Frequently Asked Questions About Insurance in Ottawa and Nepean

Auto Insurance

How can I lower my insurance cost?

To lower your premium, ask us about any of the following options:

  • Increasing your deductible (i.e., your share of the cost of a claim). By increasing the amount you are willing to pay, you will decrease your premium
  • Dropping collision coverage on an older car
  • Bundling your car and home insurance
  • Buying a car with a lower-cost insurance rating

Is my car covered if someone else is driving it?

Yes, provided the person who is driving it is:

  • Legally entitled by law to operate a motor vehicle,
  • Is using it with your permission,
  • Has not committed an offence under the Criminal Code of Canada while operating your vehicle, and
  • Has not contravened the prohibited uses clause as outlined in your policy (such as racing).

What is a deductible?

A deductible is the portion you are responsible for paying in the event of a claim. For example, if your car insurance policy has a $1,000 deductible for collision and there is $5,000 in damages, you will pay the first $1,000 and the insurance company will pay the remaining $4,000.

How is fault determined in an accident?

In Ontario, fault is determined according to Fault Determination Rules which are part of the Insurance Act. Fault Determination Rules outline different accident scenarios. Fault and degree of fault is allocated to each driver based on which scenario most closely fits the accident.

Once you have reported the circumstances of an accident to your insurance adjuster, he or she will speak to the adjuster representing the other party and agree on the fault allocation. Extenuating circumstances, such as slippery road conditions, don't enter into the decision.

In other provinces, fault may be determined by settlement charts or fault may be determined based on common law and the existing rules of the road.

Homeowners Insurance

What does home insurance cover? Why do I need it?

Home insurance provides protection against loss or damage to your home and personal belongings. It also helps protect your financial assets against financial loss in the event of a lawsuit against you. For example, if someone is injured in your home, your home insurance (which includes liability protection) will provide you with legal defence in the event of legal action brought against you. There are exclusions and limitations that may eliminate or restrict coverage provided by your policy.

Home insurance is often necessary to secure mortgage financing - your bank will want to ensure they will be reimbursed in the event of loss or damage to the property. Even if you don't have a mortgage, home insurance ensures that your assets are protected from loss. For example, if you don't carry insurance and your home is destroyed by fire, most people can't afford to rebuild their home.

How much insurance do I need?

Your broker will help you determine the amount of home insurance that's right to protect your home and personal belongings. The replacement value (this is the cost to rebuild your home, not the market value) of your house and the value of your personal property will be key to determining your insurance needs. Your broker will also assist you in selecting the type of coverage and deductible (the amount you are responsible for paying before we will begin to pay for a loss or damage) best suited to you.

What is replacement cost?

Replacement cost is the total cost that your insurance company would pay to fully reconstruct your home if it were destroyed. Replacement costs include things that may not be included in the resale value, like the cost and availability of skilled labour, debris removal, extra expense due to more stringent building codes, and more. If you made upgrades or did renovations, talk to your broker to make sure you have the right coverage.

Should I make a claim with every loss?

This is a very personal decision. Before making a home insurance claim, you should consider the cost of the damage compared to your deductible. The deductible is the initial amount of a claim that you've agreed to pay.

If the difference is negligible, you may choose not to make a claim as it may mean losing your "no-claim discount" which would result in a premium increase. In determining the rates an insurance company charges, consideration is given to the claims in the last five years. Your broker can help you in making your decision.

Commercial Insurance

What is business insurance?

Business insurance is not a single type of insurance coverage – it’s different insurance policies tailored for businesses based on their exposures to risk.

Do I need specialized insurance coverage?

Every business has unique risks. A business insurance broker with experience in your industry can determine whether or not your business risks justify specialized insurance coverage (for example crime, professional liability or sewer back-up).

Why is my insurance premium increasing?

Business insurance premiums may increase for a number of reasons. Increased property values or increased sales will cause a premium increase because the exposure to loss has increased. General Liability and Professional Liability premiums reflect your business’s sales. As sales increase, premiums typically increase even if rates stay the same.

If I buy business insurance, will it prevent lawsuits?

No—nothing can prevent your business from being sued. Good business practices reduce the probability of a lawsuit but a person or organization can sue your business for almost anything – frivolous or justified. Your business insurance coverage can help you pay to defend allegations or actions against your business.

Life Insurance

How much life insurance should an individual own?
Rough "rules of thumb" suggest an amount of life insurance equal to 6 to 8 times annual earnings. However, many factors should be taken into account in determining a more precise estimate of the amount of life insurance needed.

Important factors include:

  • Income sources (and amounts) other than salary/earnings
  • Whether or not the individual is married and, if so, what is the spouse's earning capacity
  • The number of individuals who are financially dependent on the insured
  • The amount of death benefits payable from CPP and from an employer sponsored life insurance plan
  • Whether any special life insurance needs exist (e.g., mortgage repayment, education fund, estate planning need), etc.

It is recommended that a person's insurance advisor be contacted for a precise calculation of how much life insurance is needed.

What about purchasing life insurance on a spouse and on children?

In certain circumstances, it may be advisable to purchase life insurance on children. Generally, however, such purchases should not be made in lieu of purchasing appropriate amounts of life insurance on the family breadwinner(s). It is of utmost importance that the income earning capacity of the primary breadwinner be fully protected, if possible, through the purchase of the required amount of life insurance before contemplating the purchase of life insurance on children or on a non-wage earning spouse. In a dual-earning household, it is important to protect the income earning capacity of both spouses. Life insurance on a non-wage earning spouse is often recommended for the purpose of paying for household services lost at this individual's death.

Should term insurance or whole life insurance be purchased?

Although a difficult question—one whose answer will vary depending on circumstances—several principles should be followed in addressing this issue.

It must first be recognized that in any life insurance purchasing decision, there are at least two basic questions that must be answered:

"How much life insurance should I buy?"


"What type of life insurance policy should I buy?"

The first question involves an "insurance" decision and the second question requires a "financial" decision.

The "insurance" question should always be resolved first. For example, the amount of life insurance that you need may be so large that the only way in which this needed amount of insurance can be afforded is through the purchase of term insurance with its lower premium.

If your ability (and willingness) to pay life insurance premiums is such that you can afford the desired amount of life insurance under either type of policy, it is then appropriate to consider the "financial" decision—which type of policy to buy. Important factors affecting the "financial" decision include your income tax bracket, whether the need for life insurance is short-term or long-term (e.g., 20 years or longer) and the rate of return on alternative investments possessing similar risk.

How does mortgage protection term insurance differ from other types of term life insurance?

The face amount under mortgage protection term insurance decreases over time, consistent with the projected annual decreases in the outstanding balance of a mortgage loan. Mortgage protection policies are generally available to cover a range of mortgage repayment periods, such as 15, 20, 25 or 30 years. Although the face amount decreases over time, the premium is usually level in amount. Further, the premium payment period often is shorter than the maximum period of insurance coverage. For example, a 20-year mortgage protection policy might require that level premiums be paid over the first 17 years.

Can an existing life insurance policy be used to provide for the repayment of an outstanding mortgage loan?

Yes; the purchase of a new mortgage protection term insurance policy is usually not required by the lender. An existing policy, either term or cash-value life insurance, can be used for many purposes, including paying off an outstanding mortgage loan balance in the event of the insured's death.

Credit life insurance is frequently recommended in conjunction with the taking out of an installment loan when purchasing expensive appliances or a new car, or for debt consolidation. Is credit life insurance a good buy?

Credit life insurance is frequently more expensive than traditional term life insurance. Further, if you already own a sufficient amount of life insurance to cover your financial needs, including debt repayment, the purchase of credit life insurance is normally not advisable due to its relatively high cost.

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