There are so many questions that people ask about insurance, but here are some Frequently Asked Questions that we hear more often than you might think!
What is the minimum required auto coverage?
Personal automobile insurance starts with third-party liability, and coverages can be added from there based on the vehicle’s state and the insured’s past driving history.
What coverage should I consider adding to my car insurance policy?
It’s best to talk to your Access Insurance broker about this, but below are examples of policies that many people buy:
Comprehensive insurance (to cover fire, theft, vandalism, and other perils)
Increased liability limit
Rental vehicle coverage (extends your car insurance policy to any vehicle you rent in Canada and the U.S.)
How does an accident affect my car insurance policy?
Your insurance policy will be reviewed in the event of a loss. If you’re not responsible for the accident, you most likely won’t get a rate hike. If the loss was your fault, however, your policy will be re-rated to reflect the accident. .
If I buy a new car, is it automatically covered under my existing policy?
Your automobile policy provides automatic coverage for a newly acquired automobile, as long as your insurer is notified within 14 days of you taking delivery of the new car. However, for this to apply, you must have all of your vehicles insured with the same company.
NOTE: If one vehicle has less coverage than another, then the coverage for the new vehicle will be the same as the lowest coverage on any existing vehicles.
The best solution is to call Access and get coverage for your new vehicle BEFORE you pick it up. The automatic coverage should only be used if you can’t reach one of us at Access.
Is a home-based business covered under my homeowners insurance policy?
No. Residential insurance policies are not designed to cover commercial operations in your home. Only nominal coverage is provided for business contents, tools, and any equipment you need to run your business. Contact your Access Insurance broker to find out what policy add-ons you will need to ensure you have proper coverage for your home business.
What other coverage should I think about getting on my homeowners policy?
Increased personal liability limit
If you own antiques or collectibles, special coverage for those require an appraisal, but antiques and collectibles coverage will compensate you in the event of theft of these valuable items
Bylaws coverage is a good add-on in the event that you purchase an older home, this coverage will cover costs to ensure your home complies with bylaws
Sewer back-up coverage—gross, but handy to get
I live in a high-rise apartment, with very little contents. Do I really need tenant insurance?
Yes, if for no other reason than the damage you could do to your own apartment. For example, a grease fire in the kitchen or an overflow of water from your bathroom sink. Tenant insurance works the same way as homeowners insurance in that it not only protects your belongings, but provides protection against damage you might unwittingly cause to other tenants.
If a friend breaks something in my house, can I claim it under my homeowners policy?
No. If you didn’t break it, you shouldn’t claim for it. You’ve got to get your friend to pay up. If you do claim it under your homeowners insurance, chances are the insurance company will go after your friend to recover its loss to settle the claim. This is subrogation—it’s as if you sued your friend to get the money for the broken item. Chances are, after this, you probably won’t be friends anymore.
I bought an “all risks” home insurance policy. Does that mean I’m covered for everything?
No! Even the most extensive, detailed policy will have at least 30 exclusions. So “all risk” is just another term for additional coverage. No umbrella keeps you completely dry, and no umbrella policy is going to capture every peril associated with home ownership.
While all insurance policies are different, some of the uncovered perils covered in them are:
- Damage caused by wear and tear, corrosion, or gradual deterioration
- Damage caused by insects and rodents
- Flood damage
- Earthquakes, landslides, or mudflows (you can get insurance for this, but it is expensive
- Damage caused by water seepage
- Loss of personal property if the premises has been vacant for over 30 days
We’re planning a road trip through the U.S. and Mexico. Do we need special insurance to drive in those countries?
Your Canadian car insurance covers you for driving anywhere in the United States (including Alaska and Hawaii), but not in Mexico. If you’re planning on driving through Mexico, come into Access and talk to a broker about receiving coverage from a licensed Mexican insurance company.
I’ve been shopping around for disability insurance. What is the difference between “own occupation,” “regular occupation,” and “any occupation” rates?
“Own occupation” policies cover you in the event that you can no longer do the specific job you did before your illness or injury. They are mostly sold as individual policies, and can be quite expensive, since they will pay out your current wage. Professionals like doctors or lawyers tend to buy these. “Regular occupation” policies cover you if you can’t do a job within your profession. “Any occupation” policies will cover you if you can’t do any job at all.
This means that if you are, for example, an accountant, “own occupation” insurance would kick in if you are unable to review financial material. “Regular occupation” would kick in if you can’t lecture on accounting. “Any occupation” would kick in if you are unable to work at all.
The “platinum” plan is the one where you can collect disability benefits, and be making an income in another occupation doing something else. So, if the accountant mentioned above were to become blind, and be unable to do the work expected of an accountant, he could still go on the lecture circuit and collect speaker’s fees while still collecting disability benefits.
My mother is coming to visit from Ontario. Does she need to buy out-of-province medical coverage?
There is an agreement among the provinces and territories ensuring that health needs are met wherever you are in Canada. As long as your mother carries her health card with her, she will be able to receive medical attention.
This being said, her health card won’t cover travelling expenses. For example, if your mother were to have a heart attack while visiting you, she would receive any medically necessary treatment, but the ambulance and her return flight ticket change would not be covered.
Are life insurance payouts tax-free?
Life insurance death benefits are tax-free and creditor-proof, as long as the named beneficiary is not your estate. Your estate is responsible for paying all your debts after you die. If you name it as your beneficiary, then all your creditors, including Revenue Canada, will receive funds before anyone else does (i.e., your family). If you choose your partner to be the beneficiary, that person is entitled to the benefits. While your dependants may choose to clear your debts after you die, they are not entitled to that choice if you name your estate as the beneficiary. Also, if you name a business partner as a beneficiary, the benefits are not creditor-proof.
Does everyone need to buy life insurance at some point?
Not necessarily, however, there are numerous reasons why people buy life insurance. First and foremost, people buy life insurance to protect their family or those dependants whom they support.
Secondly, you will likely buy life insurance when you buy a home and take out a mortgage. Your bank will want to protect its investment, and the easiest way is through life insurance as it will pay off the mortgage balance in the event of your death.
Third, if you run a business with a partner, you may consider having a life insurance policy that names your partner as the beneficiary, allowing that person to buy out your half of the business.
Finally, there are tax advantages to having life insurance. For example, the person you name as a beneficiary won’t have to pay estate taxes if you die.
These FAQs are just examples, and are not intended to be legal advice. Be sure to come into Access, and let us answer your specific questions about insurance.
Also, feel free to call us at 780-435-2400 to speak with one of our insurance experts.