Questions & Answers about personal insurance
Following are some questions we are often asked about home and car insurance, with general answers from our own experience. Details will differ between policies from different insurers. If you have a specific concern about your insurance coverage, please talk to your broker for advice.
What is the difference between an insurance broker and an insurance agent?
An Insurance broker is an independent service professional who advises customers on insurance from multiple companies. Insurance agents are sales employees of the insurance company they represent.
Why should I use an Insurance broker?
- Your independent insurance broker offers a wide choice of products and price comparisons from a number of insurance companies.
- We give advice on your specific risks and the insurance protections most suitable to your situation.
- We can provide clear information about policies and explain the details of policies from different insurers.
- We can support and represent you in negotiations with the insurer if you need to make a claim.
How can I get the best rates on Auto Insurance?
- Have your broker provide a comparison of rates and policies from several insurance companies.
- Review the factors that affect insurance premiums with your broker and understand how these factors will affect your quote.
- Consider different limits to your liability coverage and choose your best balance of protection and cost.
- Consider raising your deductible to lower your premium rate.
- If you have an older vehicle, consider skipping comprehensive and collision coverage.
- Review your eligibility for car insurance discounts offered by different insurers, such as “good driver” rates or work-from-home discounts.
How does “accident waiver” protect me?
The accident waiver endorsement can protect your good driving record, so you continue to qualify for the lowest premiums. The waiver means that the Insurance company cannot penalize your rate for an at-fault accident involving the vehicle covered by the waiver.
Why should I carry a $2 million liability limit?
In the blink of an eye, you can find yourself involved in a major accident. You could face long-lasting financial distress if you are found liable for a death or major injury. Liability claims in excess of $1 million are increasingly common. For this reason, we usually recommend liability coverage for $2 million or more.
What is the meaning of “standard accident benefits”?
If you have been injured in a car accident, regardless of who caused it, accident benefits cover expenses not covered by OHIP. These benefits include coverage for rehabilitation, caregiving, and loss of income.
In Ontario, standard accident benefits are the minimum mandatory requirement for auto insurance. Your broker can also show you options to increase these benefits.
What is no fault insurance?
Ontario has a “no-fault” car insurance system, but this does not mean that no one is at fault in an accident. “No-fault” insurance simply means that, if you are injured or your car is damaged in an accident, you can deal with your own insurance company, regardless of who is at fault.
What is a “minor” accident?
As of June 1, 2016 – Insurance Companies in Ontario will no longer increase your premiums if you are involved in a minor at-fault accident. A “minor” accident is one which no payment has been made by any insurer, that there are no injuries, and that damages to each car and property were less than $2,000 per car and were paid by the at-fault driver.
This provision is limited to one minor accident every three years.
What is a deductible?
Most insurance policies specify a deductible, which is the amount you will pay out of pocket for any loss before you receive any payment from the insurance company. A higher deductible may reduce the cost of your policy. Your broker can help you decide on a deductible amount that is right for you.
Why does my monthly payment jump with a new vehicle?
The extra cost for your new vehicle can only be spread over the payments left in the term of your policy. Most plans are paid one month in advance. If you buy a new car just after you make a monthly payment, this often means you have 2 less months to spread the premium over. A $100 additional premium might cover 4 months of coverage, but you have only 2 installments to spread it over, prior to your renewal.
Can I loan my vehicle to someone for a short time?
Yes, you can, normally. But if you loan your vehicle, you are loaning your insurance as well. You should make sure the driver has a valid driver’s license. If there is also a change in use or garage location, notify your broker.
I have a septic tank: why do I need Sewer Back-up Coverage?
Standard coverage for water or sewer backup pays you for water damage from various sources, covering the structure of your home or personal property. You are covered if the water is discharged or overflows from a storm sewer or drain, from a sump or sump pump, or from related equipment, or even if the overflow or discharge occurred because of mechanical issues.
How can I lower my homeowner’s insurance premium?
- Shop around. Call your broker who can compare multiple insurers.
- Increase your deductible.
- Stay with the same insurer.
- Buy your home and auto policies from the same insurer.
- Make your home more disaster resistant (eg: vs fire or flood).
- Improve your home security.
- Maintain a good credit record.
- Review the limits in your policy and the value of your possessions at least once a year.
- Ask your broker about special discounts.
- Remember that real estate values are not the same as rebuilding costs when you are calculating the coverage you need.
What is a deductible?
Most insurance policies specify a deductible, which is the amount you will pay out of pocket for any loss before you receive any payment from the insurance company. If you have more than one claim, you will pay the deductible each time. A higher deductible may reduce the cost of your policy. Your broker can help you decide on a deductible amount that is right for you.
What is Single Limit?
Home policies typically include several separate coverage limits: The dwelling itself; detached structures; home contents; and additional living expenses. A “Single Limit” policy allows you to combine all of your coverages when one of the coverage limits is not enough to pay for your loss.
What is GRC or Guaranteed replacement cost?
Guaranteed replacement cost is an enhanced type of dwelling coverage that you can add to your policy. If your home is destroyed in a disaster, a GRC policy will pay whatever it costs to rebuild your house, regardless of your coverage limits.
Are my tools in my garage covered under my home policy? What about my jewellery, is there a coverage limit?
All policies differ and you should review these items with your broker. Special limits may apply to certain items that you own, especially if they have higher than usual value.
I have a septic tank: why do I need Sewer Back-up Coverage?
Standard coverage for water or sewer backup pays you for water damage from various sources, covering the structure of your home or personal property. You are covered if the water is discharged or overflows from a storm sewer or drain, from a sump or sump pump, or from related equipment, or even if the overflow or discharge occurred because of mechanical issues.
Does my home insurance policy cover my valuable possessions such as artwork or jewellery?
Yes, but for limited amounts of coverage. You may want to consider buying a “floater” for personal articles, which will provide all-risk coverage that includes theft and “mysterious disappearance.” It will also reimburse you for misfortunes such as a stone that falls out of a ring.
Why do I need an appraisal?
Over the years, the value of your jewellery and gemstones can fluctuate greatly. If your jewellery has increased in value since you set up your policy, you may risk a substantial financial loss if these items are lost, stolen, or damaged. For your protection, we recommend you have your jewellery reappraised every two years.
Can I insure collectibles?
Art and collectibles are not always insured automatically. But most insurers will allow you to add these items to your homeowners, renters, condo, or policy. Special collections and works of art should be appraised and discussed with your broker to ensure they are protected.
What is Home-based Business Insurance?
An insurance plan for a home-based business will cover your office equipment, business inventory on- and off-premises, and business interruption insurance if anything were to happen to your home because of an insured loss. Most importantly, it will cover you for additional liability for clients, delivery personnel, and employees.
Does Home Insurance cover Home-based businesses?
Not really. Your home insurance policy is likely to leave out key coverages that you need to protect your business and its assets, such as:
- Lawsuits filed against you and your business
- Bodily injury or property damage caused by a product you make or sell
- Damaged or stolen business inventory
- Business equipment that is damaged or causes an electrical fire
- Temporary closure and loss of income due to a fire or sudden disaster
- Slips and falls injuring a business visitor
- Property damage you cause to someone else.
Why is flood insurance not included on my Homeowner’s Policy?
While your homeowner insurance may pay for water damage due to broken pipes, flood insurance pays for damages caused by the rising of a body of water that covers normally dry land. Some insurers may refuse to offer flood insurance in areas prone to frequent flooding.
What is the difference between Overland Water coverage and Flood insurance?
“Overland water” is covered by home insurance, and it includes fresh water from an overflowing river or water from heavy rainfall or a rapid spring thaw.
“Flood” refers to rising water along the shoreline of the ocean or a large lake, including tsunamis, tidal waves, and storm surges. Floods are not normally covered by standard home policies.
What is an Enhanced Water Damage Package?
This is a special package designed to combine up to four types of water damage protection. Insurers have different ways of naming and packaging this kind of policy, but it will generally include Sewer Back-up, Water and Sewer Lines; Overland Water; and Ground Water (optional). Your broker can advise you on which policies are best suited to the specific location of your home.
Do I have to notify my insurance company before doing a renovation?
- It’s important to keep your insurance provider in the loop as certain circumstances could invalidate your home insurance.
- Review your renovation plans with your broker to ensure that your policy covers the new cost of rebuilding the improved home.
- Depending on the type of renovation, some of your existing coverages may be suspended.
How can renovations reduce the costs of my home insurance?
If your contractor upgrades the home’s electrical or plumbing systems during a kitchen or bath renovation, you could qualify for an insurance discount. However, you will need to advise your insurance provider of the changes to the home and ask if you are eligible for a discount.
What is the difference between a “vacant” and “unoccupied” home?
When a property is being renovated but you are able to leave furniture and other personal property inside safely, the home is typically considered “unoccupied.” If you temporarily moved out to facilitate the project, and you remove your property to store it elsewhere, the property is considered “vacant.” The difference between “vacant” and “unoccupied” can affect the validity and coverages of your insurance.
Is my swimming pool insured under Home Insurance?
Because it is a detached structure, like a shed, damage to your pool is not covered under your homeowner policy unless you specifically add coverage.
Am I liable if someone drowns in my swimming pool or hot tub?
A number of legal responsibilities come with swimming pool ownership, especially regarding safety codes. If you fail to follow safety regulations, you can be held liable if someone drowns in your pool.
Does a hot tub affect my Home Insurance?
Damages to your hot tub may not be covered by a standard homeowner policy unless you have explicitly added coverage for it.