Can an insurer force an appraisal process on you under Ontario’s Insurance Act?
No — not automatically. A recent Ontario Superior Court decision confirms that a court retains discretion to refuse appraisal under s. 128 of the Insurance Act when a threshold legal question must be resolved first. In Dutremble et al v. Heartland Farm Mutual Inc., 2026 ONSC 3230 (CanLII), the court dismissed the insurer’s motion to compel appraisal, finding that an unresolved dispute about the correct valuation date was a matter of policy interpretation — something appraisers simply cannot decide.
The underlying principle — that procedural shortcuts cannot be used to sidestep unresolved legal questions — is one Ontario courts apply broadly. If you are dealing with any kind of insurance claim dispute, understanding how this process works matters.
What is appraisal under s. 128 of the Insurance Act?
Appraisal under s. 128 is a mechanism that allows either party to a property insurance dispute to demand that an independent appraiser quantify the amount of a loss. The idea is straightforward: if the only real disagreement is how much the loss is worth, a formal court process may be unnecessary. An appraiser can assess the value and help resolve the dispute faster and more cheaply.
However, appraisal has a strict boundary. It covers valuation only — not questions of coverage, liability, bad faith, or how the policy should be interpreted. Those legal questions belong to the court.
Is appraisal mandatory once one party demands it?
No — the word “may” in s. 128 signals discretion, not an automatic right. Even when one party demands appraisal, a court can refuse to compel it where the dispute is not purely about value. If a threshold legal question must be answered first, appraisal is premature and the court can decline to order it.
In Dutremble, the real disagreement was about the correct valuation date — and that is a question of policy interpretation, not a simple number an appraiser can supply. Sending the parties to appraisal would have asked appraisers to assume the answer to a legal question they have no authority to decide, so the court dismissed the insurer’s motion.
When will a court refuse to order appraisal?
A court is likely to refuse appraisal where:
- The parties dispute how the policy should be interpreted (for example, the relevant valuation date), not just the dollar value of the loss.
- There is an unresolved question of coverage, liability, or bad faith that has to be decided before any valuation makes sense.
- Forcing appraisal would require the appraisers to effectively rule on a legal issue outside their mandate.
The guiding principle is that appraisal is a tool for quantifying an agreed-in-principle loss — not a shortcut around genuine legal disputes.
What did the court order instead?
Rather than compel appraisal, the court kept the dispute on a litigation track and ordered the policyholders to deliver their proof of loss within 60 days. A proof of loss is a sworn statement documenting the details and value of the claim, and missing the deadline set by the policy or the court can jeopardize the right to recover. Putting the proof of loss in place first sets up the valuation-date and any coverage questions to be resolved properly.
What this means for policyholders
If your insurer is pushing you toward appraisal, the key question is whether your dispute is truly only about value. Where it also involves how the policy is interpreted, whether the loss is covered, or whether the insurer has acted in bad faith, appraisal under s. 128 cannot resolve those issues — and a court may refuse to order it. Keep your proof of loss accurate and on time, and get legal advice before agreeing to a process that may not fit your dispute.
This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.
FAQ
Frequently asked questions
Appraisal under s. 128 of the Insurance Act is limited to quantifying the dollar value of a loss and cannot decide coverage, liability, or policy interpretation questions. Arbitration is a broader dispute-resolution process that can address legal issues, making it more suitable when the parties disagree about whether a claim is covered at all.
Yes. Ontario courts recognize bad faith claims against insurers where an insurer unreasonably denies or delays payment of a valid claim. Bad faith is a legal question for the court and cannot be resolved through the appraisal process under s. 128 of the Insurance Act.
A proof of loss is a sworn statement you submit to your insurer documenting the details and value of your claim. Failing to deliver it within the timeframe set out in your policy or ordered by the court can jeopardize your right to recover, which is why the court in this case ordered the policyholders to deliver theirs within 60 days.