Insurance details can be complex and confusing. That’s the value we bring as your broker representative. We’ll walk you through the details and the fine print, until you are clear about your coverage. 

We’ve assembled a list of common questions. We hope you find the answer to your question below. If you don’t, or even if you’d rather have someone explain it to you in person, give one of our brokers a call. We love to chat about this kind of stuff.

Commercial Insurance Questions

What is a Commercial General Liability policy and what does it cover?

Commercial General Liability covers your business and employees (other than professionals and subcontractors who must carry their own liability insurance) for damage that may be caused to a Third Party’s property, or bodily injury that may be caused to a Third Party for which you are found legally liable. If legal action is brought against you with respect to the above, this coverage also pays for defense costs. Coverage is typically for all risks and is subject to exclusions contained in the policy. Common exclusions include automobiles, aircrafts and work performed at airports, contractual liability, obligations under WCB or to your employees, damage to your own property, use of explosives/weakening of supports, professional services, abuse, asbestos, data, fungi, pollution, terrorism and war (you may be able to add coverage back on for some of these exclusions). Additional coverage is also often added to insure for your completed products and operations, personal injury, advertising injury, medical payments, tenants legal liability, and non-owned automobiles.

Why do you need to know my annual revenues for Commercial General Liability?

The rates of your Commercial General Liability insurance are typically determined by the amount of your annual revenues. The higher your revenues, the more work you will be performing, which means there is more exposure or more chances of a loss occurring.

Why is it important to advise your broker of any material change, such as change in ownership, loss payable/lessor, operations and use of equipment/vehicles?

If there is a material change to the risk that is within your control and/or knowledge and it is not reported to the insurer/broker, a loss to that particular object or due to that operation is deniable by the insurer. To properly rate your risk, an insurer must know the exact operations and be able to rate/charge premium accordingly.

How is the liability determined in a commercial auto accident (Intercompany Settlement Agreement versus Highway Traffic Act)?

Accidents are adjusted according to Tort Liability (whomever is negligent is at fault), unless both parties to the accident are insured by companies that are signatory to the Intercompany Settlement Agreement, which is an agreement that specifies how claims would be adjusted given the particular scenario.

The company I work for wants me to list them as an Additional Insured. What does this mean?

They are asking to be protected under your Commercial General Liability in the event they also get named in an action as a result of the work you are performing on their behalf. It does not provide coverage for any work/services that they perform or give them rights to make changes to your policy. This is a common request, and your broker will provide you with a Certificate of Insurance as evidence of their interest.

General Insurance Questions

What is an independent broker?

What defines an independent insurance broker is our ability to shop your insurance through multiple carriers. Our job is to help you create the best coverage package to meet your needs and then go to the market and find the most competitively priced insurance carrier for those coverages. And although there are many brokers who claim independence, we are truly independent of ownership in whole or in part by any insurance company. This means we are truly free to shop your insurance needs to any of the insurance companies in our vast partner network.

What is an underwriter vs. an adjuster?

An underwriter is someone who reviews the individual risks on behalf of an insurer. It is his or her responsibility to accept or reject the risk for the insurance company. An adjuster is someone who investigates, negotiates and settles claims.

What’s the difference between ‘actual cash value’ and ‘replacement cost’?

Actual Cash Value is the value of a piece of property at the time of a loss subject to its age and condition (depreciation). Replacement Cost is the cost to replace a damaged piece of property with another of like kind and quality.

Why do I have to pay a deductible if I already pay high enough premiums?

The deductible is the amount you must pay before the insurance company’s coverage begins. This is part of the policy whereby the insurance company can avoid paying relatively small claims as a method of keeping premium costs down. This also leads to a higher degree of loss prevention by the consumer as they are responsible for a portion of the loss. The amount of the deductible is proportional to the premium. If you wish to have a lower deductible you must accept a higher premium and, conversely, lower premiums can be obtained if you carry a higher deductible. An exceptionally low premium rate may signal an equally exceptional high deductible amount. It is important to find a balance between affordable premiums and a fair deductible when buying insurance.

What is a 43(r) and how does it relate to my personal/commercial vehicle?

When this endorsement, or addition to the policy, is purchased, the insurer waives the application of depreciation for the repair or total loss of the insured vehicle should it be damaged by an insured peril. The waiver applies for a specified time after purchase when the vehicle is purchased new and the insured is the original owner. In the event of a partial insured loss, no depreciation is applied to the replacement cost of required parts. If the vehicle is a total loss, the insurer pays the original purchase price of the vehicle. This endorsement may not be available on all vehicles.

What is a SEF 44?

When the insured cannot fully recover his damages for bodily injury or death, this standard endorsement (change) form covers the difference between the value of the insured’s claims and the third party’s limit of insurance. When a third party is at fault, it covers the shortfall when the third party is inadequately insured to cover the insured’s claims or when the third party is uninsured.

Is one million liability enough insurance or should I carry two million?

The world is becoming more prone to lawsuits than it used to be. And lawsuits are reaching higher dollar values than seen in the past where just the cost to defend these lawsuits could easily exceed one million dollars. With companies working in the oilfield, many of their contracts require a minimum of $5,000,000 liability. The price to increase your liability policy is inexpensive compared to the coverage it will provide at the time of a loss.

If I need a liability certificate, what are they asking for?

A liability certificate provides confirmation of the liability limits you or your business has in force at that time.

If I stop paying for my insurance is it automatically cancelled?

No. As an insurance policy is a legal contract, we are required to get signatures and/or the return of policy documentation in order to cancel the contract, especially mid-term. So, you should contact your insurance broker in all circumstances where a policy is to be cancelled at any time during the policy term or when it’s time for renewal. If you do stop making payments for your insurance, your policy will be cancelled for non-payment by registered letter by the insurance company, and this will adversely affect your ability to obtain insurance in the future.

Personal Insurance Questions

What are the benefits of having all my personal insurance go through one company?

While we will always compare insurers and packages to ensure that you have the best combination of price and coverage for your individual needs, often it is beneficial to have your entire portfolio with one insurer. Most insurers offer additional discounting, for example, for combining home and auto coverage together with one provider. Also, the size of your portfolio and the length of time it has been with one insurer can give you more leverage with that insurer when special consideration may be required for premium rating, unusual coverage circumstances, or claim situations.

What documents do I need to get my car insured?

You will need to provide the serial number for the vehicle (bill of sale would be helpful), any lien/lease information on the unit, the drivers license(s) for any relevant drivers, an insurance claims history letter from your prior insurer if the vehicle is from out of province, and a drivers abstract. If you are planning to utilize a payment plan, then banking information and a down payment will be required. Finally, if the vehicle is over 12 years of age, we will require a vehicle inspection report.

If I let my insurance company know about a very minor claim, will my rates go up?

The first point to be considered in this situation is this: if the claim is “very minor,” should you report it at all? Insurance serves as your safeguard against major financial loss in the event of a sudden, accidental, and unforeseen event. Therefore, if the damage to your vehicle, or that of a third party, is “very minor,” consideration should be given to paying for it yourself without reporting the claim to the insurer. As most at-fault accidents will incur a deductible before monies are paid, the more minor the damage, the less sense it makes to submit a claim. The actual amount of a rate increase will depend on your driving record and previous claims history, but, in most cases, rates will increase if you submit a claim. However, with most insurers, your first accident may be either forgiven or the effect of it on your rating may be lessened. After that though, first-accident rates will increase with each subsequent claim. Don’t waste this opportunity on a minor claim!

Why does a driver need to be added to an automobile policy?

There are a number of reasons why we add drivers to a policy. The SPF 1 (Standard Policy Form) contains coverage provisions for insured person(s). It is important to ascertain that they benefit from coverage in the event of an injury or damages. As a legal contract, statutory conditions dictate rules pertaining to use and operation that need to be complied with regarding any changes involving use and operation of the insured vehicle. By listing a driver, his or her insurance history is initiated, which provides a key element in establishing rate. A driving history will allow the insurer the ability to screen persons having undesirable driver history (i.e. convictions, insurance claims/license experience).

Why do I need to tell you about anyone else in my household who may be licensed if they don’t drive my car?

The insuring agreements permit use of vehicle by persons not named. However, the auto application requests driving information on all licensed drivers in the household. Operators in the household will have access to the vehicle and the insurer has a right to be informed of any added exposure they may be subject to in underwriting the insurance policy whether the intent is for them to drive or not.

Will my car insurance automatically cover me if I drive someone else’s car?

If you have consent to operate someone else’s vehicle, then their insurance shall respond for damages you are held liable for as well as provisions available under Section B for injuries sustained.

If I have been involved in a small motor vehicle accident and the other party says they will pay for it, do I still need to make an insurance claim?

In most circumstances, you should still report the accident to your broker in order to protect yourself in the event that the small motor vehicle accident develops into something more major. For example, the third party may decide to change their story and try to place some of the fault on you, thereby implying responsibility for bodily injury not addressed at the time of the accident. Also, check with your local authorities for the guidelines regarding when you must report an accident to police, which would then require you to report it to your insurer.

Do I need to carry collision if my vehicle is more than five years old?

This is a matter of personal preference, based on your individual financial situation. If you feel that you could absorb any repair costs incurred to your vehicle in the event of an at-fault accident, then you may be able to do without collision coverage. Keep in mind, however, that without collision coverage in place in that situation, you may not be eligible for replacement vehicle coverage while your vehicle is being repaired. You should also consider that, in the event of a hit-and-run accident, if you do not carry collision, your insurer may not respond to repair your vehicle, even though the accident was not your fault.

Why is it that the items stolen from inside my vehicle do not get to be claimed with the auto? Why do I need to file a separate claim through my home policy?

Auto insurance is designed to respond to events directly related to an automobile and its normal operation (accidents, theft of the vehicle, vandalism, bodily injury, legal liability, etc.). Auto policies cannot take into consideration all the possible personal items that might be carried in your vehicle. Some drivers might only have a purse or a few CDs in their vehicle, while others might carry their luggage for a vacation, or their hockey equipment bag. If auto insurers contemplated all of these possibilities and rated accordingly, comprehensive rates (for fire, theft, vandalism, etc.) would skyrocket. Since property policies (homeowners, condo, tenant packages, etc.) are designed and rated for personal property, they are best suited to respond to these types of claims.

I have this SEF 20 thing on my policy. Does this mean it pays for me to rent a car?

Yes, but only in certain circumstances. The SEF 20 – ‘Loss of Use’ – standard endorsement form provides for reasonable expenses incurred for a rental vehicle or other transportation if the insured vehicle is not drivable due to loss or damage caused by an accident covered under Section C (Collision, Comprehensive, All Perils, or Specified Perils) of the policy. This means that if you are involved in a covered accident, your insurer will provide for you to rent a replacement vehicle of a similar type to the one being repaired, up to the limit declared on your policy, while your vehicle is being fixed.

Do I have insurance for a car rental? How does it work?

Whether you’re on vacation or just want to try out a convertible on a sunny day, rental vehicle agencies always try to sell you additional insurance coverage that you may already carry. If your policy shows that you have an SEF 27 – ‘Legal Liability for Damage to Non-Owned Auto’ standard endorsement form, you have coverage for legal liability or liability assumed under a written agreement (such as a rental contract) for damage to someone else’s vehicle, subject to the limit declared on your policy. However, read the contract carefully as some rental agencies are including other items that are waived when you decline to purchase insurance through them, such as their loss of rental income on a vehicle, which may not be covered, even by the SEF 27.

What is GRC on my home policy and why is getting a five-year RCT important?

GRC – Guaranteed Replacement Cost – provides the peace of mind in knowing that, in the event of a catastrophic loss, your home will be rebuilt to the same standard of construction, with materials of like kind and quality, regardless of the value declared on your policy, subject to the insurers’ terms and conditions. For most insurers, one of those conditions is that an evaluation of the home be done at least every five years (three years in some cases) to ensure that the most accurate information is available and that fluctuations in construction, design and labour costs are being considered. One of the methods for performing this evaluation is with Residential Component Technology (RCT) where a wealth of information about the home is input into a computer program that produces a Replacement Cost value, based on national and local data for rebuilding costs. The technology is often sophisticated enough to show differences right down to the postal code in which a residence is located. Keep in mind that replacement cost is different from market value (what you could sell your home for), property value (which includes land value that is not insurable), and the value you see on your tax assessment.

What is the insurance requirement to deem your home or property vacant?

“Vacancy,” by definition, refers to a dwelling in which there are no personal belongings and to which the insured party has no intention of returning for residence. Basically, the home is empty and you don’t intend to live there yourself again. This is different from “unoccupied,” which refers to a dwelling that still has personal property in it and to which you intend to return after a brief absence, such as a vacation. While an unoccupied home only requires that you take reasonable precautions to ensure the integrity and security of the home (these will differ from insurer to insurer), a vacant dwelling requires an endorsement (change) to the policy granting permission for the home to be vacant and, often, the completion of a questionnaire regarding the reasons for the vacancy, the anticipated duration and steps taken to have the home adequately looked after in your absence.

What is the difference between Water Damage and Sewer Backup coverage?

Simply put, water damage refers to the sudden and accidental escape of water or steam from plumbing, heating, sprinkler, or air conditioning systems, or, that comes in (suddenly and accidentally) through an opening created by an insured peril (i.e. a tree falls on the house and creates a hole in the roof through which water enters the home). With some exceptions, these losses are covered. One notable exclusion to water damage coverage is that coverage is NOT provided by the policy for damage caused by the backing up or escape of water from a sewer, sump, or septic tank system. This coverage, often called Sewer Backup, can be purchased at a reasonable premium to provide protection for your dwelling and contents in the event of a loss of this nature.

Why should any high-valued jewelery be scheduled?

All insurers place limitations on the amount they will pay out in the event of a claim for theft of or damage to jewelery – some as low as $3,000 total, per event, and subject to the policy deductible. For many people this is adequate coverage, but, if you have individual pieces of jewelery (or watches, furs, or fine arts, for example) that have a value greater than the special limit applied to these items, “scheduling” can be a valuable alternative. All we require to schedule these items is an appraisal of the piece by a qualified appraiser, providing a complete description and value for the piece. You then have the peace of mind in knowing that in the event of a total loss of a scheduled item, you will receive the declared value on the policy, and, in most cases, will pay no deductible. Additional premium is charged for each scheduled piece based on its value. Usually, a new appraisal is required every three years to ensure that a proper value is being insured.

What are acceptable levels of Third Party Liability?

While this is certainly a personal decision based on a wide variety of factors, most Albertans carry at least $1 million in third party liability – be it on their auto or property policies. Some of these factors for auto include: premium charged for higher limits; amount of driving done in a vehicle; the nature of the use of a vehicle; if, and how often a vehicle may be taken into the US; and, how the individual is perceived in their community (professionals, such as doctors, lawyers, sports and entertainment personalities, etc., will often carry higher limits of liability, as they are often more likely to be sued). On the property side, if you have more than one property, or, if you own rental properties, higher limits are often desirable, and can often be obtained for minimal additional premium.

How should I set up my deductibles (premium vs. self-insurance)?

Deductibles serve to reduce your annual premium by increasing the amount you will pay out of pocket in the event of a claim, thereby reducing the insurer’s exposure to loss. Basically, you need to look at how much you would be able to afford to pay yourself in the event of a claim. The standard property deductible is $500, but, by increasing it to $1,000, you could realize as much as a 20% savings, depending on your insurer. Higher levels are available that provide even greater savings. If your approach to insurance is that you would only ever submit a claim in a large loss situation, this option may be for you, as you can save a lot of premium dollars, with little effect on your actual insurance position. On the auto side, many of our clients will increase their collision deductible to $1,000 for the same reason – you can realize premium savings (especially on newer vehicles).

The company I work for wants me to list them as an Additional Insured. What does this mean?

They are asking to be protected under your Commercial General Liability in the event they also get named in an action as a result of the work you are performing on their behalf. It does not provide coverage for any work/services that they perform or give them rights to make changes to your policy. This is a common request, and your broker will provide you with a Certificate of Insurance as evidence of their interest.