September 1, 2010 Changes

Beginning September 1, 2010, if you are buying a new policy or renewing an existing one, you have the following options with respect to Statutory Accident Benefits*:

You also have new choices to customize your deductibles – the portion of a loss that you are
required to pay.

• Tort deductible – You have the option to reduce the deductible associated with court awarded compensation for pain and suffering to $20,000 from $30,000, and for Family Law Act claims to $10,000 from $15,000.
• Direct Compensation – Property Damage Coverage – You have the option of a $500, $300 or no deductible at all on coverage to repair the auto of the driver who is not-at-fault.

What else is new?

Other key changes include:

• Prohibiting use of credit scores in giving quotations for your auto insurance rates.
• Accidents where you are 25 per cent or less at-fault will no longer affect your premium.
• The deductible that is applied to court awards for fatal accidents has been eliminated.   
• If your auto has been damaged or written off after an accident and you don’t agree with the value you have been offered or your degree of fault for the accident, you can choose the appraisal process outlined in the Ontario Auto Policy to settle the dispute, and the insurer must agree to participate.
• If you have a minor injury due to an auto accident, your medical and rehabilitation accident benefits are limited to $3,500 regardless of the coverage level you have selected.
• Insurance companies must send benefit statements to their claimants, advising how much has been paid to date, and the additional amounts remaining for medical, rehabilitation and attendant care benefits.
• Coverage is extended to rented autos with a Gross Vehicle Weight Rating (GVWR) of more than 4,500 kilograms, if for personal use and rented for up to 7 days.
  

Understanding Auto Insurance

Whether you are currently shopping around for auto insurance, your policy is about to expire, or you’re looking to save money on your current policy, it is important to understand how your policy works.

Auto Insurance - It's the Law!

Ontario law requires that all motorists have auto insurance.

Fines for vehicle owners, lessees and drivers who do not carry valid auto insurance can range from $5,000 to $50,000.

If you are found driving without valid auto insurance, you can have your driver's licence suspended and your vehicle impounded.

If you are convicted of driving without valid auto insurance, your insurance company may consider you a "high-risk" driver and charge you higher premiums or refuse to sell you insurance altogether. If you are injured in an accident while driving or occupying an uninsured vehicle:

• you may not be entitled to receive income replacement and/or non-earner benefits; and
• you may not be allowed to sue the at-fault driver for compensation as a result of injuries received in the accident.

More importantly, if you are found to be at fault for an accident causing injury or death to another person, you may be held personally responsible for his/her medical costs and other losses.

What's in a Standard Auto Insurance Policy?

If you own a vehicle in Ontario, you are required to, at the very least, purchase the following automobile insurance coverage:

Extra Coverage for Loss or Damage to Your Vehicle

In addition to the standard policy coverages you may also buy extra coverage for loss or damage to your vehicle including:

Note: A deductible may apply to all of the above coverages.

Other Optional Enhancements to Your Coverage

Additional optional enhancements, also known as policy endorsements or Ontario Policy Change Forms (OPCF), are special agreements that allow you to change, add or reduce the amount of coverage for certain situations.

The six most common policy endorsements are:

Please keep in mind that these are only some of the many policy endorsements available for purchase. Ask us which policy endorsements would benefit you.

How Your Auto Insurance Rates are Set

Your auto insurance rates are determined by a combination of factors including:

1. Your Personal Profile

The type of vehicle you drive: Many insurance companies rate makes and models of vehicles according to their actual claims experience, such as the cost of repairs, the rate of injury, and the likelihood that a particular vehicle may be stolen or involved in an accident. The Insurance Bureau of Canada (IBC) has a document called How Cars Measure Up. This document provides information on the claims experience of most models of passenger vehicles. To review or print the latest version of "How Cars Measure Up", visit IBC’s website at: www.ibc.ca.

Your driving record: The premium you pay also depends on your driving record. This includes accidents where you are more than 25 per cent at-fault1, the length of time you have been licensed to drive, whether or not you have taken a driver-training course that your insurance company recognizes, and driving convictions (such as: speeding and impaired or careless driving).

Generally, your first minor conviction will have little or no impact on your rates. But if you have had a second minor conviction in the last three years, it will most likely affect your premium. If you have had accidents where you are more than 25 per cent at-fault over the last six years2, or a number of minor driving convictions or even one major or serious conviction over the last three years, your premium will be higher. Likewise, the better your driving record, the lower your premium will be.

How much you drive: Your auto insurance premium will also be affected by how much you drive. This is because the more time you spend on the road, the higher the chances of becoming involved in an accident. In urban areas, driving to work may include driving to a subway, bus, or train station. If you live close to work, you will probably have a lower premium than someone who lives far from work or who needs to use his or her vehicle for business.

Where you live: Auto insurance rates are generally higher in larger urban centres. This is because there are a greater number of vehicles on the road, and the chances of getting into an accident are higher. Also, more vehicles are stolen in urban areas.

Your age: In general, mature drivers have fewer accidents than younger drivers, particularly teenagers. Drivers who are 25 years of age and over can generally buy insurance at a considerably lower cost than younger drivers.

2. The Amount of Coverage You Purchase

Many people buy additional protection beyond the mandatory coverage. For example, if you buy optional Collision Coverage, which protects you for damage to your vehicle regardless of who caused the accident, or Comprehensive Coverage, which protects you against theft, vandalism, hail, or explosion, your vehicle will, be covered against any such incidences, but you will pay more.

There are also other options, such as increasing your Third-Party Liability protection or increasing your Standard Accident Benefits Coverage. These options give you more choice and flexibility over your coverages that will allow you to customize your policy to better suit your needs. All of these optional coverages will have an effect on the cost of your policy.

3. Your Deductible

Your deductible is the portion of a loss that you are required to pay. Your deductible can vary, depending on the type of coverage you have and the percentage of fault you are assigned in the event of an accident. There are deductibles for Collision or Upset, Comprehensive, All Perils, and Specified Perils Coverages.

You can also pay a lower premium by having a deductible on Direct Compensation-Property Damage (DC-PD) Coverage or raising the deductible on the other coverages.

For example, by having a higher deductible of $500, instead of $300, on Comprehensive Coverage, you can save about 10 per cent off your Comprehensive premium.

These savings are due to the fact that higher deductibles mean you pay more towards the cost of repairing your vehicle, while your insurance company pays less toward the total cost of repair. As a result, your premium will be lower.

If you'd rather have lower deductibles, you may be able to do so if you meet certain conditions and if your company offers them, but your premium will be higher. (Recognize, however, that since Collision or Upset and Comprehensive are both optional coverages, your insurance company may obligate you to carry higher deductibles if you have had a lot of prior claims.)

If you have an older vehicle, you may choose to reduce your premium further by dropping Collision or Upset and Comprehensive Coverages entirely.

4. The Insurance Company You Choose

As mentioned above, auto insurance premiums for the exact same coverage can vary substantially from insurance company to insurance company.

Why?

Financial factors unique to each insurance company will contribute to the amount each company will charge you for auto insurance. This is why it is important to shop around!

Insurance works according to a "pooling" concept. You are one member of the risk group in the company you select as your insurer. Your company charges premiums based on the claims experience of the entire group. If an insurance company's claims experience for a particular risk group is significantly higher than another insurance company’s, its insurance premiums will be higher.

Consider the following example:

Several people (we'll call them Risk Pool A), purchase individual auto insurance policies from Insurance Company A.

Insurance Company A then charges each policyholder in Risk Pool A an annual insurance premium and “pools” the money collected.

In the event that an individual from Risk Pool A is injured in auto accident, Insurance Company A will provide him or her with supplementary medical, rehabilitation, attendant care, non-earner, and income replacement benefits.

Some individuals in Risk Pool A may receive insurance benefits that total far more money than they have ever paid to Insurance Company A. Others will pay their premium annually, but never make a claim.

To establish individual premiums for policyholders in Risk Pool A, Insurance Company A's insurance actuaries (professional business people skilled in the application of mathematics to financial problems) will estimate the number and cost of future claims for Risk Pool A. Insurance Company A will then predict the cost to administer these claims and use this information, along with each individual’s personal profile, the amount of coverage they purchased, and their deductibles, to set individual premiums.

Discounts

As an insurance shopper, you should check with your broker about possible discounts that may be applicable to you, such as:

Driver Training Discount: Most companies offer a discount or a reduced premium for new drivers who have completed a recognized driver-training program.

Group Discount or Group Rates: If you belong to an eligible group, check to see if it offers group rates. An eligible group may include employees of the same employer, members of a union or professional or occupational association, or certain non-profit associations.

Multi-Policy Discount: Some insurance companies offer a discount if you purchase your vehicle and home insurance from the same company. This discount can range from 3 to 15 per cent.

Multi-Vehicle Discount: You may be able to get a discount if you insure more than one vehicle with the same insurance company. The multi-vehicle discount can range from 5 to 15 per cent.

Renewal Discount: Your company may offer you a renewal discount if you have been with the company for a certain number of years without an at-fault accident. The discount can range from 5 to 20 per cent.

Retiree Discount: If you are retired and meet certain conditions, you may be able to get a retiree discount on your premium. The retiree discount can range from 5 to 15 per cent off your premium for Accident Benefits coverage.

Other Discounts: Some companies may offer discounts if your yearly vehicle mileage is low or if you have an alarm in your vehicle. Each company applies discounts differently. Check with your broker, agent or insurance company to find out what discounts are available to you.

Tips for Saving Money on Auto Insurance

The following tips may help you save money on your auto insurance:

Build a good driving history free of accidents and convictions. This means driving carefully and obeying the rules of the road. Wear your seat belt and don’t use your cell phone while driving. Don’t drink and drive.

Be a comparison shopper. Talk to your friends and neighbours. Make some phone calls and check websites for on-line quotes. Compare rates. Different companies price policies differently. Do your shopping well in advance of when your current policy expires.

Don't pay for coverage you don't need. For example, it may not be cost effective to have Collision or Upset and/or Comprehensive Coverages on a vehicle that is worth less than $1,000, because any claim you make would not substantially exceed your deductible or the annual premium.

Consider higher deductibles. This means you’ll contribute more toward the loss if you have an accident, but it will also mean a lower premium. For example, a zero-dollar deductible usually applies to your DC-PD Coverage. However, you may be able to lower your auto insurance premium by increasing this deductible.

Make sure you always pay your premium on time. If you pay your premium by cheque or through automatic withdrawals from your bank account, make sure you always have enough money to cover your payment. If your insurance company is unable to withdraw your payment because you don’t have enough money in the account, it could result in the cancellation of your auto insurance policy. If your policy is cancelled for non-payment of premium more than twice, and you have to purchase auto insurance all over again, many companies may consider you a higher risk, and you could pay much more for your auto insurance. Also, if you've had your insurance policy cancelled more than once over the past three years because you failed to pay your premium, insurance companies are not required to offer the option of monthly premium payments.

Choose the type of vehicle you drive wisely. For example, if you buy a vehicle with a high theft rate, your premium will be higher. Choose a vehicle with good security features.

Take advantage of discounts which may be available to you. (See Discounts for more information.)

Make sure you tell your broker, agent, or insurance company about any changes to your policy (e.g., different drivers, different use of the vehicle). In some cases, your premium will drop.

Finally, don't switch insurance companies mid way through the policy. Wait until renewal time to avoid penalties for cancellation.

Tips for Young Drivers

As a young driver, here are a few tips on getting the best rate for you:

• Take a driver-training course that is recognized by your insurance company.
• Consider gaining experience as a named occasional driver under the insurance policy of a parent or guardian, rather than as a principal driver of your own vehicle. Premiums for young, occasional drivers are much lower than premiums for young, principal drivers.
• Ask your insurance company if they offer any student discounts. Some companies give discounts to young drivers with good grades or young drivers who live away from home for part of the year.

As a young driver, building a good driving record free of at-fault accidents and driving convictions is the best way to ensure low future premiums.

For more information and tips for young drivers, read the New Drivers pdf

 New Driver Information

Did You Know That...

• It is not only the driver but also the owner of the vehicle who is liable when an accident is caused with his or her vehicle. This puts a heavy onus on owners to ensure that they give only competent drivers permission to operate their vehicle!
• Your auto insurance rates are based on the information you have given to your broker, agent, or insurance company. An insurance company has the right to cancel your policy if the information you have given is not correct or complete.
• If you have a lot of comprehensive claims (e.g., repeat broken windshield claims), your insurance company may require you to have a higher deductible or may refuse to sell you Comprehensive Coverage at all.
• If you want to change insurance companies and cancel your existing policy before it expires, you may have to pay a penalty. You may instead want to have the new policy start once your existing policy expires.
• You should receive your policy renewal from your insurance company approximately 30 days before it expires. This allows you to change your policy, examine policy changes, or shop around.
• If you don’t want to renew your policy, you should notify your broker, agent, or insurance company immediately. Don’t just stop making payments: that will result in cancellation of your policy because of non-payment and possibly put you in a higher risk category.
• Your insurer can cancel your policy for non-payment of premiums, so long as it follows certain procedures. As required by the Insurance Act, the insurer must give you 15 days’ notice of termination by registered mail or five days written notice of termination if it’s personally delivered. If you pay the outstanding premium before the end of the notice period, the insurer may, but is not required to, keep the policy in force. If the insurer does not receive your payment before the end of the notice period, your policy will be cancelled for non-payment.
• If there is a lapse in your coverage due to cancellation of your policy because of non-payment of premiums, insurance companies may then charge you higher premiums for a future policy.
• Your auto insurance policy requires that any accident involving injury or property damage, be reported to your insurance company within seven days, regardless of who is at fault. If you are unable to report within seven days, you must report it as soon as possible after the accident.

Home Insurance

Buying a home is probably the largest single financial investment you have ever made. For most people, their home is their life savings tied up in bricks and mortar – bricks and mortar that, no matter how well built, are vulnerable to fire, theft and other disasters.

Could you possibly afford to replace absolutely everything you own? Recovering from even a partial loss, like having your home broken into and many possessions stolen, would cost more than most people could manage on their own. Home insurance protects you from having to pay out a huge amount at once, often at the very worst time emotionally.

Types of Home Insurance Policies You Can Buy and What They Cover

There are several types of insurance policies you can purchase. Please remember that the wording and what is covered may vary within these general categories from one insurance company to another.

Comprehensive

This is the most inclusive home insurance policy; it covers both the building and its contents for all risks, except for those specifically excluded. There are two types of insurance risks that are not normally included in any home insurance policy – those for which you can buy insurance (“optional coverage”) and those for which insurance is not available (“uninsurable peril").

Broad

If the comprehensive policy costs more than you want to pay and the named perils policy seems too risky, a mid-priced compromise is the broad insurance policy. This policy provides comprehensive coverage on the big-ticket items like the building and named perils coverage on the contents.

Basic/Named Perils

If you are looking to save money by carrying the financial risk of some losses yourself, you may wish to consider a named perils policy that covers only those perils that are specifically stated in the policy.

Extra Protection You Can Buy

There is additional protection, otherwise known as optional coverage, you can buy depending on where your home is and how much peace of mind you require. These perils are not automatically included in any home insurance policy. If you want to be protected against these risks, you must purchase coverage separately.

Sewer Back-up

This coverage is useful in some low-lying areas, especially if your area has storm and sanitary sewers combined. You may also want to install a back-flow prevention device, where permitted by local codes.

Earthquake

This coverage is especially worth considering if you live in a quake-prone region, such as parts of Quebec — especially around Montreal — the Ottawa Valley and British Columbia. Earthquake insurance generally covers loss or damage to your property caused by the actual shaking of the earth. It is subject to a higher deductible than the other perils insured by your policy. Your ordinary homeowner’s policy, on the other hand, would likely not cover this peril. However, if the shaking were to cause a gas main to break and ignite, the damage as a result of the subsequent fire would probably be covered under your homeowner’s policy.

The cost depends on where your house is and how it was built. Your insurer may be able to advise you of things you can do to cut the risk of earthquake damage to your home.

Ask your insurance representative about the following options for lowering your premium:

• Increasing your deductible, or your share of the cost of a claim. By increasing the amount you are willing to pay, you will decrease your premium.
• Package deals for insuring your home and car(s) with the same insurance company.
• Installing a sprinkler system or a monitored burglar or fire alarm.
• Quitting smoking. Many home fires are caused by careless smoking. Many insurance companies acknowledge that non-smokers have a lower risk of fire loss.

In addition to shopping around and comparing prices and coverage, homeowners can further lower their insurance premium by:

• Building a consistent, claims-free track record.
• Not over-insuring the home by including the market price of the land in the insured value. Whatever the limits of your policy, you cannot claim for more than the actual loss to insured property. “Insured property” does not include the market value of underlying land. You should insure your home for what it would cost to rebuild it in the coming year (replacement costs).
• Asking about other discounts. For example, some insurance companies provide discounts for seniors.

What Insurance Companies Look For When Insuring Your Home

Before an insurance company can arrive at an appropriate premium, it must first assess the likelihood – or risk – that you will submit a claim. For the most part, the lower the risk – e.g., a well-maintained home with updated wiring and plumbing – the lower the insurance premium. (Some insurance companies specialize in riskier clients and their homes.)

Your insurance representative will ask you a number of questions about your home. Insurance is based on good faith, so it’s important that you give complete answers. Policies vary, but here are a few things about which your company will ask.

Wiring: Some wiring (e.g., knob-and-tube, aluminum) can increase the chance of a fire, especially if the wiring has deteriorated or been damaged during renovations. Some insurance companies want a guarantee that a home does not have this wiring, some may give you time to have it removed, while others might request an inspection to ensure its safety.

Galvanized/lead pipes: Galvanized or lead piping usually means that the plumbing is older, and older plumbing is more susceptible to cracks, leaks and other problems. Insurance companies generally prefer homes where the plumbing has been upgraded to copper or plastic.

Electrical service: It is preferable to have breakers instead of fuses, and 100-amp service at a minimum. Fuses and lower electrical service can increase chances of a fire.

Heat source: Oil-heated homes can present a costly environmental hazard, so your insurance representative will ask for many details about the age and condition of your tank. Insurance companies tend to prefer forced-air gas furnaces or electric heat.

Wood stoves: These are a common source of house fires and carbon-monoxide poisoning, particularly if they are not properly installed and maintained. Insurance companies may want to inspect such installations. Consult your insurance representative before buying or renting a home with a wood-burning stove or installing one.

Age of roof: Companies generally prefer it if your roof has been updated within the last 20 years. Some policies will pay only depreciated values, as low as 25%, for damaged roofs near the end of their designated service life.

Other uses of your home: Companies will want to know if you have built or are planning to build a rental apartment into your home, begin operating a business there or make any other significant alterations to the structure or the way it’s used.

Condo Insurance

Condominium insurance can provide coverage for:

• your contents
• unit improvements and betterments
• assessments against your unit as a result of inadequate insurance on the building
• liability

We offer a variety of valuable coverage options to meet your condominium insurance needs:

• Comprehensive: Covers your personal property for All Risks
• Broad: Covers your personal property for Specified Perils

Both policies cover personal property, additional living expenses and personal liability.

If you own a condominium that you rent to a tenant, we offer a competitively-priced Rented Condominium policy, which covers your personal property (such as appliances), up to $15,000.

The following Additional Coverages are automatically covered in all our Condominium policies:

• Unit improvements and betterments
• Loss assessment for property and liability
• Condominium owner’s contingent liability
• Condominium corporation deductible assessment coverage

Tenant Insurance

Do I Really Need Tenant Insurance?

The short answer is yes. There are a few really good reasons for having tenant insurance.

For one, as a tenant you are liable – yes, legally responsible – for any harm you cause to any part of your building and to others who live or visit there. Yikes! If your faulty toaster oven starts a fire that damages not only your apartment, but also the entire complex, you may have to pay out a lot of money.

You could even find yourself in trouble if your party guests get out of hand and cause damage.

Then there are your possessions. You might not think that you have much of real value, but what if you had to replace them all at once, due to fire or water damage?

Replacing your clothing, alone, could run you a few thousand dollars.

And that old couch and bed might not look like much, but buying new ones would be hard on the wallet.

When you consider what it would cost to replace everything, monthly insurance premiums may look pretty good by comparison.

If you are like most people, you will probably never need to submit an insurance claim. But home or tenant insurance is peace of mind that you really shouldn't live without.

Automobile Insurance

Auto insurance protects the policyholder against financial loss in the event of an incident involving a vehicle they own, such as in a traffic collision.

Coverage typically includes:

• Property coverage, for damage to or theft of the car;
• Liability coverage, for the legal responsibility to others for bodily injury or property damage;
• Medical coverage, for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

Residential Insurance

Protect your property against loss or damage from a number of specified causes, such as:

• Fire or lightning
• Windstorm or hail
• Theft
• Smoke

Insurance for Cottages, Camps and Other Vacation Properties

Your vacation property is, like your home, one of your most valuable assets. It’s important to protect your investment with insurance. But you should note that vacation property insurance works a bit differently than insurance for your primary home.

How’s it used?

How the vacation property is used and how often it is occupied will dictate which insurance packages are appropriate for you. How much time do you spend there? Do you use it year-round? Do you rent it out at some point during the year? The answers to these questions are important when you are considering what type of coverage to buy for your vacation property.

Coverages for your vacation property

Most insurance companies will consider providing insurance for your vacation property only if you insure your primary residence with them as well. You can have your vacation property listed on your home insurance as a “secondary” or “seasonal” location, or you can have insurance for the property as a separate, stand-alone policy.

There is one main difference between insurance for you primary home and insurance for your vacation property: Vacation property insurance is almost always provided as a Named Perils policy, instead of a Comprehensive policy, because of the risk associated with the part-time occupation of the vacation home. “Named perils” means you have insurance coverage for specific risks, such as fire, explosion or smoke damage. Coverage for certain risks, such as water damage or vandalism, may be more difficult or expensive to arrange, because of the part-time occupancy. For example, if a water pipe bursts or if vandals break into your vacation home while it is vacant, the damage is likely to be more severe because no one will be there to take action.

There are some common exclusion in insurance policies for second homes. These include coverage for sewer back-up and damage to, or loss of:

• fences
• food in a freezer
• garden equipment
• outdoor plants
• trees and shrubs

Even if you have a “fixer-upper” and the building is worth little, you will still need to have Third-Party Liability coverage to protect yourself in case someone gets hurt on your property or if you happen to start a fire that spreads to neighbouring properties.

Some other coverages you may want to consider including are:

• Contents coverage: Some vacation property packages provided by your insurance company automatically include contents up to a certain limit. This coverage applies to contents that are permanently kept at the vacation home. (Anything that you take back and forth – e.g., clothing – is covered by your primary home insurance policy.) If coverage provided is inadequate, additional coverage may be purchased.
• Detached private structures: Some vacation property insurance packages include a limited amount of coverage for any outbuildings, including boathouses, garages, or sheds. But you may need additional coverage to ensure that you are fully protected.
• Replacement cost: This type of coverage covers the cost of repairing an item or replacing it with a new one, without any deduction for depreciation.

To get more information about your vacation property insurance options, please contact your insurance representative.

Commercial Products Offered

Products we offer:

Commercial Auto -Fleet & Single Vehicle Policies – from a single vehicle for a contractor to businesses requiring insurance for their entire fleet, we can meet your needs, whatever they might be!!

Commercial Property & General Liability Policies – call us to discuss your needs, with a wide range of companies and products, we’ll tailor a solution that’s right for you!

Sports & Special Event Insurance – hosting a one-time event, need hole-in-one insurance, attending a trade show, need insurance for a wedding? With access to markets across Canada we can find the solution for you!!

For a Quote – please call or e-mail us directly for a quote on your commercial insurance needs.

Travel Insurance

Whether it’s a short term trip, extended stays abroad or you’re a visitor to Canada, we have the right product at the right place.

Please call us at the office to discuss your travel insurance needs.

Insurance We Offer

Delbert R. Smith Insurance Brokers offers a complete portfolio of insurance products and services designed to work together to meet today’s needs and achieve tomorrow’s goals.

Contact Us Today