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Why You Can’t Wait “But I can’t afford life insurance…” These are words that we hear often in the business we’re in. Folks just can’t seem to see their way clear to spend a few dollars every month to protect their loved ones. But I wonder just how expensive life insurance is when compared to the alternative. Let’s talk, shall we? “But my kids will look after my burial when I’m gone.” Statistically, we all die eventually. Insurance of any type isn’t about insuring the inevitable, it’s about insuring against the unexpected. If we knew exactly when the house fire would happen, we could strategically save for that inevitability, so that the day after it happens, we’re financially prepared for it. Or better still, we could avoid the whole experience by NOT lighting the candle in the first place. As for life insurance, if we knew the date of our death, we could simply save for it. Our children would then be financially ready for the big day. Here’s the thing: we rarely peris
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Well, That Was Unexpected… In the wee hours of November 1, 2019, a huge storm ripped across Southern Ontario, causing over $50 million worth of damage in its wake. We’ve had big storms in this area before, but this storm was different. Typically, in the insurance industry, we have a few types of storms. We have the   regular ones, where you might see a few older roofs sustain damage, maybe some siding damage, perhaps a few basement floods. Those storms are easy enough to plan for. Heck, often insurance companies don’t have to raise everyone’s rates to recover from those losses. Then there are what we term “catastrophic weather events.” Those are the storms that cause significant damage in a concentrated geographic area, and the number of claims exceeds a threshold. For example, if an insurance company were to experience 500 claims from a single storm in the Region of Niagara, they might term that as a “catastrophic weather event.” Until recently, those were the storms
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Breezy Indeed...

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The 23 rd and 24 th of February in South Niagara will be a time that is looked back upon with something less than fondness. Heck, the whole of Ontario enjoyed some pretty windy weather those few days! People all over the province experienced damaging winds, fallen trees, and flying object damage. It is already being referenced as a significant weather catastrophe by the insurance industry. We have seen enormous numbers of claims, and millions of dollars in damage. So what happens after the roof blows off? The first thing that needs to be done is to report the claim to the insurance company. As an option, you can always report your loss to your broker and get any free advice on offer from them. When you report to the company directly, you’ll want to have your insurance policy number as well as your effective date, as the Claims Representative will need that information to set up the claim in their system. Once the claim is reported, the real work starts. You should next r
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How Hard is a Hard Market?

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Overheard at the grocery checkout recently: “I guess all the insurance companies are raising their rates. I heard it on the news.” It’s a true story. Rates are up all over the place. If you wondered about this and called your insurance provider to inquire, you may have heard that we are in what is called a “Hard Market.” It’s called a Hard Market because it’s hard as heck to get a lower rate. Last year was a tough one for the insurance industry in Canada. That whole Climate Change thing is doing a number on actuarial data. It used to be that insurance companies’ actuaries could determine with a bit of certainty, just how bad the damage from that storm or flood or wildfire would be. But with climate change effects, there are more storms, more floods and more wildfires, and there’s no telling how bad it will be until it’s too late. So, all the insurance companies lost gobs of money last year. Those losses obliterated loss reserves, and made it so that rates had to go up, an
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Giraffes and Hospital Bills

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You’re driving to work some Monday morning, when out of nowhere a giraffe runs in front of your car. You swerve to miss it, and land your car in a tree. The car is destroyed, and you have sustained significant injuries. You have Collision coverage on your pride and joy, so you know that the insurance company will repair the damage. But what about the damages to you? In Ontario, all automobile insurance policies have coverage built in to put you back together. Under the heading “Accident Benefits” are the specific coverages to look after your expenses for medical costs, like prescription drugs, physio therapy, and so on; as well as benefits to replace the earnings you lost when you parked your car in that maple tree. We get a lot of questions around the Income Replacement coverage. The Standard Accident Benefits coverage limits in your policy allows for up to $400 per week of income replacement, with the option available to purchase up to $1000 per week of benefit. “How much
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Co-Insurance: One of the Trickiest Concepts in Commercial Insurance

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If you own a business, you know how important insurance is. When you look at your business insurance Declarations Page, do you fully understand what each line item on it means? Don’t worry too much, few people actually do. But there are a few lines that you must understand, as your business depends on it. In this article, I want to focus on the “Coverage A – Building” and “Business Personal Property” lines, and more specifically the dreaded Co-Insurance requirement . To understand the concept of Co-Insurance, first we must look at the whole reason we purchase insurance. We purchase insurance to help us recover from the unexpected, and by unexpected, we’re talking about the absolute worst thing that could happen. What if a fire tore through your business location, leaving only the charred remains of your favorite pen? Or maybe it’s a flood of 12 feet of sewer water that turns your sales counter into a raft? I know, I know, those things would probably NEVER happen. That’s a com
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The Thing That Caused The Thing

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Back in August of 2005, Hurricane Katrina hit the southern coast of the United States, making landfall on Florida and Louisiana. It was a Category 5, and it made a terrible mess of the city of New Orleans especially, causing billions of dollars in damage. In the months that followed, I was inundated with questions from my clients about the aftermath. You see, on the news there were plenty of images of good folks holding up signs. Some signs had messages like, “Thank you (Insurance Company Name)!” And some signs were less friendly, because those individuals were denied coverage. These various images triggered questions about why some were covered and some were not. To answer these questions, we need to consider the legal concept of Proximate Cause… Each insurance policy has a list of insured perils, essentially those crappy things that can happen to your stuff that would be covered by the contract. Some of those perils include Fire, Theft, Lightning, and so on. But when det
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