Frequently asked questions about Insurance
Have a question related to business or personal insurance? Ask one of our experts. But before you do, take a look at past questions – the answer you’re looking for might already be below.
Q - How is a WETT certificate considered valid for insurance purposes? If sellers have one that’s 5 years old from their inspection, can buyers rely on it for insurance?
Thanks for asking Peggy. As you know, to validate that a woodstove or other wood burning appliance is safe, it’s common for insurance companies to ask for a “WETT inspection” or an inspection by a WETT Certified Technician – the results of which is often referred to as a “WETT certificate”. A 5 year old certificate could be accepted by an insurance company however it is likely that a new one would be required. In my opinion, a 5 year old certificate is better than none at all. The home purchasers can work with their Insurance Broker who would arrange an agreement with the insurance company where they would accept the certificate in the short term and then agree to have the new homeowners obtain one within a reasonable period of time after they complete the move-in process. What the clients need to decide is if they feel the inspection is worth the expense ahead of time, to determine if any larger problems have developed with the wood burning appliance over the past 5 years. Doing so ahead of time might allow their Realtor an option to negotiate a repair or reduction in price should any problems be identified through the WETT inspection process.
- Peggy Blair @peggy_blair (Peggy is an Ottawa Realtor, Mystery book writer and former lawyer. When insurance questions arise, Peggy often Asks the Expert – Rhodes & Williams Insurance Brokers. Here is the response:)
Q - I am going out of town on vacation, what do I need to do to make sure my insurance covers me if something happens?
A significant risk if you are travelling in the ‘heating season’ is freezing pipes that burst and leak water into your home. There are some critical steps you need to take in order to ensure your homeowners policy will pay a claim for water damage. They include shutting off the water and draining the pipes or having the home checked on a regular basis. Every insurer has slightly different requirements so be sure to check with your Broker so you don’t get stuck with a problem. You can also see more detail at our Passion for Protection Insurance Broker Blog
If you are travelling in the warmer summer months, the risks might be slightly different but again…check with your Broker for specific advice on the details of your absence. Our Brokers are always pleased to advise you on any precautionary steps you may need to take.
- Rhodes & Williams Client
Q - If you drive into a sinkhole, how does insurance work?
Although the ultimate decision about this type of claim rests with the particular insurance company, typically we would expect the claim would be handled under the “loss or damage section” of your auto under the ‘collision section’. If you sustained injuries from the accident, you would be entitled to compensation under the Accident Benefits portion of the auto policy subject to pre-determined limits. See further details in our blog
- Twitter User
Q - Is there coverage for my son or daughter who lives with me and drive my car?
Licensed sons or daughters, residing in your household must be reported to the insurance company where they will be noted as drivers on the policy. Typically children under 25 with a licence class higher than a G1, who are not the primary driver of any vehicle, will be listed as an ‘Occasional’ drivers and have a premium charge. In rare occasions where the child has a poor driving history (traffic convictions & accidents) there may be instances where the insurer excludes them from driving any vehicle on the policy by having you sign an “Excluded Driver Form”. Usually, coverage would automatically apply to children living away from your home who are not regular or frequent drivers of your vehicle, however you would want to check with your Broker about your obligations to have them noted on your policy or not. For more information see our blog: “If I get pulled over in mum’s car (she has insurance, I’m not on it) do I get in trouble? Will rarely drive car.”
- Twitter User
Q - Will my credit rating affect what I pay for insurance?
Right now there is legislation in place that disallows credit information to be used in the pricing of car insurance, but it is allowed in property insurance (house, renters, etc.). A credit score is a measure of your financial health which has traditionally been used by institutions to assess credit risk. Insurance companies argue that people who have strong credit scores will actually benefit from the use of credit scoring.
Credit scoring has been banned in Ontario and Alberta for auto insurance, and New Brunswick has become the first province to ban the practice outright for any type of insurance. Ontario is considering a similar move. Until then if a client chooses not to provide consent to check their credit score, we will honour their request; however, we may not be able to provide the most competitive premium. There will never be a surcharge for a poor or less desirable credit score, however there will be less of a discount applied in this scenario.
Q - Do I need to call my insurance broker when I do home renovations?
The short answer is yes! If you’re planning a renovation make sure you inform your insurance broker of your plans to ensure that your home insurance policy remains in effect during this time. Certain types of alterations to your property may affect your insurance policy and if something should happen you may find that your policy does not cover the perils you expected it to cover.
Renovations can increase the value of your home or change the classification of your policy. Vacating your home can invalidate your policy and you may be liable for injuries to workers on your property. The best idea is to work closely with your Insurance Broker and keep them informed of the extent of your renovations.
Q - How much third party liability insurance is enough?
Liability insurance ensures you are financially protected if you are held liable for a bodily injury or property damage loss. By law in Ontario you must carry a minimum limit of $200,000 on your auto insurance, however most people will opt for coverage limits of $1 -$2 million or higher. We recommend carrying a minimum of $2,000,000 on both your home & auto insurance. The difference in premium from $1 million to $2 million liability is an average of approximately $3/month. Each person has an individual need to be filled and your Insurance Broker can discuss the options available to you and find the right limit to suit your needs and your budget.
Q - Should I insure my boat with my home?
While insuring your boat with your home is often an option, there are a number of reasons why insuring your boat on a dedicated marine policy makes much more sense. Here are a few reasons:
- In the event that you do have to make a claim on your boat, you will be dealing with a marine adjuster who has the knowledge, expertise and industry connections to make sure your claim goes smoothly. This means getting your boat back in the water quickly.
- A claim on your boat will not affect the “claims free” discount you may be enjoying on your home policy and quite often the deductible is lower on a boat policy
- If your boat is 15 years or newer, your boat can be insured on an “agreed value” basis instead of merely on a “replacement cost” basis
- A marine policy will offer you additional coverages such as loss of use, emergency towing and personal effects coverage
Q - Does having signage on my vehicle mean it has to be rated as commercial for insurance purposes?
While having a sign on your vehicle is usually an indicator that it is used for commercial purposes, the true determination whether a vehicle should be rated is its actual use. During the quoting process, a Broker will ask questions to determine if a vehicle is merely used for pleasure purposes, commuting to work, occasional business or commercial purposes. The answers to questions such as “when is the vehicle used”, “do you carry books, tools, instruments for work?”, “do you visit clients?”, “do you claim your vehicle for business use on your income tax?” will assist in determining how the vehicle should be rated.
Q - If you were seriously injured in an auto collision, do you know what insurance benefits you would be entitled to?
Anyone injured in an accident involving a vehicle insured in Ontario has access to Standard Accident Benefit Coverages which includes income replacement, medical and rehabilitation, attendant care, death and funeral. However, you should know that the limits of coverage available to individuals were reduced by Auto Reform in September 2010. Individuals now have the ability to tailor their coverage to their specific needs and purchase additional coverage such as caregiver, housekeeping, home maintenance and dependent care. Check with your Broker for more information on the standard coverages available and your increase options.
Q - How much should I insure my home for?
Insuring your home for its accurate rebuilding cost is critical. Along with the specific details on the construction type, Brokers will also calculate the cost to remove debris and rebuild your home based on the square footage and other variables including the current cost of labor and building supplies. Typically, Brokers are equipped with software to accurately determine the proper amount for which your home should be insured.
Q - Is flood damage caused by a spring thaw covered by your home insurance?
During the spring, floods and the resulting water damage can be caused by a combination of snowmelt and heavy rains. If you’re not prepared, water damage can do permanent structural damage to your home. It is important to remember that not all water damages are covered by property insurance. Flood damage caused by a spring thaw is not covered under your home insurance in Canada. This includes any type of overland flooding as well as water that enters your home through seepage and leaks. (Please see a recent news release with available coverage)
Q - Am I covered under my insurance policy if I rent a car or do I need to buy it from the rental agency?
The basic auto insurance policy in Ontario does not automatically include coverage for rental vehicles.
If your policy has the Rental Car Endorsement, identified as Ontario Policy Change Form 27 (OPCF 27), then you need to be aware of some basic limitations.
Be sure to check with your Broker on the maximum limit they will cover for a rented vehicle, the restrictions on which drivers are covered and if there are territorial limitations. Many insurers only provide this coverage for rentals in the continental borders of Canada and the US.
Q - Do I have to wait until my renewal date to shop around for car insurance?
Absolutely not. You are free to get a quote at any point in the year. As an independent Broker, we will present you with our best offering whenever you like….and in cases where there may be small penalties to cancel early, the fees are often off set by the potential savings by moving to one of our insurers.
Q - What is a deductible?
A deductible is the portion you are responsible for paying in the event of a claim. For example, if your car insurance policy has a $1,000 deductible for collision and there are $5,000 in damages, you will pay the first $1,000 and the insurance company will pay the remaining $4,000.
Q - How can I lower my insurance costs?
To lower your premium, you could consider the following:
- Increasing your deductible – by increasing the amount you are willing to pay, you will decrease your premium
- Dropping collision coverage on an older car
- Bundling your car and home insurance
- Installing an alarm system in your home or an approved theft deterrent system in your vehicle
- Buying a car with a lower-cost insurance
Consult with your Rhodes & Williams insurance broker today if you would like to persue any of the savings strategies listed above.
Q - What is liability insurance?
If you are held liable for an injury or for property damage, liability insurance has you financially covered. Liability insurance covers the cost of damages for accident benefits, medical costs, lawsuits and awards in the event of personal injury or death from an accident involving the insured party.
Q - I was in a collision. My insurance company says I'm at fault or not at fault. What does this mean?
Your car insurance company is saying you were either responsible for this collision (“at fault”) or not responsible for it (“not at fault”). No matter how big or small a collision, your car insurance company will assign a percentage of fault to you and a percentage to the other driver involved. They base this percentage on a strict set of collision scenarios that have been established over time and are included in an official document called: “Fault Determination Rules”. Fault is not a judgment call and your insurance broker does not have the ability to change your at-fault rating. If you are considered fully (or even partially) at fault, your car insurance company is required to mark “at fault” on your insurance record. For further explanation, contact your Rhodes & Williams Insurance Broker.
Q - What is no-fault insurance?
Many provinces have some level of no-fault insurance in which each person’s own insurance company pays for injury or damage – up to a given limit. This applies regardless of whether or not the insured person was at fault, hence “no fault.”
In some provinces, they have a pure no fault insurance policy, while in others, such as Ontario, there is a threshold system in which “no-fault” really only applies up to a certain threshold of liability; injuries that are not “serious and permanent” are covered by your own insurance. For further explanation, contact your Rhodes & Williams Insurance Broker.
Q - Does my car insurance cover me outside of Canada?
Your car insurance usually still applies for short trips between provinces or into the continental United States. Make sure you talk to your insurance broker about the specific details of your own car insurance policy.
Q - What should I do if my home is going to be unoccupied?
Your insurer considers an unoccupied dwelling riskier than an occupied one. Depending on how long you are away from your home, you may need to make arrangements to ensure you are taking the precautionary steps outlined within your policy. During the heating season, the common things you need to consider are turning off your water and draining the pipes, keeping your heat turned up or having your dwelling checked regularly. In some circumstances, you may need to inform your insurer.
If your home will be unoccupied, we recommend you speak with your broker about the specific requirements for your insurance company and policy.
Q - What type of insurance does my business need?
It depends upon your type of business. A professional insurance broker will help you analyze and understand your business’s risks and the insurance products available to address these risks. We invite you to consult with one of our experienced professionals.
Q - Do I need specialized insurance?
Maybe. What was routinely offered for past insurance programs may not adequately address today’s exposures. For example, cyber liability did not exist a few years ago but today is considered by many a necessary coverage. Kidnap and ransom, manufacturers E&O and environmental liability are some coverages that have evolved over the past few years and may warrant your consideration. Our insurance professionals can help you determine the specialized solution right for your business.
Q - Will a higher deductible lower my premium?
Possibly. Deductibles are often imposed by insurance companies as an underwriting consideration. When you increase your deductible, you may benefit from a premium reduction… but not always. Claims can also have an impact on your deductible. If you’ve had a number of claims, a higher deductible may be a condition imposed by the insurance company in order to continue your insurance coverage. Consult with us about the options available to you.
Q - Why is my insurance premium increasing?
A variety of factors can result in a premium increase. Higher building limits or the purchase of additional equipment can often result in a premium increase. An increase in your revenues or expanding your business operations can also impact your insurance costs. Your claims experience can also have an impact on your premium. To learn more about the factors that can influence your insurance costs, contact us today.
Q - If I buy insurance, will it prevent lawsuits?
No, buying insurance does not prevent lawsuits. But insurance can help you pay defense costs, and judgments for damages or injuries to others. Good business practices reduce the probability of a lawsuit but ultimately you can be sued whether it’s frivolous or justified.
Q - How do I know what limit of Directors & Officers liability insurance to buy?
The limit of insurance purchased for Directors & Officers (D&O) coverage is dependent upon several factors. Is your company or entity not-for-profit, private or public? Publicly traded entities traditionally purchase higher limits of insurance compared to not-for-profit and private companies.
There has been a shift in limit purchases from $1,000,000 to $2,000,000 to $5,000,000. Higher limits are being purchased because D&O premiums have been decreasing or remaining flat for the last 5-10 years. The costs of defending and settling claims have been increasing steadily, as legal fees continuously increase year over year. A $1,000,000 limit may be insufficient in a lengthy legal dispute.
Q - Do I need Errors & Omissions (Professional Liability) insurance?
If your business provides consultation, sales, design or services to clients, you should consider errors and omissions insurance. E&O insurance, sometimes called professional liability or malpractice insurance, offers protection if a client claims that your product or service has caused a financial injury. It could also respond to a breach of contract if a client claims your product does not perform the way you said it would. This coverage is often purchased because of a contractual requirement. It does not replace the need for a general liability policy. Consult with one of our knowledgeable business insurance professionals about the coverage that’s right for you.
ABOUT THE ASK THE EXPERT RESPONSES:
Presented here is a general response to your query. Our response is a brief discussion of the subject and does not constitute insurance advice. Insurers offer a number of different policy forms and it is impossible to offer professional insurance advice on specific circumstances without details of all circumstances, policy wordings and related court decisions. Even with all this information, it is difficult to predict how some circumstances will be interpreted in relation to a policy wording.
Our response is not intended to be a description of coverage, and does not include details of the coverage nor the terms, conditions, qualifications, limitations and exclusions applicable. Policies should be reviewed in their entirety and related to your specific operations. As insurance advice must be tailored to the specific circumstances of each situation, nothing provided herein should be used as a substitute for the advice of a competent insurance broker. IN NO EVENT WILL RHODES & WILLIAMS LIMITED BE LIABLE FOR ANY DAMAGES WHATSOEVER, INCLUDING SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES, ARISING OUT OF OR IN CONNECTION WITH THE USE OR PERFORMANCE OF THE INFORMATION PRESENTED IN THIS FORUM.