedback for staff, and building a broader network of independent adjusters,” FSRA’s report adds.
If it’s difficult to reach an adjuster due to staffing shortages or a large weather event, brokers can support clients by listening to their concerns, answering their questions when possible, or finding the answers for them. Keeping clients informed, even with limited updates, is crucial when they are dealing with a claim, Ryzynski says.
“We need to be available to our clients throughout the claims process and keep them informed even when there are no updates,” she says. “Sharing that there’s no news is still news, especially when a client is waiting.”
Feature image by iStock.com/ArtistGNDphotography
