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How
to buy a Policy
Automobile
Policy
Residential Policy
How to buy auto insurance
Automobile insurance is often considered a complex and difficult product
to understand and consequently to buy. This reputation exists because insurance
programs vary from province to province across Canada.
It’s actually quite simple, once you understand the options available to
you in your home province.
Most provinces allow private insurance companies to underwrite auto insurance
policies. Others, such as British Columbia, Saskatchewan, Manitoba, provide
auto insurance through government-run insurers. In Quebec, auto insurance
is a 50-50 proposition. Private insurers provide insurance against physical
damage to a vehicle and a government program covers the liability portion
of the insurance.
No matter what the situation is where you live, there are some key things
to remember when shopping for an insurance policy.
First of all, policies within a given province use the same policy language.
While a home insurance policy from one insurer can be worded very differently
than a policy from another insurer, auto insurance policy wordings are identical.
In provinces, where private insurers compete for automobile insurance business,
companies differentiate themselves on their level of service and rates.
Auto insurance policies also differ on policy limits and deductibles. A
limit is the maximum amount that can be paid in the event of a claim. A
deductible is the cost of a claim that the policyholder pays. That amount
is subtracted from the total amount of the claim payout.
Anatomy of coverage
Automobile policies consist of three parts: physical damage to the vehicle,
accident benefits/medical, and liability.
Physical damage: Physical damage coverage can be broken down into two parts
-- collision and comprehensive. Collision coverage pays for the repair of
a policyholder’s vehicle if the vehicle is damaged in a collision where
the policyholder is at fault. Comprehensive coverage is part of the policy
that covers damage other than collision, such as vandalism, theft or fire.
Accident benefits/medical: This insurance covers occupants of a vehicle
in the event of injury. It varies widely from province to province. Some
areas it touches on include income replacement, medical payments, funeral
expenses and rehabilitation. It is a complex portion of an auto insurance
policy and should be reviewed with a broker.
Liability: Liability coverage pays for a legal claim against the policyholder
in the event that he or she is in some way responsible for an accident that
causes harm or damage to a third party.
It’s worth mentioning endorsements. These are extras that beef up coverages
in an automobile policy. They include:
-Loss of use. This pays for the cost of a rental car while your vehicle
is being repaired after an accident.
-Waiver depreciation. This reimburses a new vehicle owner for the replacement
cost and not the book value of a vehicle if it’s written off in the first
24 months of the car’s life.
-Road Assist. This is a CGU endorsement that provides roadside assistance
to a vehicle owner in the event of a breakdown.
A broker can explain all the endorsements available to you.
Setting a premium
When buying an automobile policy, a vehicle owner needs to provide several
pieces of information: A driver’s licence, your claims history , a vehicle
identification number (VIN), and the insured’s address.
To determine your premium, a broker will also need several other pieces
of information:
-Is it used for business or pleasure or both?
-Is your commute short or long? What’s your annual mileage?
-Your vehicle model and age.
Minimum insurance limits and coverage is set by each province, though the
minimums are rarely enough. Higher limits are relatively inexpensive.
There is one other consideration. Physical damage coverage is optional and
dropping it will lower the cost of the policy.
An insurance broker can provide advice as to the ramifications of each change
and help you decide what insurance coverage is right for you.
A key way to keep a premium affordable is to maintain a safe driving record.
That includes remaining accident-free and avoiding traffic violations.
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How to buy home
insurance
Home insurance can be a complex product to buy. That’s why a little bit
of knowledge can go a long way in making purchase decisions simpler.
What follows are a series of tips to help you better understand home insurance
and to make your insurance buying experience easier.
Your independent insurance broker can provide answers to further questions
should you need additional information.
Anatomy of Home Insurance
There are three types of personal property policies: homeowners, condominium
dwellers and tenants.
Homeowners insurance is designed for people who own the property that
they live in. It includes coverage of the main building, outbuildings
such as sheds and garages, contents and liability.
Condominium insurance includes contents coverage and has special considerations
relating to the building, which is owned collectively by the people who
live in it.
Tenants insurance covers people who rent their homes. A tenants package
policy covers a renter’s personal property and protects them in the event
that they accidentally damage the premises they rent.
There are essentially three kinds of home insurance policies.
Standard policy: This policy is a named-perils policy. It specifies
the particular perils for which the building structure and its contents
are covered. If a peril is not mentioned, then it’s not covered. A peril
is an event that may cause a loss. (CGU does not offer this kind of policy.)
Comprehensive policy: This policy covers all risks on the building
structure and its contents, except for those risks specified in the policy’s
exclusions.
Broad policy: This policy specifies all risks to the building
structure, but specifies named perils coverage for the building’s contents.
The third piece of the home insurance puzzle is liability coverage. It
is typically included with all home insurance policies. In the event that
someone is injured on your property as a result of your negligence, liability
coverage pays for the damages invoked by a lawsuit. So if someone slips
on the icy steps of your home and gets injured and they sue you, your
liability coverage pays the financial damages awarded by a court against
you.
A comprehensive policy offers a homeowner the most coverage on a home,
but it is also the most expensive policy. Standard policies are the cheapest,
with a broad policy landing somewhere in the middle.
Home Insurance Premiums
The cost of a homeowner’s insurance policy can vary depending on a variety
of conditions.
The location and age of the building is a factor. Its proximity to firefighting
resources, such as a firehall, can affect the premium. The geographic
area where a building is located is also a consideration.
Four key elements in a home older than 20 years are considered in homeowners
insurance premium pricing.
-The roof must be replaced every 20 years.
-The wiring must be in good working order.
-Plumbing must be copper and not galvanized steel.
-The furnace must be in good working order.
On the topic of heating, the installation of a wood stove may cause a
premium to cost more. Other surcharges may apply if more than one family
lives in a home or if a homeowner has a poor claims history.
There may also be several discounts available to you. For example, you
may qualify for a discount if a Neighbourhood Watch program is in place
in your community or if you have been claims-free for the past three years.
Equipment installed in a home that reduces risk is also a factor for determining
a premium. For example, the installation of a security system is considered
in premium pricing.
Policy details
Every home insurance policy comes with a deductible and a set of limits.
A deductible is an amount a policyholder pays towards a claim. That amount
is subtracted from the total cost of a claim. For example, if a policy’s
deductible is $500 and the value of a claim is $5000, then the insurer
would pay out $4500 to the policyholder when the claim is settled.
Limits are maximum amounts set out in an insurance policy that an insurer
promises to pay a policyholder in the event of a claim. Limits are set
by the insurance company.
The size of a deductible affects the cost of insurance. The higher the
deductible, the more affordable a premium can be, but the trade off is
that you will absorb a greater share of the loss.
All home insurance can be customized beyond standard policies with specific
items insurance. These are extra coverages, sometimes known as floaters,
that can be added to a policy to cover items which are either excluded
or limited by the main policy.
Their purpose is to give broader coverage to specific items, such as jewellery
or other high value items. The addition of a floater can also remove a
deductible and help to pre-establish an item’s value. Floaters are often
used to give all risk coverage to items on a named-perils policy.
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Useful documents for our clients:
Request
password
-Why
are insurance premiums increasing?
-522 Kg
-Mechanical
Inspection Guide
-3.5 Mg
-Joint Accident
Report
-340 Kb
-Q.E.F. no
1 Automobile Policy Wording
-192 Kb
-Personal
Inventory Sheet
-68 Kb
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