by Colin Moor, CAIB | Aug 30, 2014 | Research Centre
This question seems to come up each year and around the same time…at renewal!
The goal of this article is to assist you in having a better understanding of what goes into determining premiums for personal lines policies, like automobile and property risks.
Because there are different factors between automobile and property, let’s break this topic into two sections.
AUTOMOBILE INSURANCE
Factors and trends used to form automobile rates are:
- Territory or Where the vehicle is most often used;
- Age of drivers in the household;
- Number of vehicles compared to number of drivers in the household;
- If the driver is under 25 years of age, the age and sex are determining factors;
- Claims (the number of ‘claims free’ years differs by each insurance company’s criteria);
- Convictions in the past three years;
- Use of the vehicle (commute to work, pleasure use only, business use);
- Make, model and age of the vehicle(s);
- Coverages you have chosen (Liability, Collision, Comprehensive and Endorsements).
Depending on your insurer’s offerings, there are numerous discounts that can be applied. It is always important to ask your broker to review all the discounts available to you.
PROPERTY INSURANCE
Factors and trends used to determine property rates are:
- Territory or where your home, condo or apartment is located;
- Distance to a fire hall and fire hydrant;
- Building materials of the dwelling (concrete, frame, brick etc.);
- Use of dwelling (strictly personal use or partial business use);
- Unique features within the dwelling (custom finishing versus builder’s grade);
- Floor, ceiling and wall finishing (plaster versus drywall);
- Claims (the number of ‘claims free’ years differs by each insurance company’s criteria);
- Style of dwelling (two story, split level or high rise versus triplex or townhouse);
- Coverages you have chosen (all risk coverage versus named perils coverage and endorsements).
Again, there are many discounts that can be applied. Ask your broker to review all available discounts to you.
There are other factors as well that are completely determined through each insurance company’s system that your broker can look into for your unique risk.
Don’t be afraid to call your independent broker for clarification. As brokers, that’s our commitment to you… to service you and provide sound and educated advice.
by Eddie Rodriguez, CAIB | Jul 26, 2014 | Research Centre
A THIEF CAN STEAL YOUR CAR IN AS LITTLE AS TWO MINUTES. A SMASH AND GRAB ROBBERY CAN HAPPEN IN SECONDS. IF YOUR CAR HAS A GPS DEVICE WITH YOUR HOME ADDRESS PROGRAMMED INTO IT, A THIEF CAN ROB YOUR HOME TOO!
One recent story involved a car break-in at a local sporting event. The thieves targeted cars in the fan parking lot knowing the owners would be watching the big game. A window was smashed and some money, a portable GPS unit and a remote garage door opener were stolen.
The thieves used the GPS system to guide them to the house. Then they used the remote control to open the garage door and gain entry to the house. Since the thieves knew what time the game was scheduled to finish, they had tome to clean out the house.
Thieves are only interested in what’s quick and easy. If you make it hard for them to break in, they’ll just move on to the next target.
TIPS FOR YOUR CAR
- If you have a portable GPS system or remote garage door opener, hide them well or take them with you when you leave the car.
- If your GPS has a key or password lock, use it. If it doesn’t, don’t put your home address in it. Instead program a nearby address (like a store or gas station) so you can still find your way home if you need to, but a thief can’t find out where you live.
TIPS FOR YOUR HOME
- Lock your doors. Even the best lock can’t protect you if you don’t use them.
- Be seen and safe. Trim hedges and bushes so your home is visible from the street.
- Know your neighbours. Neighbours who look out for each other are among the best, and least expensive, defence against crime.
- Keep it well lit. Make sure all outside entrances-front, back and side-have good lighting so burglars can’t easily hide.
Install a monitored alarm system. An alarm provides great protection against burglary and fire, but only if you use it.
by Eddie Rodriguez, CAIB | Jul 26, 2014 | Research Centre
DON’T LET A TORNADO BLOW YOUR ASSETS AWAY
ON AUGUST 21, 2011, THE FIRST F3 TORNADO IN OVER 15 YEARS HIT THE LAKESIDE TOWN OF GODERICH, ONTARIO, CAUSING OVER $75 MILLION DOLLARS IN DAMAGE. LIKEWISE, ON JUNE 6, 2010, AN F2 TORNADO WENT FROM HARROW THROUGH KINGSVILLE AND LEAMINGTON, ONTARIO, BEFORE DISSIPATING NEAR POINT PELEE NATIONAL PARK, CAUSING $120 MILLION DOLLARS IN DAMAGE.
These tornadoes are a vivid reminder of the threat windstorms pose to life and property, as well as emphasize the importance of having the right insurance coverage.
No matter where you live, you need to have the right amount and type of insurance in order to recover financially after a natural disaster.
Across Canada, Ontario, Alberta, Manitoba and Saskatchewan average the most tornadoes per season, at approximately 15, followed by Quebec with less than 10. New Brunswick and the interior of British Columbia are also recognized tornado zones. All other provinces and territories have significantly less threat from tornadoes. The peak season in Canada is in the summer months when clashing air masses move north, although tornadoes in Canada have occurred in spring, fall and in the rarest of cases, winter. This differs from the United States’ southern-central plains, when spring is the most prominent season for tornadoes.
For a variety of reasons, such as Canada’s lower population density and generally stronger housing construction, due to the colder climate, Canadian tornadoes have historically caused fewer fatalities than tornadoes in the United States.
The standard homeowners and business insurance policy covers wind damage including that caused by tornadoes to the structure of the building and contents including broken windows and removal of debris.
However, you should make sure your coverage limits reflect the cost of rebuilding the structure, removing the debris and fully replacing personal belongings.
It’s important to make sure you have purchased ‘replacement cost coverage’ on your business policy and your homeowners’ insurance policy. If you have a business policy, it is also important that you carry ‘blanket bylaws coverage’ on your policy.
A homeowners’ policy also provides ‘Additional Living Expense (ALE) coverage’ to pay the costs of living away from home if you cannot inhabit your house due to damage from an insured disaster.
The policy ALE provision covers hotel bills, restaurant bills, and other living expenses incurred while away from your home, while it is being repaired or rebuilt.
‘Guaranteed Replacement Cost (GRC)’ or ‘Additional Rebuilding Cost (ARC)’ is another homeowner’s insurance coverage that can provide extra coverage, over and above the limit you have on your home insurance policy.
For example, let’s say you have your home insured for $400,000 – a tornado destroys 200 homes in your area, and building costs and inflation cause the replacement of your home to be $450,000. The GRC and ARC coverage’s would pay this additional amount subject to the terms and conditions of your policy. Make sure you review these coverages with your broker.
If you own a business that has been damaged, ‘business interruption coverage insurance’ is important to make sure you have revenue to continue to make your payments when a tornado has impaired your business. There are many different forms of business interruption, and as a business owner, you should review this on a regular basis with your insurance broker.
Damage to cars, trailers, motor homes and ATV’s are covered under the ‘comprehensive optional coverage’ portion of the policy. Marine insurance policies will usually cover damage to boats from wind.
Please make sure you review your insurance policies with your insurance broker on a regular basis to make sure your assets don’t get blown away, should a Tornado destroy or damage your home and business. With changing weather patterns, your home could be the next target.
For more information on your coverage options, call your insurance broker.
by Eddie Rodriguez, CAIB | Jul 26, 2014 | Research Centre
WATER DAMAGE CLAIMS HAVE BECOME A BIG PROBLEM FOR CANADIAN HOMEOWNERS. REASONS FOR THE INCREASE CAN BE TRACED TO CLIMATE CHANGE, LIFESTYLE CHANGE AND AGEING INFRASTRUCTURE. MOST HOMEOWNER POLICIES COVER WATER DAMAGE THAT HAPPENS SUDDENLY AND ACCIDENTALLY, BUT MAY NOT COVER SEWER BACKUPS (WHERE SEPARATE COVERAGE IS NEEDED).
Slow leaks and water seepage that occur over time may also not be covered; quite often they’re considered home maintenance.
And if a flood happens from a local river swelling, you’re likely not covered for that either. So. What to do? Prevention! The first place to start is your sump pump. How old is it? When was the last time you checked it? To ensure it’s working properly, lift the cover and slowly pour water into the sump tank; watch for the float to rise and trigger the pump to activate. Once the water level is lowered, the pump should turn off. Additional tips:
- The pipe that carries the water out of your house should be at least 2 meters from the building, and the water should flow away from your house
- A battery backup is great to have in case of a power failure – make sure the battery is always fully charged
- Remember to check your roof – is it reaching its best before time? If in doubt, have a professional roofer take a look
- Make sure any belongings that are stored in your basement are placed in plastic bins located off the floor
- If you’re converting your basement to a living area, use water resistant materials
What about lifestyle?
Things like dishwashers, hot tubs, hot water heaters, washing machines and water-dispensing fridges are all appliances that have the potential to leak.
Keep an eye on your water bill. If it seems it’s increasing without reason, check the hoses and connections to your appliances. If they’re plastic, consider changing them to CSA approved stainless steel braided hoses. And consider having someone take a look at your hot water heater – their life span is usually only ten years.
Need advice? Call in a professional for recommendations and ask your insurance broker to confirm what’s covered in your policy.
by Colin Moor, CAIB | Jan 2, 2014 | Research Centre
January 2, 2014. Parts of Ontario continue to be without electricity. Therefore, some people may have left their home as power is being restored. Here are some home insurance coverage reminders as well as some timely safety tips.
Homeowners insurance policies do not cover losses caused by freezing during the usual heating season in a heated portion of the home if someone has been away from their home for more than four consecutive days, UNLESS the homeowner has:
- arranged for a competent person to check the home daily;
- shut off the water supply and drained all the pipes and domestic water containers; or
- their plumbing and heating system is connected to a monitored alarm station.
If you do leave your property remember to:
- Turn off the main water valve and drain water from the pipes and flush toilets several times. Keep the basement drain clear.
- To prevent a power surge when the electricity does come back on, unplug all tools, appliances and electronic equipment and turn the thermostats down to minimum.
- Turn off all lights including Christmas lights, except one inside and one outside, until power is restored.
- Leave natural gas service on unless authorities tell you to turn it off.
- Lock your home.
Here are some other ways to keep safe, even if you do stay in your home:
- To prevent frozen pipes turn the taps on slightly so water can trickle through as pipes with running water will not freeze. Alternatively, turn off the main water supply and open the pipes completely.
- Take extra caution when using a wood-burning fireplace.
- Use a flashlight and not candles to reduce the risk of fire.
- Do not use appliances intended for outdoor use indoors, such as camping or heating equipment and gas barbecues.
- Keep your fridge and freezer door closed as much as possible. A full freezer will keep food frozen for 24 to 36 hours if not opened.
- If you see downed power lines, stay far away and report them to your local power authority.
Once power is restored:
- Do not enter a flooded basement unless it is absolutely safe to do so.
- Flooded appliances, electrical outlets, switch boxes or fuse-breaker panels should not be used until they have been checked by an electrician.
- Replace the furnace flue if removed, and turn off the fuel to the standby heating unit.
- Turn the thermostats up, wait a few minutes, then plug in the fridge and freezer back in. Wait 10-15 minutes before plugging other appliances back in.
- Turn on water supply.
- Check the food in your fridge and freezer for signs of spoilage. If in doubt, throw it out. Check the Food Safety website for details about specific foods
