General
1. What is the difference between an insurance broker and an insurance agent?
Insurance agents are representatives for just one insurer and are employed directly by that insurer. Agents can only offer you insurance products sold by their employer. Insurance brokers are an independent professionals who have contracts to represent several different insurance companies. Brokers can choose from many different insurers offering many different products to find the best match for your needs. Because brokers deal with various insurance companies, they are able to match an insurer to their clients needs. Because brokers are not limited to one insurer, they can search the market and place coverage for unusual or hard-to-insure risks. 2. I often heard people talking about endorsements changing my insurance coverages,
what's an "endorsement?"
It is an "extra" that is added to your policy to provide or delete coverages. It allows you & your broker to tailor your policy to your specific needs. It adds coverages or deletes coverages that are standard to the insurance policy you have purchased. For Example with the purchase of an SEF 43R you'd receive the purchase price of your car if it were written off in an accident within 24 months of buying it new. 3. Do I have to pay a deductible?
Insurance in most cases are subject to a deductible, in which you pay a specific amount toward the cost of repairs. Deductibles vary from insurer to insurer and by the type of policy. Your individual preferences may even affect the deductible you have on your insurance policies. For example some people prefer a larger deductible because it lowers the premium. However, deductibles may be waived in certain situations. As you can imagine these situations vary and it is best if you discuss it with your broker. 4. Why do I still have to pay 15% Tax on My Insurance Policies Shouldn't it be 13%?
Unfortunately you do have to pay 15% tax. Its a common mistake to think that the tax charged on Insurance is HST. It is not. The Provinical Government actually charges a special tax called IST (Insurance Sales Tax). This tax has remained at 15%. Brokers and business leaders have been calling for an end to this tax, but have unfortunately not be successful to date. The Tax you see charged on your policy goes directly to the government. We urge you to contact you local MHA or Government Services and Lands to Complain. back to top
Auto
1. What insurance do I have to carry on my car?
This varies from province to province, in our case we will discuss Newfoundland. As a minimum, Newfoundlanders are required by law to have their vehicles insured against an accident that might injure or kill someone, or damage their property. This coverage is called "Third Party Liability" or Public Liability. In Newfoundland the minimum available Third Party Liability limit (available under law) is $200, 000. Increased limits are available. As a special note, in today's escalating climate of litigation Crosbie Job recommends that as a minimum you purchase $500,000. As a rule of thumb we will not even quote $200,000 because we want to ensure that our clients are well covered. Your third party liability coverage can be increased up to a maximum of $2,000,000 to cover you against any court awarded damages. You can purchase $500,000, $1,000,000 or $2,000,000 depending on your individual policy conditions. The Newfoundland Government also requires that you purchase uninsured motorist coverage. If you have leased or finance the purchase of your vehicle the financing or leasing company can require you to purchase additional coverages 2. How do accident/medical benefits work?
These are no-fault benefits for injuries sustained in an auto accident. Coverage is available for medical payments, loss of income, disability and death benefits up to the provincial limits. 3. What other auto insurance should I consider?
The cost of auto repairs continues to rise. As a result, it may be wise to have insurance to cover damages to your own vehicle. This coverage is called "physical damage." Physical Damage coverages are available in various forms, you may purchase All Perils, Collision, Comprehensive, and/or Specified Perils. The most suitable coverage choice varies from person to person, so it is best to discuss this with you broker or agent. 4. What's the difference between "collision" and "comprehensive?"
Collision insurance covers damage to your car as a result of an impact with another object in or on the surface of the road. Comprehensive coverage insures against damage to your vehicle from causes such as vandalism, theft, or a flowerpot landing on your hood from a 9th floor balcony. All Perils incorporates both coverages into one section. 5. Can I get collision coverage for a rental vehicle as part of my own car insurance?
Yes. Just ask your broker or insurer for an "endorsement" (Please see SEF 27) to your policy, so that you may be covered for damage to non-owned autos, for the period of time that you need that back to top
Auto - Endorsements
1. Could you please explain the LOSS OF USE Endorsement - S.E.F. 20:?
The SEF. 20 covers the cost of renting a vehicle should your own vehicle become garaged due to a collision, all perils, comprehensive or specified perils claim can be covered for drivers over 25. Full coverage must be carried in order to purchase this endorsement. 2. What is the LIMITED WAIVER OF DEPRECIATION - S.E.F.43R?
This endorsement limits the depreciation of your vehicle should it be deemed a total loss due to an insured loss. Only private passenger vehicles purchased new within the past 12 months qualify and the coverage is only effective for the first 24 months from the date of purchase. A copy of the bill of sale must accompany the request for coverage. Leased or rented vehicles do not qualify. 3. What is an SEF 27 - LEGAL LIABILITY FOR DAMAGE TO NON- OWNED VEHICLES?
An SEF 27 allows you to extend your collision and comprehensive or specified perils coverage to cover a rental vehicle. This vehicle must be of the private passenger type and only the insured and spouse would be covered. The amount of coverage depends on your individual policy. 4. Why would I want to purchase FAMILY PROTECTION - S.E.F. 44?
Many people purchase this endorsement for the following reason:if you are involved in an accident where the third party does not have insurance or sufficient insurance to cover your court awarded damages you can collect the difference under your own policy, up to your policy limits and if your limits are higher than the third party's. back to top
Homeowners
1. Do home insurance policies vary from one insurance company to another?
Yes they do vary from company to company, but there are broad similarities. The insurance industry typically has three types of policies, known in the industry as the Standard (or Basic), the Broad, and the Comprehensive. The Standard form insures against a number of "named perils' that might cause damage to the dwelling and its contents. Named perils could include such things as fire, lightning, windstorm, hail, theft, and certain types of water damage. The "Broad" Form insures the dwelling for "all risks" coverage, but leaves the contents coverage on a named perils basis. "All risks" coverage provides protection from anything that can cause you loss or damage, subject to specific exclusions. TYPICAL EXCLUSIONS on an all risks policy could include faulty workmanship -- e.g., your shingling was not properly installed and are now causing water to leak into your home. Additionally all risks policies will not insure losses caused if some component of your home or contents wears out. The "Comprehensive" policy provides all risks coverage on both the dwelling AND the contents subject to exclusions. 2. How are the dollar limitations on items, such as jewelry, furs, etc. determined?
Items such as these are covered by your home owners policy as part of the contents. They are, however, only covered for the perils of the main policy and are also subject to any dollar limitation & deductible in that policy. The Standard & the Broad policy, therefore, wouldn't provide coverage if you lost such an item, because they are covered on a Named Peril basis. The Comprehensive Coverage would most likely cover "lost" jewelry, but it would be subject to a relatively low dollar limit of a few thousand dollars. People therefore tend to add jewelry on specific riders/endorsements to obtain better (all risks) coverage if the policy is a Standard or Broad, and/or to eliminate the dollar limitations & deductible. (See Scheduled Property Floater) Because the dollar limitations vary from insurance company to insurance company in terms of actual dollar amounts, the types of property (e.g., some have limits on bikes, others do not), and also whether the limitations apply to all types of losses, it is best discuss your needs and policy with your broker or agent. 3. It has been recently brought to my attention that water damage coverage varies very
much from one policy to another. Should I be concerned?
It is very important to have your agent or broker explain the various options available to you. On one end of the scale, water damage caused by water overflow from the plumbing system, water from burst pipes, and also frozen pipes may be covered, but damage caused by continuous seepage, sewer backup, etc. may not be covered. Because this peril can cause extensive damage, it is important that you understand exactly what your policy covers and what is not covered. 4. Will damage to my home or contents, be settled on a depreciated or a
non-depreciated basis?
This is another important issue to discuss with your broker. Most building settlements are on a non-depreciated basis, and many policies settle contents on the same basis. But you must be aware that there are certain forms that settle on a depreciated basis. If settled on a non-depreciated basis, a settlement on contents normally requires that you actually replace. Should you choose to settle on a cash basis, the settlement will be on a depreciated one. 5. Will my homeowner policy pay the extra cost of having to conform to current building codes/city bi-laws?
Most likely -- no. You should discuss this with your agent or broker about this. Most property policies do not pay for this. There are endorsements available (not from all companies) that can add this coverage. A discussion with your broker or agent may help you determine whether you wish to purchase this coverage, whether you already have it, or whether you need it. back to top
Homeowners Endorsements
1. How does a SCHEDULED PROPERTY FLOATER work?
Your policy limits the amount available for theft coverage on such items as:jewelry, furs, cameras, fine arts, guns, stamp and coin collections and silverware. For an additional premium, coverage on any of these items can be increased and the deductible eliminated. A complete listing of all items to be covered and either a bill of sale or a professional appraisal is required. 2. What is the purpose of a WATER DAMAGE ENDORSEMENT?
This coverage is not available on all policies, but for those who do qualify this endorsement adds coverage for sewer back-up, which is excluded from your policy. 3. Do I need a WATERCRAFT ENDORSEMENT?
It depends! There is limited coverage included on your policy for personal use watercraft that are less than 26 ft and 50 hp inboard and 24 hp outboard. This coverage can be broadened or larger craft insured for an additional premium and subject to policy conditions. To include this coverage a complete description and serial numbers are required. 4. Why would I want an endorsement to cover OUTDOOR RADIO AND TELEVISION ANTENNA, INCLUDING SATELLITE DISHES?
Simply put because of the limited coverage that is normally provided for these types of losses. For an additional premium any losses due to weight of snow, ice, sleet, windstorm, hail or any direct physical loss can be covered (subject to the conditions and wordings of your individual policy). A complete description and serial numbers are required. back to top
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