Editor’s note: This article was originally published on November 26, 2013 and was updated on August 10, 2015.
Understanding your insurance policies is extremely important. It can help you make better decisions about your policies and also come up with the right questions to ask your insurance broker. Being educated on insurance is the first step to making smarter decisions and ensuring you understand what you are and are not covered for.
You can contact us at any time if we’re your brokers and we’ll be happy to talk to you about your policy.
The Insurance Bureau of Canada (IBC) recommends knowing what you’re covered for, and to ask about optional coverage that you may not have on your policy. A good example of this is knowing how much your contents insurance covers and in what categories. For instance, do you have expensive jewelry, lots of photography equipment, or even pricey cookware? You may not be covered for the entire replacement value under your contents insurance. Most insurance do not offer a blanket amount for coverage, but will cover up to a certain amount in a category of goods, such as electronics and collectibles.
Most importantly, you should know what you aren’t covered for, and take steps to ensure that you’re protected against these risks. Insurance against natural disaster floods simply doesn’t exist, and many policies have limits on the kind of water damage they’ll cover, so a precaution you could take for this is to make sure valuable items aren’t stored on your basement floor, but in closets, bedrooms, or up on shelves a couple of feet off the floor.
Most importantly, you should know what you aren’t covered for, and take steps to ensure that you’re protected against these risks.
The most sensible question the IBC recommends to ask your broker is “If I get in a collision tomorrow, what am I covered for?” If your expectation is that you’re covered for everything, including a rental car, make sure there are clauses in the policy that covers your expectations. You should also make sure your deductibles are a reasonable amount, as most insurers won’t recommend filing a claim for under a certain amount anyway. However a decreased deductible could mean an increased policy payment, best to talk with your insurance broker to find out what is best for you!
The most sensible question the IBC recommends to ask your broker is “If I get in a collision tomorrow, what am I covered for?”
If you own and operate a small business, don’t leave your insurance to chance. Find an insurance broker that takes the time to get to know your business and recommends the right coverage for you, rather than trying to sell you a bargain basement plan. The good news is we have those people in-house at First Foundation, so you should really talk to us if you need business insurance or are dissatisfied with your current business insurance.
Bottom line, our expectations of our insurance policies are usually that they will cover everything. The reality is that they only cover up to a certain amount, for certain risks, and they may not cover everything you think. Make sure that you have the policy that matches your expectations, and you’ll be insurance literate.