Personal Insurance FAQ

While we will always compare insurers and packages to ensure that you have the best combination of price and coverage for your individual needs, often it is beneficial to have your entire portfolio with one insurer. Most insurers offer additional discounting, for example, for combining home and auto coverage together with one provider. Also, the size of your portfolio and the length of time it has been with one insurer can give you more leverage with that insurer when special consideration may be required for premium rating, unusual coverage circumstances, or claim situations.

You will need to provide the serial number for the vehicle (bill of sale would be helpful), any lien/lease information on the unit, the drivers license(s) for any relevant drivers, an insurance claims history letter from your prior insurer if the vehicle is from out of province, and a drivers abstract. If you are planning to utilize a payment plan, then banking information and a down payment will be required. Finally, if the vehicle is over 12 years of age, we will require a vehicle inspection report.

The first point to be considered in this situation is this: if the claim is “very minor,” should you report it at all? Insurance serves as your safeguard against major financial loss in the event of a sudden, accidental, and unforeseen event. Therefore, if the damage to your vehicle, or that of a third party, is “very minor,” consideration should be given to paying for it yourself without reporting the claim to the insurer. As most at-fault accidents will incur a deductible before monies are paid, the more minor the damage, the less sense it makes to submit a claim. The actual amount of a rate increase will depend on your driving record and previous claims history, but, in most cases, rates will increase if you submit a claim. However, with most insurers, your first accident may be either forgiven or the effect of it on your rating may be lessened. After that though, first-accident rates will increase with each subsequent claim. Don’t waste this opportunity on a minor claim!

There are a number of reasons why we add drivers to a policy. The SPF 1 (Standard Policy Form) contains coverage provisions for insured person(s). It is important to ascertain that they benefit from coverage in the event of an injury or damages. As a legal contract, statutory conditions dictate rules pertaining to use and operation that need to be complied with regarding any changes involving use and operation of the insured vehicle. By listing a driver, his or her insurance history is initiated, which provides a key element in establishing rate. A driving history will allow the insurer the ability to screen persons having undesirable driver history (i.e. convictions, insurance claims/license experience).

The insuring agreements permit use of vehicle by persons not named. However, the auto application requests driving information on all licensed drivers in the household. Operators in the household will have access to the vehicle and the insurer has a right to be informed of any added exposure they may be subject to in underwriting the insurance policy whether the intent is for them to drive or not.

If you have consent to operate someone else’s vehicle, then their insurance shall respond for damages you are held liable for as well as provisions available under Section B for injuries sustained.

In most circumstances, you should still report the accident to your broker in order to protect yourself in the event that the small motor vehicle accident develops into something more major. For example, the third party may decide to change their story and try to place some of the fault on you, thereby implying responsibility for bodily injury not addressed at the time of the accident. Also, check with your local authorities for the guidelines regarding when you must report an accident to police, which would then require you to report it to your insurer.

This is a matter of personal preference, based on your individual financial situation. If you feel that you could absorb any repair costs incurred to your vehicle in the event of an at-fault accident, then you may be able to do without collision coverage. Keep in mind, however, that without collision coverage in place in that situation, you may not be eligible for replacement vehicle coverage while your vehicle is being repaired. You should also consider that, in the event of a hit-and-run accident, if you do not carry collision, your insurer may not respond to repair your vehicle, even though the accident was not your fault.

Auto insurance is designed to respond to events directly related to an automobile and its normal operation (accidents, theft of the vehicle, vandalism, bodily injury, legal liability, etc.). Auto policies cannot take into consideration all the possible personal items that might be carried in your vehicle. Some drivers might only have a purse or a few CDs in their vehicle, while others might carry their luggage for a vacation, or their hockey equipment bag. If auto insurers contemplated all of these possibilities and rated accordingly, comprehensive rates (for fire, theft, vandalism, etc.) would skyrocket. Since property policies (homeowners, condo, tenant packages, etc.) are designed and rated for personal property, they are best suited to respond to these types of claims.

Yes, but only in certain circumstances. The SEF 20 – ‘Loss of Use’ – standard endorsement form provides for reasonable expenses incurred for a rental vehicle or other transportation if the insured vehicle is not drivable due to loss or damage caused by an accident covered under Section C (Collision, Comprehensive, All Perils, or Specified Perils) of the policy. This means that if you are involved in a covered accident, your insurer will provide for you to rent a replacement vehicle of a similar type to the one being repaired, up to the limit declared on your policy, while your vehicle is being fixed.

Whether you’re on vacation or just want to try out a convertible on a sunny day, rental vehicle agencies always try to sell you additional insurance coverage that you may already carry. If your policy shows that you have an SEF 27 – ‘Legal Liability for Damage to Non-Owned Auto’ standard endorsement form, you have coverage for legal liability or liability assumed under a written agreement (such as a rental contract) for damage to someone else’s vehicle, subject to the limit declared on your policy. However, read the contract carefully as some rental agencies are including other items that are waived when you decline to purchase insurance through them, such as their loss of rental income on a vehicle, which may not be covered, even by the SEF 27.

GRC – Guaranteed Replacement Cost – provides the peace of mind in knowing that, in the event of a catastrophic loss, your home will be rebuilt to the same standard of construction, with materials of like kind and quality, regardless of the value declared on your policy, subject to the insurers’ terms and conditions. For most insurers, one of those conditions is that an evaluation of the home be done at least every five years (three years in some cases) to ensure that the most accurate information is available and that fluctuations in construction, design and labour costs are being considered. One of the methods for performing this evaluation is with Residential Component Technology (RCT) where a wealth of information about the home is input into a computer program that produces a Replacement Cost value, based on national and local data for rebuilding costs. The technology is often sophisticated enough to show differences right down to the postal code in which a residence is located. Keep in mind that replacement cost is different from market value (what you could sell your home for), property value (which includes land value that is not insurable), and the value you see on your tax assessment.

“Vacancy,” by definition, refers to a dwelling in which there are no personal belongings and to which the insured party has no intention of returning for residence. Basically, the home is empty and you don’t intend to live there yourself again. This is different from “unoccupied,” which refers to a dwelling that still has personal property in it and to which you intend to return after a brief absence, such as a vacation. While an unoccupied home only requires that you take reasonable precautions to ensure the integrity and security of the home (these will differ from insurer to insurer), a vacant dwelling requires an endorsement (change) to the policy granting permission for the home to be vacant and, often, the completion of a questionnaire regarding the reasons for the vacancy, the anticipated duration and steps taken to have the home adequately looked after in your absence.

Simply put, water damage refers to the sudden and accidental escape of water or steam from plumbing, heating, sprinkler, or air conditioning systems, or, that comes in (suddenly and accidentally) through an opening created by an insured peril (i.e. a tree falls on the house and creates a hole in the roof through which water enters the home). With some exceptions, these losses are covered. One notable exclusion to water damage coverage is that coverage is NOT provided by the policy for damage caused by the backing up or escape of water from a sewer, sump, or septic tank system. This coverage, often called Sewer Backup, can be purchased at a reasonable premium to provide protection for your dwelling and contents in the event of a loss of this nature.

All insurers place limitations on the amount they will pay out in the event of a claim for theft of or damage to jewelry – some as low as $3,000 total, per event, and subject to the policy deductible. For many people this is adequate coverage, but, if you have individual pieces of jewelry (or watches, furs, or fine arts, for example) that have a value greater than the special limit applied to these items, “scheduling” can be a valuable alternative. All we require to schedule these items is an appraisal of the piece by a qualified appraiser, providing a complete description and value for the piece. You then have the peace of mind in knowing that in the event of a total loss of a scheduled item, you will receive the declared value on the policy, and, in most cases, will pay no deductible. Additional premium is charged for each scheduled piece based on its value. Usually, a new appraisal is required every three years to ensure that a proper value is being insured.

While this is certainly a personal decision based on a wide variety of factors, most Albertans carry at least $1 million in third party liability – be it on their auto or property policies. Some of these factors for auto include: premium charged for higher limits; amount of driving done in a vehicle; the nature of the use of a vehicle; if, and how often a vehicle may be taken into the US; and, how the individual is perceived in their community (professionals, such as doctors, lawyers, sports and entertainment personalities, etc., will often carry higher limits of liability, as they are often more likely to be sued). On the property side, if you have more than one property, or, if you own rental properties, higher limits are often desirable, and can often be obtained for minimal additional premium.

Deductibles serve to reduce your annual premium by increasing the amount you will pay out of pocket in the event of a claim, thereby reducing the insurer’s exposure to loss. Basically, you need to look at how much you would be able to afford to pay yourself in the event of a claim. The standard property deductible is $500, but, by increasing it to $1,000, you could realize as much as a 20% savings, depending on your insurer. Higher levels are available that provide even greater savings. If your approach to insurance is that you would only ever submit a claim in a large loss situation, this option may be for you, as you can save a lot of premium dollars, with little effect on your actual insurance position. On the auto side, many of our clients will increase their collision deductible to $1,000 for the same reason – you can realize premium savings (especially on newer vehicles).