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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, and new underwrit…

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 should I get…

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 commonly held b…

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 determining covera…

Meet Our New Helper!

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Pictured here is Bella. She is a Chocolate Lab, and working in the office is one of her favorite things to do. As a scent hound, she specializes in “sniffing out” good risks, and kissing visitors to the office.
Bella started her career in insurance back in 2012 as an Office Greeter, in our Client Care Department. Those were exciting times, as there was so much to learn. And as a young dog, she was a quick study with lofty aspirations of one day owning and running her own insurance brokerage. Over time, she began to see the time commitment required to place and service insurance policies, so she decided to stay in her current role as Office Greeter.
Stop by the office and meet Bella. She works most afternoons. She is very friendly, and she looks forward to working with you personally.

What To Expect When You Least Expect It

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Here’s a scenario for you: You drive a 10 year-old car, planning to one day replace it. Whenever it breaks down, and it seems to break down a LOT these past few years, you question the logic in putting yet more money into a car that really isn’t worth much. But you love your car, and you haven’t had a payment on it in five years, and maybe the six thousand dollars that it has cost you in the last four years isn’t so bad.
Until one day, out of nowhere, some jerk runs a red light and broad sides you. Your car is wrecked, and now you have to make an insurance claim.
The good news is that the accident is NOT your fault, so your rates won’t be going up.
Here’s where things can get confusing. If the cost to repair your car exceeds the value of it, the insurance company will write the car off. So for only $3500 you can get your car back in tip-top shape, but the vehicle is only worth $2500. At this point, the insurance company is obliged, under the terms of the contract, to only give you $2500…