Home-Sharing Insurance

aerial view of suburban neighbourhood

Home-sharing is an alternative to hotels that allows visitors to a city to stay in a privately-owned room, apartment, or home. This phenomenon has exploded in popularity across the globe as an affordable alternative for travellers. Plus, homeowners can make some side income from their property. Home sharing isn’t without its risks, however – it was a nightmare for one Calgary family when they agreed to rent out their home for a group attending a wedding. Once the Calgary family returned home, they discovered their house in ruins. The group staying as guests in the home had caused roughly $150,000 in damages. Unluckily for this couple, home-sharing insurance was not yet offered in Canada.

While home-sharing can be a great idea and doesn’t usually go this wrong, it’s a good idea to be prepared for what happens if it does. For example, do you know if damage caused during home-sharing would be covered by home insurance? We’ll break down the impact of home-sharing on your insurance as well as your options for protecting yourself.

Is home-sharing covered by home insurance?

Your coverage may depend on your individual policy and your insurer. Generally, since you’re generating an income through home-sharing, your home insurance will not cover you.

However, more and more insurance companies do offer a special add-on coverage (“endorsement,” in insurance lingo) that will help protect you if you participate in home-sharing. There are often a few conditions, such as:

  • You must list and rent your home through an approve home-sharing platform such as Air BnB.
  • You can only rent your home for a particular number of days each year (to qualify it as a short term rental).

The conditions may change depending on the insurance company.

Do home-sharing platforms offer coverage?

The “Host Guarantee” from Airbnb is “designed to protect hosts in the rare instance of property damage to their possessions by a guest staying in the space. The Host Guarantee is not insurance and doesn’t replace your homeowner’s or renter’s insurance.” Therefore, only direct damage induced by a guest is covered by this policy. This means no liability, no damages to cash or pets, and no theft compensation. There is also Host Protection Insurance in a situation where a guest is injured on your property during their stay which covers up to $1,000,000 in liability. Other liability cases are not covered.

Other home-sharing companies offer similar insurance coverage to Air BnB, but it’s important to read the full terms and conditions to see exactly what’s covered. Every company is different.

While you’ll hopefully never need to use this coverage, there is the potential for a lot to go wrong with home-sharing: theft, damage, harm caused to your pets, someone getting hurt, getting sued and more. These are all costs you may have to cover out of pocket. Ensuring you’re protected with the home-sharing platform coverage and personal or commercial insurance will help reduce the financial burden on you if the worst happens.

What are my home-sharing insurance options?

Aviva and Wawanesa both offer their clients coverage for home-sharing with special add-on coverage. This protection includes:

  • Damages or losses to personal belongings or the building
  • $1500 worth of a guest’s damaged or lost property
  • Any criminal acts or intentional acts by a guest
  • Fair compensation for loss of rental income

Your premiums for this additional protection depends on how frequently you plan to have guests. Generally, you are only covered if you home-share through an approved third-party home-sharing service such as Air BnB.

If you plan on participating in home-sharing more than 60 to 180 days per year or have purchased a property exclusively for home-sharing, you should look into landlord or rental property insurance. This can provide comprehensive coverage for a home that you are planning on home-sharing long-term, including property damage and liability. This may help reduce the costs of paying to rebuild or repair the home and replacing furniture and other items owned by you. It can also help cover your legal expenses should you be sued by a guest. Many policies also include fair rental value, which can provide you with some financial help if you lose rental income during a covered loss.

Your insurance broker is an excellent resource if you plan on home-sharing: talk to them about your plans and they’ll help you review your insurance options.

 

Protecting Yourself While Home-Sharing

Opening up your home to temporary guests can be daunting. While most people will be great temporary tenants, there’s always the possibility of an accident or a bad guest. Here are some tips to help you protect yourself while home-sharing:

  • Protect yourself with home-sharing insurance.
  • Follow the rules laid out by the home-sharing company.
  • Remove any valuables or things you don’t want others seeing or messing with.
  • Change any passcodes/how to enter the home regularly (especially if you don’t personally give each guest a key).
  • Have an inventory and review it after each guest.
  • Leave a guide on how to operate everything, including heating, appliances, and the shower.
  • Establish rules for your home and communicate them to guests.
  • Check your home for hazards and perform maintenance as needed.
  • Ensure smoke and fire alarms are working.
  • Install a water alarm to warn you of potential water damage.
  • Cover all electrical outlets except for one or two.
  • Don’t put candles in the home.
  • If you allow smoking in or outside of the home, provide ashtrays.

With any luck, you’ll have great guests and never need to worry about damage or someone getting injured. But accidents happen – and so do bad guests. Protect yourself and your home with the proper insurance coverage to reduce the impact on you should the worst happen. Talk to your insurance broker today to find out more.

The 5 Biggest Reasons Alberta Auto Insurance Rates Are Increasing

A variety of models of black and white cars parked end to end, filling the frame.

The 5 Biggest Reasons Alberta Auto Insurance Rates Are Increasing

J.D Power’s 2019 Canada Auto Insurance Satisfaction Study released on February 14, 2019, stated that Alberta has seen the largest jump in its average for increases in car insurance rates, coming in at $326. This was, shockingly, even higher than the national average – which has increased by $298! These rising rates can result in a considerable amount of dissatisfaction and confusion among Albertans. It leaves a number of us wondering: why are Alberta auto insurance rates increasing?

The 3 biggest reasons Alberta auto insurance rates are going up are:

  1. The inflation of the cost of accidents (due to repairs and liability).
  2. The increase in the frequency of accidents.
  3. A rise in natural disasters and weather damage.
  4. The upturn of insurance fraud taking place.
  5. Vehicle theft is surging.

Inflation in the Costs of Accidents in Alberta

The cost of having an accident in Alberta has been increasing year over year. The 2018 Collision Cost Study Update showed that the direct cost of collisions increased by an average of 25% between 2010 and 2017. This includes the costs of property damage, medical care, emergency services,  legal services, travel delay and lost time in the workplace.

The cost of repairs is increasing for several reasons:

  • A rise in the cost of materials
  • Increasing labour costs
  • The presence of more technology on vehicles such as sensors, cameras, et cetera

More and more vehicles are using electronics and upgraded materials. While this is excellent for your safety and daily driving, it becomes more expensive to replace or repair in the event of an accident. Generally, materials and labour costs are also increasing.

There’s the added complication of liability. This covers property damage and bodily injuries. While some medical care may be covered by the provincial health care system and an employer health care plan, there may be additional expenses that you can be held liable for. Your liability insurance could cover these expenses, up to your policy limit. These costs can be high, however, especially if the accident is serious.

In 2019, the Government of Alberta also introduced a limitation on the amount of payment for claims of minor injury known as the “minor injury cap,” which applies to all injuries sustained in accidents that fall under the category of minor soft tissue and minor sprain and strain injuries. With this, they finalized a set price for liability-only auto insurance and introduced a 5% accumulative rate increase limit.

Increasing Frequency of Accidents

Calgary and Edmonton have seen an increase, especially over the last two years. Distracted driving is one of the top contributors to collisions in Alberta. Between 23,000 and 27,000 distracted driving convictions have been made on Alberta’s roads each year between 2014 and 2018. With the inflating costs of accidents, this means insurance companies are paying out more money more frequently.

A Rise in Natural Disasters and Weather Damage

Bad weather causes a huge spike in accidents on the road. Storms can cause flash flooding and low visibility, which can in turn cause collisions. In the winter, it’s even worse as visibility and road conditions can become extremely poor. In April 2019, a spring snowstorm caused nearly 150 incidents on Calgary’s roads.

Natural disasters such as flooding and wildfires have also been prevalent in Alberta over the last decade. Many vehicles are left behind and are damaged or destroyed.

An Increase in Insurance Fraud

Insurance fraud is very common and costs Canadians over $2 billion a year, according to Aviva. Here are some common types of insurance fraud:

  • Lying, misrepresentation or failure to notify on an insurance application or claim.
  • Fake insurance paperwork such as pink cards.
  • Unlicensed insurance representatives “issuing” insurance policies.
  • Intentional acts to damage a vehicle.
  • Exaggeration of damage or costs such as legal or medical.

Vehicle Theft in Alberta

Alberta is leading Canada in vehicle thefts with over 23,000 cars being stolen each year. While not all drivers carry insurance to reimburse them for vehicle theft, many do and this has left insurers paying out more and more.

Alberta auto insurance rates are increasing?

 

Taking all this into account, it is no wonder that the Alberta auto insurance industry is raising rates in order to pay out for these claims as well as maintain themselves as a business. There is currently a cap on the amount Alberta auto insurers can raise their rates: 5% total overall. There is also a cap on liability insurance costs.

You may experience the following actions from insurers:

  • Eliminating discounts on insurance
  • Decreasing payment method options
  • Raising comprehensive and collision coverage prices
  • Removing their services from the province
  • Re-application required for renewals

Unfortunately, many of these factors are out of our control. We can practice safe driving, reduce our time spent behind the wheel, protect against theft, and be informed on insurance fraud… but these issues aren’t about one person. We understand it can be frustrating to see Alberta auto insurance rates increase, especially when you’ve got a clean driving record and are claims-free. Contact your insurance broker for more information on what affects your rates and how you can reduce your premiums.

Bylaws and Home Insurance: Expectations vs Reality

 

View of Calgary neighbourhood and downtown on a winter evening

Bylaws and Home Insurance: Expectations vs. Reality

Imagine a situation where you’re out to a fancy dinner in Canmore to celebrate an important milestone. Near the end of the dinner, you get a frantic call from a neighbour. Your home is on fire! Thanks to Calgary’s great fire fighting services, only your kitchen has significant fire damage. However, there is still smoke and water damage to other areas of your home.

It would be quite a shock, but luckily an adequate home insurance policy will cover most of the costs. You would be compensated for the clean-up, tear-down, and reconstruction of the damaged areas as well as for the replacement of your belongings. You’d also receive some help with additional living expenses if you needed to vacate your home during this process. However, the one thing you may not be covered for is the costs to conform to the updated bylaws of the city. This can be a huge expense depending on when your home was built and should be a concern for all homeowners, as municipal regulations are always changing. For example, if your home had been built 50 years ago, there would be a lot of updates you would be required to comply to – and these upgrades wouldn’t be covered by your home insurance.

Bylaws and home insurance aren’t often thought of together, but it’s important you consider the impact of municipal regulations on your home insurance and finances in the event a catastrophe occurs. While the expectation is that bylaws would be covered in your home insurance, the reality is that they’re often not included in standard coverage.

Bylaws and Home Insurance: How Home Replacement Cost is Affected

Bylaws are difficult because they are constantly changing. These changes are necessary to help protect lives and infrastructure, however, they can be a nightmare to deal with when you’re rebuilding a home after an insured claim. That’s because most standard home insurance policies agree to rebuild your home nearly exactly like it was. However, this is sometimes impossible as bylaws have changed to prohibit certain designs or materials.

For example, if an Edmonton home that was built 30 years ago were to be rebuilt after an insured loss, the reconstructed property would need alterations to comply with the current municipal bylaws. Say, hypothetically, it was now regulation for all homes to install a sprinkler system. These can be up to $2,500 or more. Since this was not a part of the home which was destroyed in the first place, your insurer probably won’t compensate you for this additional cost. Generally, if a property is over a decade old it no longer meets the requirements of the present public regulations.

Basically, bylaws increase your home’s replacement cost. However, these changes are not covered as it was not originally part of your home as per your insurance contract.

Bylaws and Home Insurance: The Exceptions

There are two exceptions where bylaws wouldn’t impact your insurance coverage:

  1. Your insurer pays out actual cost value or replacement cost instead of rebuilding.
  2. You have an add-on that covers bylaws.

In the first case, your insurer does not require you to rebuild your house as-is. Instead, your insured claim is paid out based on your settlement option and your policy limits. As the insurance company isn’t rebuilding the house, you’re free to construct the building you want. Of course, you’d still have to follow the bylaws, but you could alter your rebuild to be within your budget.

In the second case, you have an endorsement or add-on coverage that would cover the cost of updating to current bylaws. So, if you had an insured loss and needed to rebuild your home, the difference in costs to be compliant to municipal regulations would be covered. Otherwise, you’d be on the hook.

Some insurers are now including bylaw coverage in some of their comprehensive home insurance packages. Check with your broker to see if bylaws are covered.

 

 

In order to protect yourself, you should discuss your options for covering bylaw update expenses with your independent insurance broker. Insurers and policies differ from company to company; some companies will include this coverage, where a lot of others will request that you add it to your policy.

Commercial Vehicle Insurance for Small Businesses Explained

Smiling male sitting behind the wheel of his car. He is holding out a cardboard box with food towards the passenger window.

Commercial Vehicle Insurance for Small Businesses Explained

One of the most common questions our brokers get is “Do I need commercial vehicle insurance for my small business?” Unfortunately, there is a lot of misconceptions about what is covered by your personal car insurance. What’s worse, is if you fail to notify your insurance company and do not have the proper insurance policy in place, your claims could be denied. But have no fear, commercial vehicle insurance for small businesses will be explained in this article.

How do I know if I need commercial vehicle insurance for a small business?

If you’re only using your vehicle for commuting to and from your place of work, you don’t have to worry about getting commercial vehicle insurance for small businesses. This changes, however, if you’re doing one of the following actions:

  • Getting paid for transporting passengers
  • Driving to work sites or to regularly visit clients
  • Regularly transporting employees
  • Carrying of work-related materials
  • Making work-related deliveries
  • Having work-related tools or equipment installed on your vehicle
  • Allowing employees to drive your vehicle
  • If your vehicle is owned/leased by a corporation, partnership, or registered by a business

Keep in mind that this isn’t a complete list. You should talk to your broker about how you use your vehicle for full details on whether or not you need commercial vehicle insurance for your small business. However, if you use your personal vehicle for any of those tasks, you should purchase commercial vehicle insurance for small businesses. You must also have this specialized policy if your vehicle is registered in your company’s name. Remember, your general business insurance won’t cover vehicles.

What about my personal car insurance policy?

Generally, your personal car insurance policy will not extend to using your vehicle for commercial purposes. Additionally, you will not be covered for any job-related materials stored inside your vehicle or equipped to it. Why aren’t you covered? Generally, insuring a commercial vehicle for a small business has different levels of risk than a personal vehicle. You’re more likely to have valuable materials, you may drive more, and you may be at higher risk of being sued if you’re involved in an accident.

It’s important to remember that every insurance company is different. Yours will inform you as to what type of use is allowed. Talk to your broker for more details on what your car insurance policy covers and when it’s time to make the change to commercial vehicle insurance for small businesses.

Commercial Vehicle Insurance vs. Personal Car Insurance

Basically, the difference between the two boils down to how you use your vehicle and how much coverage is offered in the event of an accident or damages while using your vehicle for work purposes. If you use your vehicle for anything other than commuting, your personal car insurance will likely not offer any coverage. Even if it does, it may not be enough. Commercial vehicle insurance policies often have greater liability coverage as businesses often have higher liability risk. Your work-related materials and equipment may also be covered.

The Government of Alberta and the Government of Canada also have insurance requirements for certain commercial vehicles, which can include:

  • Cargo Insurance
  • Liability Insurance
  • Passenger Insurance

Even if you only have one vehicle for your small business, you still need to abide by the rules and protect the financial security of your small business.

What does commercial vehicle insurance cover for small businesses?

Commercial vehicle insurance varies depending on your insurer and your industry. There are many customized insurance policies that fit the needs of your small business. The three main areas of coverage include:

  • Liability – Covers third party injury and property damage.
  • Collision – Covers the repair or replacement of your vehicle if you’re involved in an accident.
  • Comprehensive – Covers the repair or replacement of your vehicle if you suffer a certain type of damage, such as storm, fire, or vandalism.

 

 

As always, check in with your independent insurance broker. They can help you evaluate your insurance needs and answer your questions.

7 Uncontrollable Factors Affecting Home Insurance Rates

View of a Calgary or Edmonton cal-de-sac with large, nice, new-build homes, each with a 2-car garage. The garbage and recycling containers are on the curb

7 Uncontrollable Factors Affecting Home Insurance Rates

Factors affecting home insurance rates include those that determine the likelihood of damage to your home and the cost to repair or replace your home. Some of these factors are manageable by you but others are entirely out of your control. Unfortunately, many people don’t know what factors affect home insurance premiums and this results in a lot of frustration when there is an increase in their insurance bill. This is especially true if they’ve been claim-free for years. So what affects your home insurance rates? First, we’ll look at what individual factors are affecting your home insurance rates and then we’ll review the ones you have no control over.

Personal Factors Affecting Home Insurance Rates

  • How much your home and your belongings cost
  • What your deductible is
  • What your coverage options are
  • Your insurance history and claims history
  • Any remodels or upgrades done to your home
  • High-risk features, like pools, wood stoves, and trampolines

These factors can affect your home insurance rates positively or negatively. For example, if your home is older, it may cost more to insure as the wiring or plumbing may be more likely to fail and cause damage. On the other hand, an upgrade could increase the cost of replacement for your home. It’s a complicated formula, that’s for sure.

Uncontrollable Factors Affecting Home Insurance Rates

While you can control some factors affecting your home insurance rates, others are out of your hands (unless you move).

1. Frequency of Natural Disasters

Alberta has experienced a string of natural disasters over the last few years and these are likely reflected in your latest home insurance renewal. Between the 2016 Fort McMurray fires and the 2013 floods across the southern areas of the province, Alberta experienced a blow of $14 billion dollars in damages. The frequency of these natural disasters impacts your insurance rates, as the more at risk your location is for such events, the more expensive insurance will be. With the number and severity of these natural disasters increasing, it is likely that insurance costs will continue to rise.

2. Insurance Fraud

Insurance fraud occurs when a home insurance policy owner deliberately makes a claim that is exaggerated or misleading. A few situations that would count as fraud include:

  • Deliberately damaging property to make a claim
  • Exaggerating the cost of items stolen in a burglary
  • Constructing fake receipts or repair bills
  • Lying about commercial or rental usage for a property
  • Overstating the severity of the damage
  • Failing to disclose the true circumstances of the damage

An increase in the frequency of fraud has put a considerable amount of pressure on insurance companies and prompted an increase in rates.

 

3. Labour and Building Material Costs

The cost to repair your home is tied in with labour and material costs. Unfortunately, these follow the cycle of supply and demand which means they can fluctuate. If your area has been hit with a natural disaster, your insurance company could be paying much higher costs than if your home was the only one damaged by a fire.

4. The Frequency and Severity of Claims in Your Area

We know that when you make a lot of claims, your insurance premiums may be higher as a result. On the other hand, should you be claims free or have very few claims you will likely have a lower rate. But this also applies to people living in your area. If there are a lot of claims for weather-related damage or theft, your insurer will probably interpret this as meaning your area is higher risk and will potentially increase your premiums.

5. Your Home’s Proximity to Risks

Where your home is located is a key factor affecting home insurance rates. Proximity to risks such as rivers and cliffs will may your home more expensive to insure.

6. How Old Your Home Is

Your home’s age determines many of its risk factors. An older home often has wear and tear, which can increase its chance of damage. It also often has outdated plumbing or electrical systems. Upgrades can help reduce insurance costs and make your home more efficient and safer to live in. Talk to your broker about your options if you have an older home.

7. You Home’s Distance from Fire Services

The farther your home is from a fire station or fire hydrant, the higher your insurance premiums will be. That’s because when it comes to fire, time is of the essence. If a fire station is nearby, crews can get to your home quickly. If there’s a fire hydrant, they’ll have the resources to fight the flames. If they take a while to get to you or don’t have access to water, their ability to save your home is impaired.

 

If you have any questions about factors affecting home insurance rates, your insurance broker can help. They can also help you save money on your home insurance premiums and get the best coverage for your needs at a competitive price.

Do I need rental car insurance for summer vacation?

Two boys are smiling as they lean out of the rental car's windows as they enjoy the evening sun on their summer vacation.

Do I need rental car insurance for summer vacation?

Renting a car during your summer vacation can make your trip one to remember: you can go at your own pace, explore off the beaten track, and sometimes, it’s the only way to get where you want to go! But navigating a foreign country can be stressful and that triples if you get into an accident. If you’re wondering about how to protect yourself and if you need rental car insurance for summer vacation, you’re in the right place. We’ll review everything you need to know.

Before You Rent a Car for Summer Vacation

Booking a rental car for summer vacation should be done in advance, particularly if you’re travelling to a popular destination or have strict requirements for the type of car you want to rent. Here are some things to consider about your rental car:

  • Type of driving you’re planning on doing
  • Size of the car (consider your height as well as how easy it will be to park)
  • How many people it can transport
  • How much luggage room you require
  • Automatic or manual transmission
  • Fuel type and availability
  • Features such as backup camera, roof rack, fold-down seats, et cetera
  • Parking benefits
  • Roadside support
  • Location of pick up and drop off
  • Dates available
  • Price
  • Damage, cleanliness, and fuel policies
  • Insurance coverage available
  • Company ratings and reviews

There are a few decisions that need to be made initially. First, you’ll need to decide on the car. How many people are you travelling with? How big of a car do you need? What type of car do you want? Do you have a lot of luggage or other items with you? Do you need an automatic transmission? Do you want a car with certain features like a backup camera, roof rack, or fold-down seats?

Once you’ve decided on the general car size and type you want, it’s time to look up companies. Make sure the company allows for its vehicles to go where you want to take it. You’ll also want to double check the hours of operation, rental roadside support, and read reviews of the company. Check out what they offer for insurance and what the fine print is, as well.

Once you’ve found a rental car company and vehicle that works, it’s time to look at the insurance aspect.

Rental Car Insurance for Summer Vacation

Even though it might seem like a hassle, ensuring that you are properly covered is essential. What happens if your rental car is involved in an accident? What if it’s a victim of a break-in or theft? If you do not have coverage, you will likely have to pay out of your own pocket. Charges from the rental company could be astronomical, not to mention if you’re held liable for someone else’s injuries or property damage.

Rental Car Company Insurance

Rental companies will probably urge that you purchase their insurance in the case of an accident. While insurance is important, you may not want to jump for this type of coverage right away. You should always read over any policy to see what exactly will be covered and what the costs are. Sometimes these policies are not very good and don’t protect you as the renter. They may have a very high deductible or extra fees.

If you do opt to purchase this insurance, be sure you keep a copy with you at all times. You should also ask what the process is and have them show you exactly what is covered and what the fees are.

Credit Card Rental Car Insurance

Certain credit card companies will also provide insurance for rental cars. Their coverage varies. Often, what they supply is known as collision damage waivers. This helps cover charges for repairs and replacement of the vehicle if you’re involved in an accident. Many will also cover theft, but may not add liability coverage in the event of an accident. In certain situations, this coverage can be better than what the rental car company is offering. But this all depends on the individual credit card and rental car insurance.

Be sure to understand your policy. You can call your credit card company, check their website, or take their wordings to your insurance broker if you need help. It’s never a bad idea to book your rental car with a credit card anyways, as you usually don’t pay extra for this insurance coverage and there can be other benefits as well.

Your Personal Insurance

Rental cars are not covered by your personal auto insurance unless you have a special endorsement (add-on coverage). Adding this coverage may be your best option, especially if you’re worried about your liability and damages being adequately protected. It is also useful if you travel frequently or plan to rent a vehicle for a longer time period.

It’s important to note that your coverage will vary by your insurer. Some insurance companies only offer coverage for certain countries or if you have an international driver’s permit.

Talk to your broker about your options when it comes to using your personal insurance for rental car insurance for summer vacation.

Final Things to Remember About Rental Car Insurance

Always document the car when you pick it up and once you drop it off, preferably with photos or videos. Note any scuffs, chips, or any type of damage.

You also don’t have to use any of the above rental car insurance options in isolation – you could use all three, and this isn’t a bad idea.

Make sure to choose your insurance wisely so that your summer vacation doesn’t get ruined by worry. Enjoy the drive with peace of mind. Talk to your broker if you have any questions – they’re happy to help!

 

8 Scenarios Not Covered by Home Insurance

 

Woman looking forlornly at her kitchen wall which is covered in mould.

8 Scenarios Not Covered By Home Insurance

Home insurance is for anyone who is interested in financial security, peace of mind, and safeguarding their home and belongings. It’s also required by many mortgage lenders. Home insurance covers many different scenarios and causes of damage but the extent of your coverage depends on your insurance company and your coverage options. As a homeowner, you should be aware of what is and what isn’t covered by your home insurance. Even the most comprehensive coverage may require separate endorsements (add-ons) to protect you from certain perils like earthquakes and water damage. Common scenarios not covered by basic home insurance include:

  1. Flooding
  2. Wear and tear
  3. Mould
  4. Actions from public authorities
  5. Vermin infestations
  6. Nuclear accidents
  7. Earthquake, sinkholes, or mudflows
  8. Dangerous dogs

While some of these perils can be protected against with an endorsement (add-on coverage) some of these scenarios are not covered by most home insurance companies. Why aren’t these covered? They’re usually prevented by good home maintenance or they are considered too risky for the insurance companies. We’ll review each of these items in detail to help you understand your home insurance a little better.

1. Flooding

Water damage is not generally covered under your typical basic home insurance policy, although some insurers are offering this as part of a comprehensive home insurance package. Most insurance companies offer flood insurance as an endorsement or add-on coverage. This optional supplementary insurance extends your protection to include overland water and sewer back up damage. This includes water damaged caused by bodies of water overflowing, rainfall, snowmelt, and backup of liquid from your drains into your home. Sewer backup coverage can often be purchased separately without the overland water portion, too.

It’s important to note that “flooding” damages caused by something like a burst pipe or malfunctioning washing machine may be covered by your normal home insurance policy. Other sources of water damage, such as a tsunami or seepage from groundwater, may not be covered at all. Exactly what’s covered will vary by the insurance company, so be sure to talk to your broker to understand your home insurance coverage.

2. Wear and Tear

Any damages caused to your home which can be written off as wear and tear will not be covered by your home insurance policy. This is because your coverage is intended to safeguard your house from sudden catastrophic losses such as fires and major storm damage. You, as the homeowner, are held responsible for performing rudimentary upkeep to protect your home.

3. Mould

Like with wear and tear, you as the homeowner are held accountable for the general maintenance of your home. Mould typically results from negligence following water damage or a home that wasn’t properly repaired afterwards. As mould is preventable and slow-moving, you are expected to notice and repair it. Proper restoration after water damage is critical!

4. Action from Public Authority

In a situation where armed municipal, provincial or national officers or the army needed to breach your home, your insurance policy will not compensate you for any damages incurred. This is because any perils caused by a public authority is not generally included in your coverage. You may also not be reimbursed if any authorities had to seize your personal belongings, take over your land or commandeer your home.

5. Vermin Infestation

Whether it is bedbugs, termites, mice or any other sort of vermin, you will most likely not be reimbursed for the damages caused by the infestation of these creatures. Technically, infestations are made worse by a buildup over time, and most insurance companies consider the removal of vermin and upkeep of your home a part of general maintenance.

6. Nuclear Accident

Should you live near a nuclear power plant, your home insurance is fairly likely not to extend to any damages induced by a nuclear accident. Unfortunately, most insurers do not offer add-on coverage that will extend your protection to this kind of incident. Nuclear power plant companies are often obligated to supply liability insurance in order to compensate for damages as long as you live within the area of risk.

7. Earthquake, Sinkhole or Mudflow

Any damages induced by the shifting of the earth underneath your home are not usually covered by your home insurance policy. This includes earthquakes, sinkholes and mudflows. However, there are additional coverage options that will cover this kind of damage. This only refers to damages directly caused by the earthquake itself, and earthquake insurance often has a higher deductible than regular insurance. Nevertheless, it is recommended that homeowners who live in earthquake-prone areas have this coverage in case of an incident.

8. Dangerous Dogs

Dog bites comprise over one-third of home insurance liability claims, so it may not be a surprise to learn that not every dog breed is covered by your typical home insurance policy. Breeds which are known for having aggressive tendencies or have been otherwise branded as dangerous may be left out of a policy. Some insurance companies might request additional information about your pet to assess whether or not there is a history of aggression or a higher risk of a dog attack. Your broker will be able to determine whether or not your dog’s breed affects your insurance – this isn’t the case for all insurers!

Understanding your policy will help set you up for financial security and peace of mind when it comes to protecting your home. Knowing what your policy does and doesn’t cover is critical. Your broker is an excellent resource for all of your questions and to help you interpret all of the insurance lingo. Contact us today with your questions!

4 Tips For Using Commercial General Liability Insurance to Protect Your Business

An insurance broker and two employees reviewing their commercial general liability insurance policy.

4 Tips for Using Commercial General Liability Insurance to Protect Your Business

Commercial general liability insurance helps protect your business, no matter what industry you’re in. Also known as a CGL policy, this coverage is the starting point and essential for any company. Here are 4 tips to help you make the most out of your commercial liability insurance to protect your business:

  1. Take advantage of risk management resources.
  2. Understand what is and what isn’t covered.
  3. Use your broker as a resource.
  4. Consider your CGL policy as a last line of defence.

We’ll discuss these each in a little more detail below.

 

1. Take Advantage of Risk Management Resources

As part of your commercial general liability insurance, you should have access to a variety of risk management resources. These are provided by insurance companies or associated third parties to help you minimize your chance of injury or property damage occurring on your business premises or wherever you operate. This can include everything from a phone line staffed with experts to training webinars to brochures and pamphlets. These resources are a great way to protect your business and learn how to handle potential lawsuits. For example, check out the Insurance Bureau of Canada’s risk management resources.

2. Understand What Is and What Isn’t Covered with Your Commercial General Liability Insurance

Commercial general liability insurance is basic coverage for all businesses, regardless of the industry you operate in. It protects you if you’re held liable for bodily injury or property damage to third parties. It will help reimburse you for your legal expenses, including any settlements and awards, up to your policy limit. You’ll also be required to pay a deductible. For example, let’s say someone walks into your store or office in the winter and slips in the front entrance. They fall and break their arm. They hold your company liable for damages. This type of scenario would likely be covered by your CGL policy.

But not everything is covered. For example, if you’re sued for causing financial loss as a result of your advice or professional service, you wouldn’t be covered by this type of policy. You’d need a professional liability insurance policy (also known as errors & omissions insurance) in order to protect yourself in that scenario.

That’s why it’s critical that you understand your policy, including what is and what isn’t covered. You should also understand how your insurance works and what you need to do in the event of a claim (or if you’re aware you might need to make a claim).

3. Use Your Broker as a Resource

Your broker is there to help you. Not only do they do the price shopping and research to find you competitive quotes that match your company’s insurance needs, but they’re also there to answer your questions and advocate you through the claims process. They’re there to ensure you’ve got the insurance you need and to help you will all things related to insurance. They can provide additional risk management resources and help you understand your coverage.

4. Consider your CGL policy as a last line of defence.

Insurance should always be your last line of defence. While you may be covered, you’ll still need to pay a deductible and your policy has limits. You may also see a rise in your premiums after a claim (although this is not always true). Plus, lawsuits aren’t many people’s idea of fun.

Your insurance should be just one part of a risk management plan to protect your business’ financial security. If you can prevent lawsuits in the first place, you will likely save money in the long run and save you from many headaches that come with legal action.

Do I need commercial general liability insurance?

In short, yes. This is essential, basic coverage to protect your business if someone is injured or has their property damaged while on your company’s premises. Lawsuits can be extremely costly, and this insurance provides you with a measure of financial security and peace of mind. It’s also important to note that some contracts require insurance coverage.

Talk to one of our brokers for more information or to get a quote today. They can help you determine your small business’ insurance needs and which commercial general liability coverage suits you best.