Insurance Settlement Offer in Canada: How to Review It
The headline dollar amount is only one part of a settlement. Review the covered scope, valuation basis, deductible, limits, depreciation, taxes and payment conditions before deciding whether the offer matches the policy and documented loss.
Settlement Offer
Ask for an itemized written calculation. Compare it with the policy, inventory and estimates; identify omitted or differently valued items; clarify recoverable depreciation and tax treatment; and understand any release before accepting it as final.
Reconstruct the calculation line by line
Ask the adjuster for the covered repair scope or item schedule, unit values, depreciation, policy limits, sublimits, deductible, taxes and prior payments. Separate undisputed amounts from items still being reviewed.
A lower total may result from an exclusion, an item sublimit, the deductible, actual cash value, a repair estimate or a factual disagreement. Those are different issues and should not be challenged as one vague shortfall.
Match replacement cost and actual cash value to the policy
Replacement-cost coverage and actual-cash-value settlement are not interchangeable. Some policies initially pay a depreciated amount and make additional payment available only after eligible property is repaired or replaced within the required process.
Ask which amount is payable now, what depreciation may be recoverable later, what proof is required and which deadline applies. Do not assume every replacement-cost policy uses the same sequence.
Compare estimates on the same scope
A contractor's total and an insurer estimate cannot be compared fairly unless they describe the same materials, quantities, labour, permits, code upgrades, taxes and access conditions. Mark every scope difference rather than comparing bottom-line totals alone.
For contents, compare descriptions, age, condition and comparable replacement items. For business interruption, keep lost income, continuing expenses and extra expense calculations distinct from physical-property repairs.
Understand the effect of a final release
A payment can be an advance, an undisputed amount or a proposed final settlement. Ask which it is. Read any release and confirm whether accepting it closes the entire claim or only a defined portion.
If significant damage, legal rights or technical evidence remain disputed, independent professional advice may be appropriate before signing a final release.
Use your own figures without manufacturing a claim outcome
Test a transparent limit-and-deductible example, then compare it with the insurer's real itemized calculation.
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