When Insurance Claims Get Denied: Ontario Court Cases That Show Why Honesty and Disclosure Matter

Short answer

Insurance claims can be denied or limited when an insured person misrepresents information, fails to disclose an important change, or provides inaccurate details during a claim. Ontario court cases have shown that honesty, accurate applications, and timely updates to your broker or insurer are extremely important.

Why disclosure matters in Ontario insurance

Ontario insurance contracts are based on what lawyers call utmost good faith. In practical terms, that means both the insurer and the insured are expected to be open and accurate. The Ontario Insurance Act and the statutory conditions in personal auto policies set out specific duties to tell the truth on the application, to report a material change in risk during the policy term, and to give accurate information when making a claim.

When those duties are not met, the consequences can range from a higher premium going forward, to coverage being limited for a specific loss, to the policy being voided. Courts look at each case carefully, but the pattern across decisions is consistent: accuracy and timely disclosure protect coverage.

Case 1, Wong v. Aviva (2024): rideshare and delivery use of a personal vehicle

The Wong matter, considered at both the Ontario Superior Court and the Court of Appeal in 2024, looked at a personal auto policy where the vehicle was being used for ridesharing and food delivery. The insurer took the position that this commercial use changed the risk on the policy and had not been disclosed.

Public lesson: if you start using your vehicle for paid driving, delivery apps, or any business purpose, that is generally considered a material change in risk and should be discussed with your broker. Some carriers allow rideshare with an endorsement, others do not. Doing nothing is the option most likely to create a claim problem.

• Tell your broker before you start driving for any platform
• Ask whether your carrier offers a rideshare or delivery endorsement
• If your carrier does not offer one, ask the broker to remarket your policy

Case 2, Euler v. Economical Insurance (2021): accuracy on the application

Euler v. Economical Insurance involved questions about how property and the people connected to it had been described to the insurer. The court considered whether the information given when the policy was put in place affected the insurer's later position on a loss.

Public lesson: the details on the original application matter, even years later. Things like who lives in the home, how the property is used, prior claims, and prior cancellations are the kinds of facts insurers rely on when they price and accept the risk.

• Read your application and renewal documents carefully before signing
• Correct any inaccuracies right away in writing through your broker
• Keep a copy of what you disclosed and when

Case 3, Davies v. AIG (2024): statements made during the claim

Davies v. AIG Insurance Company of Canada, decided by the Ontario Court of Appeal in 2024, considered statements made by the insured after a loss and the impact those statements had on the claim. The decision reinforces that the duty of honesty does not end when the policy is issued. It continues through the claim process.

Public lesson: even when a claim feels stressful or rushed, the information you provide to the insurer, the adjuster, and any examiner needs to be accurate. Guessing, exaggerating, or leaving things out can put coverage at risk.

• Take your time. Ask for questions in writing when you can
• Provide receipts, photos and records rather than estimates from memory
• If you are unsure of a fact, say so instead of guessing

What is a material change in risk

A material change in risk is a change in your situation that would affect how an insurer prices, structures or accepts your policy. The exact definition depends on the policy wording and applicable law, but common examples include:

• Starting to use a personal vehicle for rideshare, delivery or business
• Adding a regular driver who is not listed on the policy
• Renting out part of your home, including short-term rental
• Significant renovations, a new wood stove, or a swimming pool
• Starting a home-based business that brings clients to the property
• Vacancy of the home beyond what the policy allows

What to do instead, a simple checklist

• When in doubt, tell your broker. It is almost always easier to add a disclosure than to defend a denied claim
• Read your renewal each year and confirm the listed drivers, vehicle use, and property details are still accurate
• Keep notes and email confirmations of any changes you report
• Before signing any insurance application, read each question and answer carefully
• After a loss, gather documents before giving a recorded statement, and ask for time if you need it
• If a question feels legal rather than insurance, ask a lawyer, your broker can help you understand coverage, not interpret the law

How a broker can help

A licensed RIBO broker is on your side of the table. Part of the broker's job is to ask the right questions up front, help you describe your situation accurately, document changes during the policy term, and explain how each carrier views things like rideshare, home-based business, rental units, or seasonal vacancy.

BrokerUnion cannot guarantee that a claim will be paid. No broker can. What we can do is help you keep your policy accurate, raise the issues that often get missed, and make sure you understand what your insurer expects from you.

Important reminder

This article is for general education only. It is not legal advice and it is not a coverage opinion. Every claim depends on the wording of the policy, the facts of the situation and applicable law. If you are unsure whether something should be disclosed, speak with a licensed insurance professional. For legal questions about a specific decision, contact a qualified Ontario lawyer.

Property and casualty insurance in Ontario is regulated by the Registered Insurance Brokers of Ontario (RIBO). Life, critical illness, disability and group benefits products are placed by LLQP-licensed life advisors and are regulated by the Financial Services Regulatory Authority of Ontario (FSRA).

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