52 years ago ·
Make a resolution to review your insurance policies and coverage!
Has Covid changed your habits?
Many people significantly changed their lifestyle this year and these changes should be reviewed with your broker.
- For example, many people have had their driving habits go from what at first thought of as on a “temporary basis” to a more permanent basis moving forward. Some no longer use their autos to commute at all.
- You may now have a permanent office at home and may now have clients coming to visit you at the house.
- Do you have business contents and equipment at home that may need to be properly insured?
An updated review with your broker can make certain that any new arrangements are properly updated and noted with their insurer to avoid any potential surprises down the line.
- Update Your Home Inventory
Part of your renters or homeowners insurance is designed to cover your personal possessions if you face a covered loss — but only up to your policy limits. That’s why it’s important to maintain a current record of all your belongings. Did you receive some expensive gifts this year, such as jewelry or art? Or maybe you finally invested in that big-screen TV. Now is the perfect time to reassess all your belongings and update your home inventory so your coverage limits meet your needs. Most basic home insurance policies have standard limits for big-ticket items like electronics, art, jewelry or sporting equipment. You may need special coverage, so call your broker to discuss changes for your policy.
- Evaluate Your Homeowners Insurance
Maybe your resolution last year was to renovate your kitchen, or perhaps you finally finished your basement. A finished basement may not only increase the cost to rebuild your home, but it may also require additional coverage to protect items from water damage. Hot tubs, swimming pools, trampolines — all fun additions to make, but additional liability also comes with the territory. All of these updates would affect how much your home is worth, so check in with your broker to see if you should increase your coverages.
- Consider Umbrella Insurance
Think of umbrella insurance as an extra layer of protection for your home, auto and other primary liability coverages. An umbrella policy offers coverage for those unexpected instances where your primary coverage exceeds its limit. You might consider a personal liability umbrella policy if you:
- Drive a car or participate in carpools
- Have dogs
- Own or use a boat, ATV, snowmobile or other recreational vehicle
- Have a swimming pool or trampoline
- Own a rental property
- Coach youth sport teams
- Does your policy provide enough coverage for landscaping or outdoor appliances?
Installing a new sprinkler system, a larger storage shed, a new pool or hot tub, or buying a substantial backyard grill or riding mower are outdoor changes that may require a homeowner’s policy upgrade. Updating landscaping and purchasing new lawn equipment or outbuildings can be significant investments that should prompt a coverage review.
- Do you qualify for discounts?
An annual insurance review can also be an important opportunity to ensure you are receiving all possible discounts on your homeowners policy. For example, you may qualify for a discount if you have installed a security system, a smoke alarm or a hail-resistant roof. Additional discounts may apply if you insure both your car and home with the same insurer, if you don’t have any claims, or if no one in your household is a smoker.
Have you had any changes to your driving habits? If so, let us know to ensure your auto policy will cover you in case of an accident. Also take some time to check your auto insurance policy by following the guidelines below:
- Are my auto insurance coverage limits enough?
One of the biggest mistakes someone can make when it comes to car insurance is being underinsured. Liability is the part of the policy that pays for any injury or damage if you cause an accident. If your liability insurance is too low, it is possible that you could be sued for any damages above your liability limits.
- Am I covered if a driver hits me and they don’t have car insurance?
Look for uninsured motorist coverage on your policy or coverage summary. This type of coverage helps protect you financially in the event you’re in an accident caused by a driver who doesn’t have car insurance. It’ll even protect you if you’re the victim of a hit-and-run or if you’re hit as a pedestrian.
- Review your deductibles for comprehensive and collision coverage.
This is the amount you will pay if your car is damaged or totaled without fault of another driver. Raising or lowering this amount can affect your premium.
An annual insurance review is something that can go a long way to protecting what is likely your biggest investment. We can help make sure this is a New Year’s resolution you actually cross off your list.
52 years ago ·
Have ever asked yourself “Why are my insurance rates going up even if I haven’t made a claim?”
We’ve teamed up with the Broady Windsor Group to help explain.
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What is insurance?
Insurance is simply a pooling if funds, made available to the contributors of that fund, should they ever need. In a nutshell, we throw our premium into a pot. Now, there are, of course, rules to claiming. If you claim you are a homeowner, yet you have a hydraulic lift in your garage and do mechanics on the side, you are going to have a problem. True story.
Insurance, by definition, is really the business of risk. The industry is very comfortable with volatility, obviously, but the game really is pricing for risk.
Think about the price your son pays for his auto policy vs the price your daughter would pay if all of the variables are the same. Same car, same age, same driving history. Your son is going to pay more. The probability of him having a claim vs she is greater. Thus the pricing for risk.
So, this concept of risk is broken down into pools. For instance:
- Commercial business is a pool of risk
- Fire is a pool of risk
- Climate is a pool of risk
- Cyber is a pool of risk
- Inflation and liability are huge pools of risk
The trick is to price each pool accordingly. In some instances, despite all effort, the pool cannot be priced. Capital cannot be deployed where the probability of loss is excessively high, such as an annual flood.
Your insurance company goes out and purchases reinsurance from a re-insurer. In this way, there is a pooling of the risk on the insurer side thus no single insurer, just like no single homeowner, gets stuck holding the bag in the event of a catastrophic loss. (As an aside, in Canada we have very rigorous regulation and the property and causality market is very strong).
The insurance industry’s number one challenge, globally, is the changing pattern of climate or weather.
The flux that we are seeing in the global market reminds me very much of the flux which followed the tragedy of 9/11. Underwriters and actuaries across the plant were faced with the question, how do we underwrite, price the risk, of something we could never imagine? Australia? The melting ice cap?
A similar situation is upon us. How do we underwrite a once in a hundred-year occurrence, which happened twice in three years? Considerable resources are being deployed into trying to figure out how to manage the risk of water. We hear much of wild fires, wind, snow and drought. All of this has rocked the foundations and the bottom line, which, of course trickles down to all we purchasers.
What we know, is the frequency and severity of weather-related catastrophes have increased by a factor of 4 or 5 over the last 30 years. Think about that for a second. 20 years ago there was one water related coverage to purchase should you be inclined, it was called sewer back up coverage. $25 bought you $25,000 of coverage in the event that a sewer backed up.
Today, we often see the price of water related coverages greater than the price to insure your home should it burn down. Back to pricing and risk.
Let’s take a quick look at some of the catastrophic events, insured damage from flood, rain, snow and wind as per the insurance bureau of Canada.
In 2019 the cat losses totaled 1.3 billion dollars. As with 2018, which saw cat losses at 1.9 billion, there was no single event in 2019, yet a host of smaller, severe events coat to coast.
- $250 million on Halloween 2019 hitting Quebec and Ontario ( who remembers the ‘let’s cancel Halloween idea?’). Montreal and Niagara’s were hardest hit in terms of wind and water.
- $208 million in flooding damage in Quebec and New Brunswick During April and May as high water levels on the Ottawa and St. John rivers breeched. As an aside, 6000 homes were effected in Quebec.
- $181 million during 2 hail storms in western Canada during July and August.
- $114 million during 2 winter storms in the GTA and eastern Canada.
- $105 million resulting from hurricane Dorian in Atlantic Canada which saw 155km/ hour winds in Halifax.
And these are just the losses which cracked the $100 million line. There were a host of events. We won’t even go to the Fort McMurry fire of 2016, the costliest disaster in Canadian history at $10 billion.
And these are only the Canadian events, globally the insured losses from catastrophes reached $86US BILLION IN 2018 and $53US BILLION LAST YEAR…so yeah, pooling makes sense and allows local markets to provide the ‘availability ‘at a reasonable cost.
Who do you think is paying for this? Back to the pooling of funds designed to pay claims.
As the pool required to pay for these events continues to increase, thereby does your insurance rates.
52 years ago ·
Have you noticed your premiums/rates increasing? But why is that? You haven’t had a claim? You haven’t done anything differently since last year, but it still seems to be happening?
These changes are being driven by the new ‘hard market’, characterized by a high demand for coverage and a reduced supply, which the Canadian insurance industry has been moving towards since 2018.
We want to help you understand this subject. Eyton-Jones Assurance is in a unique position to help you navigate the challenges of a hard market. Our strong relationships with a wide variety of insurance providers gives you more choice when it comes to insurance products, and our brokers can help you find the best rates for your situation.
What is a ‘hard market’?
In the insurance industry, a ‘hard market’ is a time when insurers are paying out more in insurance claims than would be typical, forcing the industry as a whole to raise insurance rates. This is done to ensure they can stay profitable in order to support clients and payout claims going forward. It may also lead to restricted coverage on select policies and more stringent underwriting practices.
The following are some of the factors driving the market and causing the shift into a “hard market”:
- Increased frequency and severity of weather events such as floods, hurricanes, and earthquakes.
- Fraudulent claims – One study showed that almost $250 out of every driver’s auto insurance premiums was going towards paying for the illegal activity of fraudsters.
- Cost of Auto Repairs – Auto repairs are becoming more expensive, for both vehicle owners and insurers, due to the extent of technology installed in newer vehicles.
- High Housing Costs which typically leads to an increase in the size of the insurance claim when something is damaged.
- Distracted Driving – From 2016 to 2018, the number of distracted driving-related accidents across Canada increased by 23%
When this happens, Insurance Companies become choosier with what risks they take. A company that wrote motorcycles last year, may decide that they are no longer comfortable writing this class of risk the next. Where in 2018 we had 20 options, in 2019 there may only be 3 companies writing that business, and with only 3 competitors instead of 20, prices tend to increase.
It also means that risks that are renewed, will renew at higher premiums. When an Insurance Company writes policies for cheap, but then pays out for several claims, they need to recoup their losses in order to maintain afloat in order to continue to pay claims on the risks they remain on. As frustrating as this may seem, it is important so that they don’t go out of business, and clients don’t land up uninsured.
The good news is hard markets don’t tend to last as long as soft markets. While we enjoyed 10+ years of a soft market, the hard market is only expected to last a few years before companies are back to competing for your business.
How we can help in a ‘hard market’
As insurance brokers, Eyton-Jones Assurance is in a unique position to help customers navigate the challenges of a hard market. Here’s how we can help you:
We Offer You More Choice
Our team works hard to build relationships with different providers across the province, so we understand the unique benefits of each provider and the nuances of their various policies. With so many options to choose from, it becomes easier for us to match you with the policy that will provide the best value for your current situation.
We Ensure That You Are Getting The Best Rates
Insurance rates today are based on a larger number of variables than in the past, which means that information has become key. Remember that, as a broker, we work for you — not the insurance providers.
It’s important for you to keep us up to date on your situation – even a small change in your employment, your vehicle, or your living situation may lead to savings in insurance premiums.
If you want to ensure that you are getting the best insurance rates for your situation, talk to one of our brokers today.