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Are all home insurance policies the same?

There are many similarities but polices do differ. It's better to have an "All Risk" policy versus a named peril policy. The "All Risk" is the best money can buy. But beware, just because it says "All Risk" does not mean every claim/scenario is covered. There are numerous exclusions that are part of every property policy.

I have just bought a new home but won't be moving in right away. When is the best time for me to get home insurance?

You need to ensure your home insurance coverage begins as soon as you become the legal owner of the property. Before moving into the house, make sure to ask your broker or agent if your current policy covers your contents at both old and new locations, and also while in transit. Moving into a newly built home? It's important to note that theft insurance is only applicable when a building is ready for occupancy; vacant buildings are not normally insured for more that 30 days.

What type of perils (causes of loss) are insurable under a typical home policy?

The most common types of perils are fire and theft but some examples of others that can be insured against include:

Electrical currents
Explosion
Lightning
Smoke (only if released suddenly from malfunctioning cooking or heating devices, not from fireplaces)
Vandalism (while building is normally occupied)
Water damage (this is a complex issue; be sure to discuss it carefully with your agent or broker)
Wind and hail (usually applies to the outside of a building with exceptions for antennas, satellite dishes, etc.; the interior of a building and its contents are covered only if the storm has first created an opening)

Acts of God are never covered, right?

Wrong, things like a tornado, lightning and hail are always covered, however earthquake is a common exclusion but this coverage can be added to your policy, for an additional premium.

What is the difference between replacement value and actual cash value?

The amount of money your insurer will pay to you following an insured loss is usually referred to as either Actual Cash Value (ACV) or Replacement Cost.

Actual Cash Value is the cost of replacing the property with something of like kind and quality ­ minus an allowance for depreciation.

Replacement cost means you may be able to receive a settlement of your claim without deduction for depreciation, but this requires you to have the property repaired or replaced with like kind and quality.

A deductible may apply in either case.

It is important to note that most home insurance policies automatically include "replacement cost" payment for building losses if repair or rebuilding occurs. The settlement can be up to, but not greater than, the amount of insurance stated in the policy.

Although you and your insurer may appraise your home thoroughly, there is still a possibility of underestimating the replacement cost of a building. Guaranteed replacement cost coverage will make up for such a shortage either completely or to an agreed amount.

"No-Fault" means that your insurance company will pay benefits to your, the driver, and to anyone else injured in your vehicle who does not have his or her own Ontario automobile policy, no matter who caused the accident. Their insurance company pays for injuries sustained by persons in the other vehicle.

I've sold my vehicle and don't plan on getting a new one right away. Will I be penalized for lapsing my insurance coverage?

A person cannot be penalized for a lapse in insurance coverage unless:

the driver's licence was suspended because of a conviction related to the use or operation of the automobile such as impaired driving;

an accident or conviction happened that would result in higher premiums and the individual did not notify the insurance company;

the insurance policy was cancelled for non-payment of an insurance premium.

How much liability should I purchase?

As much as the insurer is willing to sell you. Most companies will sell up to $2,000,000 on an auto policy.

What basic coverage must I have legally?

At the very least, you must have the following coverage to operate a vehicle on Ontario roads:

Statutory Accident Benefits
This covers medical expenses, provides income replacement and various other benefits if you are injured or killed in a car accident, no matter who is at fault in the accident.

Third Party Liability of at least $200,000
This provides coverage for you or anyone else driving your car, if someone else is injured or killed or their property is damaged as a result of a car accident.

Direct Compensation ­ Property Damage
This protects you if someone else causes damage to your car and its contents. It is called direct compensation because you collect direct from your insurer.

Uninsured Automobile Coverage
This covers you if you are injured or killed by an uninsured or unidentified motorist. It also protects you if an uninsured motorist causes damage to your car or its contents.

While the above is the minimum requirement, you can still choose to purchase additional coverage for extra protection.

I'm considering buying a new car and would like to keep my insurance costs down. Do certain models of cars cost less to insure than others?

The Canadian Loss Experience Automobile Rating system (known as CLEAR) is the system that most insurers now use in calculating automobile insurance rates. This system bases rates on each vehicle model's claims experience, including cost of repairs, frequency and severity of injury claims, and frequency of theft. But the kind of vehicle you drive is only one factor insurers take into account when calculating your premium. Other factors include your driving record, your location and how far you drive on a regular basis.

How can I save money on car insurance without sacrificing thorough coverage?

Of course, as a client of FAIR Insurance, our staff will help you find the best way to save money on your auto insurance. The following explanations are some key examples of how to reduce your premiums.

Higher Deductibles: One of the best ways to save money on car insurance is to choose a higher deductible. The deductible is the portion of the claim that you agree to pay. In most cases, the higher the deductible the lower
the premium.

Minimize Claims: Another way to save is to not make a lot of small claims. The more claims you put through, the more you will be seen as a risk to insure.

Discounts: Most insurance companies will offer discounts for placing more than one line of business or more than 1 car with their organization. Speak to your FAIR Broker to see which discounts you qualify for.

Does my car insurance policy cover me anywhere in the world?

No, your car policy covers you for incidents occurring in Canada, the US and on a vessel travelling between ports of those countries.

What happens if I get a new car over the weekend, and my insurance company is closed until Monday morning can I drive it / is it covered?

A newly acquired automobile or trailers will either be a replacement or an additional automobile and should not be covered under any other policy. A replacement automobile will have the same coverage as the described automobile it replaces. We will cover an additional automobile as long as:

We insure all automobiles you own and

Any claim you make for the additional automobile is make against a coverage we provide for all your other automobiles.

Your newly acquired automobile(s) will be insured as long as you inform us within 14 days from the time of delivery and pay any additional premium required.

How do traffic tickets affect my insurance rates?

Most insurance companies will excuse one minor conviction such as being charged for running a red light, but they may not overlook more than one in a three year period. A driver with a flawed record is considered a higher risk on the road and is charged accordingly.

If I lend my car to a friend and they get in an accident, do my rates go up?

If you've given another person permission to use your vehicle, and they get into an accident that deems it necessary to make a claim, it will be your insurance rates that are affected.

How to get the best Value

To ensure you get the best value from your car insurance policy:

Maintain a good driving record free of accidents and convictions, this means driving safely!

Don't pay for coverage you don't need. For example, if you have an old car, it may not be worth having collision and comprehensive coverage.

Consider higher deductibles. This means you'll contribute more toward the cost of your claims if you have an accident, but it will also mean a lower premium.

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 you insurance company is unable to withdraw your payment because you don't have enough money in account, it could result in the cancellation of your car insurance policy.

You may purchase other optional coverages including Coverage for Transportation Replacement, Family Protection Coverage and Removing Depreciation Deduction.

Coverage for Transportation Replacement
This coverage under the collision or comprehensive portion of your policy provides you with the use of a rental car while your car is being repaired due to a claim covered by the policy.

Family Protection Coverage
This coverage protects you to the same limit as your liability coverage if you are involved in a car accident with an underinsured driver.

Removing Depreciation Deduction
This coverage removes the insurer's right to deduct depreciation from the value of your car when settling a claim for loss or damage caused by a peril for which you are insured.

Please keep in mind that these are only three of many other optional coverages that you may want to buy. Ask your Broker for more information on these and other coverages.

You can choose how much insurance you want to have. But you must, at the very least, have the following;

Statutory Accident Benefits
This covers your medical expenses and provides you with income replacement benefits if you are injured in a car accident, regardless of who is at fault in the accident.

Third Party Liability of at Least $200,000
This protects you if you are sued because you or anyone else driving your car injuries someone else or damages someone else's property.

Direct Compensation-Property Damage (DC-PD)
This protects you if someone else cause damage to your car and its contents. It is called direct compensation because you collect directly from your insurer. See the section called "Glossary" for a definition of DC-PD.

Uninsured Automobile Coverage
This covers you if you are injured or killed by an uninsured motorist. It also protects you if an uninsured motorist causes damage to your car or contents.

While the above coverages are what you must buy at the very least, you can choose to buy extra coverage to get extra protection. Ask your Broker, Agent or Insurance Company for more information.

You can choose to increase your maximum level of coverage for accident benefits. Such additional, or "top-up" benefits, include:

An optional income replacement benefit
An optional medical, rehabilitation and attendant care benefit
An optional caregiver and dependant care benefit, and
An optional death and funeral benefit

You can buy any or all of the optional benefits described below. You can also buy indexed accident benefits, which are kept in line with the Consumer Price Index.

Check to see if you have benefits available to you at work or elsewhere, so that you are not paying for coverage you already have. If you are covered by these benefits elsewhere, you may not need to buy optional benefits. Your broker, agent or insurance company can help you decide which, if any, optional benefit you may require.

Here's a brief description of each of the benefits:

Income Replacement Benefits
If you become disabled as result of a car accident, you may be eligible for weekly income replacement benefits of up to $400. If this may not be enough to cover you current income level, you can buy optional income replacement benefits to increase your maximum weekly protection to $600, $800 or $10000.

Medical Rehabilitation and Attendant Care Benefits
The standard maximum amount for medical and rehabilitation expenses, such as physiotherapy, chiropractic treatment, dental expenses, etc. is $100,000. If you are catastrophically injured, the maximum is $1,000,000. The standard maximum for attendant care is $72,000. If you are catastrophically injured the maximum is $1,000,000. You can buy optional benefits which will cover up to $1,000,000 in additional medical, rehabilitation and attendant care expenses, and up to $2,000,000 for catastrophic injuries.

Caregiver Benefits
If you are providing care full-time to dependants and are disabled as the result of a car accident, you are eligible for caregiver benefits. The standard maximum amount for caregiver benefits is $250 per week for one dependant, plus $50 per week for each additional dependant. If you buy optional caregiver benefits, the coverage increases to $325 per week for one dependant, plus $75 per week for each additional dependant.

Dependant Care Benefits
You can only claim optional dependant care benefits if you are employed at the time of the accident and you have to pay for childcare expenses as a result of the accident. Optional dependant care benefits cover up to $75 per week for the first dependant and $25 for each additional dependant.

Death and Funeral Benefits
In the event that you die as a result of a car accident, the standard amount which will be paid is $25,000 to your eligible spouse, $10,000 for each dependant, and a maximum of $6,000 for funeral expenses. If you buy optional benefits, you can increase these amounts to $50,000 to you eligible spouse, $20,000 for each dependant and $8,000 for funeral expenses.