Do Home Insurance Companies Determine Fault?

Say you were slowing down for a red light during the wintertime when the roads were icy. You roll to a stop, and bam – someone behind you, who was going too fast and was too distracted to hit the brakes in time, rear-ends you from behind. In this instance, fault is relatively easy to place. In the aftermath, both drivers would make claims out to their own insurance companies – even with Ontario’s no-fault auto insurance system – and the at-fault driver may see a significant spike in their insurance rates from thereafter. They also must pay their deductible on top of those added costs.

Do home insurance companies in Ontario determine fault? Not exactly – but they can determine “responsibility.” See, as the homeowner and the policyholder, you are expected to care for your home. This is why losses due to wear-and-tear or lack of maintenance are generally not covered by your home insurance provider. Infestation, mold, and structural wearing are all examples of damages or losses that would not be covered by your home insurance company because they are preventable.

So no, technically, home insurance companies do not determine fault. Here is how that all works:

Being a responsible homeowner can significantly reduce your home insurance costs.

We all know that making a claim can cause our insurance premiums to rise come renewal time. No one wants that, especially with home insurance premiums on the rise. We do everything we can to protect our homes and reduce the risk of issues arising, such as performing regular maintenance, inspecting our roofs, checking for water damage, and getting appliances fixed the instant we notice that there might be a problem. However, when we aren’t being responsible, we let our bathtubs overflow and cause significant water damage to our kitchens.

That being said, even if we are being irresponsible homeowners and we have to submit a claim, the focus is not on “to what extent” we were an irresponsible homeowner. The next step is to deal with your home insurance company and see if the damage will be covered. Of course, irresponsible home ownership isn’t exactly the best thing, either – the more claims you make, the more expensive your premiums will be. On top of that, the more likely you are to have your policy cancelled, and you may find it more difficult to get insured later down the road.

Moreover, if the damage you cause to your home is intentional, or you try to make renovations and you damage your home, your claim will likely be refused and will not be covered. Home insurance companies will only cover you for a) things that are covered by your policy and b) damages that are accidental and/or sudden.

There are plenty of ways to save on home insurance, but being a good homeowner costs you very little and keeps your property in good repair for many years to come. Plus, it means no unnecessary claims.

What if I wasn’t responsible for my home insurance claim?

What if someone else caused damage to your home? First of all, the most important thing you can do when your home is damaged – no matter who caused it – is to submit a claim. Once you do, an insurance adjuster will be assigned to your case who you can consult with about the incident. They will investigate your home and take notes of the scenario. You should also ensure that the damage that was caused isn’t leaving any room for potential further damage. Document as much of the incident as possible – take pictures, find evidence, and see if you have any photographs of before the damage was caused. This will expedite the process of making a claim, ensuring that you get your settlement as quickly as possible. Once you’ve done what you can, it’s up to your insurance provider to determine who is responsible for the incident. Unlike with auto insurance in a not-at-fault situation, you may, unfortunately, still see an impact on your insurance premiums, and your deductible will likely still be triggered. However, there are instances where your insurance company will determine if the person who caused the damages should be responsible for reimbursement – depending on how responsibility ends up being assigned.

Making a home insurance claim

Accidents happen. If you do have to submit a claim, don’t get too down on yourself. You may see an increase in your premiums following a claim submission, but note that this doesn’t mean that your insurance rates will always be inflated. Given the current status of home insurance premiums in the province due to inflation rates and other global factors, this is good news!

In fact, some home insurance companies will waive your first claim and not increase your rates, depending on the severity of the claims. Other companies offer an endorsement to waive your first claim. Note that after three years with no additional claims, your rates may decrease again. Of course, if you are continually making claims – even for small repairs you could fix on your own – you can expect to see a significant increase in your premiums. For home insurance companies, the best predictor of whether you will make a claim in the future is your recent history. It doesn’t matter who was responsible.