IBC has launched a campaign to promote public awareness regarding insurance. The Know Your Policy campaign targets Canadians that may not fully understand what is covered by their policies and unless you’re a professional insurance broker, this target audience likely includes you. Let’s consider some statistics.
Data shows that 23% of Canadians admit to not knowing what their insurance policies cover. Note the word “admit” because when you dig deeper you’ll see it can be even more dangerous to assume that you know what is covered, without proper investigation. For instance, the same data shows that 42% of Canadians were surprised by something on their insurance policy when it came time to file a claim. 57% indicated that they don’t bother to keep a detailed inventory of their valuables and only 29% update their insurance policy when they make a major purchase. The list goes on and on, making one thing clear – most of us simply don’t know everything we should know about our insurance.
Fortunately, this lack of policy literacy is often just attributable to a lack of interest in reading our policies. It’s understandable, as far too often policy documentation is full of jargon that will have you falling asleep faster than reruns of The Apprentice. But in the end, it is important to educate yourself by asking the right questions, and not put it off any longer.
3 Immediate Inquiries to Make About Your Household’s Insurance Policies, Today
1. Home Insurance – What is and Isn’t Covered?
You need to identify which type of policy you have. Is it standard, broad, or comprehensive? Contrary to the name, a “standard” policy is rarely sold and is not even offered by some insurance providers because it leaves homeowners exposed to all sorts of liability. A “broad” policy imparts “named perils” coverage for losses to your home or its contents that are caused by the perils named in the policy. If a peril is not listed, your insurance company will not pay for the damage. You can see why your best option is a comprehensive one. A “comprehensive” policy covers your home and attached structures and contents and compensates you for all losses to your property except when caused by a peril that is intentionally excluded by the policy.
Another example of where you may be misinformed is with respect to residential flood insurance. Did you know that up until last year overland flood coverage was not available in Canada? Given that it is now, have you added it to your plan? It’s time to do so, starting here.
Things get even more complicated when you reside in a condominium, where you are opened up to personal liabilities concerning damage you cause to a neighbors’ unit, and by neglecting to insure any unit improvements made by you or the previous owner.
2. Automobile Insurance – What is and Isn’t Covered?
Basic ICBC Autoplan insurance covers the following:
- Third-Party Legal Liability
- Accident Benefits
- Underinsured Motorist Protection
- Protection Against Hit-and-Run and Uninsured Motorists
- Inverse Liability Coverage
What it doesn’t cover, is the replacement, repair, or adequate response to other risks that are covered by optional insurance. And that’s the thing – optional insurance. Many BC drivers are unaware of what is available to them, and thus not aware of their exposure to liability. For instance, did you know that you are covered (via ICBC Autoplan) on a road trip to the southernmost tip of San Diego, but as soon as you make that brief excursion to Tijuana you are no longer covered? What are the options to cover you for unexpected liabilities? The full suite of private coverage is addressed here:
- Specified Perils
- Vehicle in Storage
- Limited Depreciation Coverage
- Replacement Cost Coverage
- Collector & Vintage vehicles
- Extended Third-Party Legal Liability
- Excess Underinsured Motorist Protection
- Loss of Use
- Vehicle Travel Protection
3. Other (Household Well Being) Insurance – What is and Isn’t Covered?
While there are many policies that fall under the other category, we are focusing on those common to your British Columbia household. These are items that impact your personal well being, including travel medical, and life & disability insurance.
a) Travel medical literacy in Canada is very concerning, especially when you consider that 60% of surveyed Canadians don’t regularly purchase travel medical before leaving the country. And for those that do, a recent study shows that nearly half don’t bother to review their policy before travel. Did you know that your policy can become void due to any (not exhaustive) of the following?
- Diagnostic tests or changes to prescription prior to travel
- Traveling while pregnant
- Accidents caused by intoxication
- Injury caused by participation in an extreme sport
b) Life insurance coverage can seem convoluted if you haven’t taken the time to look into it. What you need to know, is that there is generally only three kinds of life insurance programs. These include Term, Permanent, and Combination.
Term insurance only covers you for a stated period of time, so you will want to make sure that you’re up to date, especially if you purchased the policy quite some time ago. Permanent coverage remains in force as long as you maintain your premium payments, although you may become uninsurable due to failing health. Combination coverage combines features of both and grants you more flexibility. Whichever the case, it is a good rule of thumb to review your life insurance policy at least every 1-5 years.
c) Disability insurance is something many household neglect to consider, assuming that worker’s compensation, employment insurance, group insurance protection plans, and Canada pension plans will foot the bill in the event of injury resulting in longterm or permanent disability. But, it may not be enough, not if you want to be fully covered. Instead, disability insurance will provide the answer you are looking for. It is also worth looking into critical illness insurance to help ensure that you and your household are truly prepared for whatever may come your way.
Ready to take the next step so that you no longer have to worry about what is and isn’t covered by your policy? If you reside in BC and you’re unsure of where to begin, simply contact one of our offices to speak with an independent insurance broker who will assess your policy and make sure all of the gaps are covered. Another great way to stay on top of everything is to follow our weekly blog for updates on the industry along with tips to protecting yourself and your household.