The Insider - March 2009

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In March 2009's Insider, you'll find "¦


Welcome to the March 2009 edition of's Insider newsletter.

One of the best things about insurance is the peace of mind it affords you. From auto to life to home insurance, knowing that you've got a back-up plan in place will help you feel prepared for whatever may come your way "¦ but when it comes to accessing your insurance, do you know what to do? For example, do you know what to do if your car gets hit in a parking lot? Or if your child's caretaker gets hurt in your home? And what about life insurance? Can you answer these three questions?

In this instalment of the Insider, we'll look at what to do - and what not to do - in three typical car insurance situations. We'll also cover the basics of life insurance. Plus, you can take our home insurance quiz to see just how much you know about what home insurance does - and does not - cover.

Just remember that regardless of the situation, can help by finding you the lowest rate available from over 30 competing insurers and connecting you with our network of licensed insurance professionals.

Just read on for all the details "¦

Car collisions - what you need to know

No matter how cautious you are, there's always a chance that you may find yourself in a car accident. Your fault or not, the key is to know how to handle the situation. In this article, we look at three common car insurance situations and how to deal with them properly "¦

Parking lot bang-up

You're leaving the store, pulling your car keys from your purse, when you look up to see another car has just hit your parked vehicle. The driver's stuck around, but now what?

First things first: make sure that the driver isn't hurt and call 911 if he or she needs medical attention. You're not at fault, so the incident won't affect your insurance rates if you make a claim. You'll want to exchange insurance information with the driver and contact your insurance broker/agent immediately.

If there's an injury or the damage to the vehicle appears to be over $1,000, then you must call police to the scene. If the damage appears to be under $1,000, then you must report to a collision centre within 24 hours. Since you are not at fault, you won't have to pay the deductible if there are damages sustained to your vehicle.

Tip: Always report a loss or damage, as some insurance companies will hold you at fault if you do not provide them with police documentation within 24 hours of the accident.

Always have your pink liability slip, also known as your insurance card (which you legally must keep in your vehicle by law; you can be charged otherwise), car ownership, a pen and a cell phone in hand whenever you are using your vehicle to help make the process easier.

Classic car collision

It's rush-hour traffic and you're busy trying to calm your kids down in the back seat when you feel a hard bang - you've just bumped into the car in front of you, hard. The driver is stepping out of his car, and he looks angry "¦

The most important thing to do is stay calm. Don't allow the other person to incite you into an argument or physical confrontation. Instead, contact your local police services and wait on the scene. (Again, note that if damages are over $1,000 or there is an injury you must contact the police immediately, as noted previously.)

If possible, move your car out of the way of traffic; if not, put on your hazard lights. When the police show up, follow their instructions and contact your insurance company, broker or agent as soon as possible to report the incident. Also exchange your name, address, phone number, driver's license number, vehicle information, license plate, and insurance company and policy number with the other driver.

You'll also want to take notes about the accident, paying attention to damages on both vehicles. If possible, take photos. Do not discuss or admit fault. Determining fault should be left up to your insurance company and the police investigation. Also, be sure not to sign any documents, unless they are from your insurance provider or the police.

Pedestrian run-in

You're at a four-way stop, it's your turn to go, when all of a sudden a jogger seemingly comes out of nowhere and collides with the front of your car, falling on the pavement. You can feel pure panic rising up ...

This is a frightening situation, but one you have to deal with in a calm, proactive manner. Get out of your car and see if the pedestrian needs medical attention. Call 911 immediately and stay on the scene. When the emergency crew and police show up, cooperate fully. Call your insurance agent/broker right away.

If your insurance provider finds that you are not at fault, then your policy and rates will remain unaffected. If you're found to be at fault for the accident, however, your car insurance will cover you to the "Ëœpoint of threshold;' this is usually a minimum of $500,000 with most policies (although today many policy holders opt for $1 million to $2 million thresholds), which will cover the medical costs for the victim. However, know that if the victim's medical costs exceed your policy's point of threshold, he or she can sue you for any additional costs.

Also, to make the situation worse, your insurance provider may file a rule with a regulatory body stating that they won't renew your policy (either at the end of your term or giving 60 days' notice). Plus, finding a new provider will be extremely difficult if there's an open claim to accident benefits being paid out in your case. The lesson? Drive carefully and always respect pedestrians.

Life insurance Q & A

Should I buy life insurance on my mortgage or a life insurance policy?

The first step is to contact a licensed insurance broker and compare rates from different insurance companies. He or she can help you choose the right option, but know there's a difference between the two.

When buying insurance on your mortgage, for example, the amount of insurance you can purchase will be dependant on the amount of your mortgage's principal (let's say $300,000). You will pay a premium based on that amount. As time passes, the amount you owe on your mortgage will naturally decrease, as will your amount of insurance (you'll have less coverage when you owe only $100,000 on your mortgage).

In some cases, however, you'll still pay a premium based on the original amount and you'll receive less coverage. Your lender may require you to get either mortgage insurance or life insurance for the principal amount.

When buying a life insurance policy, it will typically be based on a set amount that doesn't change (so it will remain at $300,000, for example, and won't decrease over time). You'll also pay a premium on the full amount.

I had a heart attack and am now rethinking the people I've named as beneficiaries on my policy. Can I change the beneficiaries?

The choice of whom you want to name as your beneficiaries is entirely up to you, and you can change them at any time for whatever reason you choose. Some of the common life changes that often cause people to review their beneficiaries include marriage, divorce, children, and the death of family or friends.

You can name people, organizations or your estate. Just note that the original beneficiaries under your policy, as well as any changes you make, will have to be designated in writing to your insurance company and added to your policy via your official endorsement.

My father just passed away and I'm his only beneficiary - now what?

The key is to be proactive before a parent passes on - figure out and document everything beforehand. If you're a beneficiary on a parent's insurance policy, ask for details. Find out how the policy works, who exactly is paying the premiums, where you can access a hardcopy of the policy, how to access it when the need arises and what you'll need to take care of on your part.

It's not an easy conversation to have, but discussing the future with your father will help make the process a lot less frustrating and difficult down the road. This way, when you are in the situation, you'll know what to do and what to expect when it comes to your parent's policy.

Home insurance quiz

Knowing what your home insurance policy does - and does not - cover can make a world of difference in terms of how you'll end up dealing with a potentially difficult situation. So go ahead and test your knowledge by taking our quick and easy quiz "¦

1. Your child's babysitter fell down a flight of stairs left cluttered with books and toys, and has broken her leg. So now "¦

A. She has a right to sue you for negligence and endangerment.B. She can't sue you, but you are responsible for her health costs.

C. Any negligence on your part will be covered by your insurance company.

2. You left the water running and your bathtub overflowed - a lot, as in you flooded the condo unit below yours, causing damage to your neighbour's property. Your policy "¦

A. Only takes care of damage to your property, not your neighbour's

B. Covers damage done to your property as well as subsequent additional damage to your neighbour's property.

C. Does not cover any of the damages.

3. A burglar broke into your home and stole your grandmother's old photo albums, which were of great sentimental value to you.

A. Unless you've had them appraised and insured, your home policy will only cover their real-value cost.B. Your insurance company makes exceptions for items of sentimental value and will pay out more for them.C. Because they are old albums, your policy won't cover them at all.

4. An airplane fell from the sky on your home, completely obliterating it. Your home policy "¦

A. Won't cover a freak incident like this.B. While not every incident of "Ëœimpact by flying objects' is covered by home policies, some do, so you may be covered.C. Your home insurance policy will automatically cover this.

5. Your dog attacked a visitor while on your property. Your policy "¦

A. Covers this under the "Ëœscienter' (or admission of fault) clause. Even if the incident was caused by negligence on your part, or you didn't post signs and allowed it to happen, you're still protected.B. If you didn't post any dog signs, you're responsible and your policy won't cover it.C. Any incident of dog attacks aren't covered by homeowner policies.

6. You're doing some painting and plastering work on your home. It's strictly cosmetic. You should inform your insurance company because "¦

A. Even if it's cosmetic, the work will affect your insurance policy.B. Don't bother - it's only cosmetic.C. The work may increase the value of your home, so your may need to reassess my home policy.


1. C: All standard home policies cover negligence. Your insurance company may cover her medical costs, if noted in your policy.

2. B: Your policy covers both the damage to your property and the subsequent damage to your neighbour's property, as this is a standard clause.

3. A: You should always have special items valuated by an appraisal company and have them specially insured.

4. B: Check with your policy to see if an incident of "Ëœimpact by flying objects' is covered; some, but not all, do offer full coverage for this.

5. A: Most policies cover this, but do check yours, as most home policies don't cover exotic animals.

6. C: Even though the changes are cosmetic, they may increase the value of your home, so you may want to reassess the amount your home is insured for (say from $300,000 to $305,000). If you are doing major renovations (electrical, foundation, total kitchen remake, etc.) then you should definitely contact your insurance company.

Quote Unquote

Q) Will a ticket that I received while riding my motorcycle affect my car insurance? A) Yes. Your driving record is your driving record. When an insurance company orders your driving abstract from the Ministry of Transportation, all of your tickets are displayed, regardless of whether the ticket was received while driving a car or riding a motorcycle.

An impaired driving conviction is applied to your driving record even if you received it while operating a motorized watercraft such as a jet ski or a non-motorized boat such as a canoe, kayak or inflatable raft.

Tip: Parking tickets don't affect your driving record.

Have a question you'd like answered? Please send us an email at [email protected].

Check back every month for new Quote Unquote questions and answers about insurance from readers just like you.

Did you know?

Do you know what an OPCF is, specifically an OPCF 20? The Insider's new Did you know? feature has the answer "¦

  • OPCF stands for Ontario Policy Change Form.
  • An OPCF includes special agreements that allow you to change, add or reduce the amount of insurance coverage for certain situations on your Ontario Auto policy.
  • An OPCF 20 is the Loss of Vehicle Use Form.
  • An OPCF 20 will cover the cost of a rental vehicle while your vehicle is being repaired or replaced (if the damage or loss is caused by a peril for which you are insured).
  • In order to purchase an OPCF 20, you must have collision and/or comprehensive on your auto policy.
  • Pricing for an OPCF 20 typically ranges anywhere from between $20 to $30 for the entire term of the policy.