Insurance

Its getting hotter….

Spring

Dare we say it? Is spring finally here to stay?

For many people spring is a time for working in the garden planting flowers, vegetables, and manicuring lawns. But did you know that those pretty flower baskets and pots you purchased from the garden center could actually increase the likelihood of an insurance claim occurring?

Many potted plants that are purchased from stores or garden centers contain little to no actual dirt, and contain other flammable materials such as peat moss, shredded wood or bark. Some potting soil mixtures may also contain fertilizers which can accelerate fires.

Over the last decade in Alberta, peat moss has contributed to a number of major residential fires. The careless disposal of smoker’s material in planters containing peat moss has totaled more than $26,000,000 in damages.

Here are some of the larger losses in recent history:

  • Calgary (March 2010) – Fire caused by cigarette left smoldering in a flower pot resulted in one of the largest condo fires in Calgary history. We insured this condo building and the damage to the structure was over $14 million. Approximately 250 were people displaced.
  • Edmonton (July 2014) – Fire caused by cigarette left in a flower pot. Over 400 people displaced.
  • Edmonton (May 2015) – Fire caused by carelessly disposing of cigarette in flower pot left 155 people displaced.
  • Calgary (July 2007) – Planter containing peat moss ignited spontaneously on the balcony of a third floor apartment. The resulting fire caused over $11 million in damage and displaced 100 people.

The majority of these devastating fire losses were started by cigarettes being put out in planters containing peat moss. That, combined with other factors such as proximity to dry plant matter, propane barbeques and wood siding or decking was a recipe for disaster. So what is it about peat moss that makes it so flammable?

Peat has a high carbon content and can burn under low moisture conditions. Once ignited by the presence of a heat source it smolders rather than bursting into flame and can burn down to the base of a container with no more evidence than a thin smoke plume and pungent odor. These smoldering fires burn undetected for very long periods of time.

So how do we prevent these fires?

  • Water potted plants regularly. Keeping the soil around your potted plants moist will greatly reduce the risk. Remember the soil in pots dries out quicker than garden beds so plan to water these more frequently
  • Consider using clay pots. If a fire does occur, a clay pot will contain the fire better than other pots.
  • Smokers should have a safe place to discard smoking material. Sounds pretty obvious but as the statistics above indicate, not everyone takes the time to think about where they are butting out.
  • Gardeners should keep planters well watered to reduce flammability, and remove dead plants to lessen the potential for a fire. Planters should not rest on or against flammable surfaces such as wooden decks or siding.
  • Stored peat moss should be protected from contact with heat sources.

Sources:

Simco Management / BFL https://www.simcomanagement.ca/condo-documents/insurance/services/download/14_2bc35211f6eb57410af54a4919d6ff92

CBC http://www.cbc.ca/news/canada/edmonton/peat-moss-sparking-flowerpot-fires-in-alberta-1.674941

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accident, adjuster, all perils, auto, automobile, car, claim, collision, comprehensive, coverage, crash, deductible, home, Insurance, payment, protection, vehicle

Replacement Cost vs. Actual Cash Value

RC vs ACVYou’ve probably heard the terms “replacement cost” and “actual cash value” at some point when discussing your insurance with your agent. Chances are you probably heard a bunch of terms while reviewing your coverage and wondered what does it all mean?   For today we are going to focus on these terms and how they relate to your coverage.

Actual Cash Value or “ACV” as it’s known in the industry is exactly what it sounds like… what the item is worth right now.  Insurers look at the initial cost of the item and then subtract depreciation for the number of years you had the item.  The depreciation applied can vary depending on the quality of the item, its current condition, age,  and what the life expectancy of the item is.

Replacement Cost means the amount of money it would take to replace damaged item with a new one of comparable material and quality used for the same purpose.  When shopping for insurance this is the coverage you ideally want to look for.  This coverage will get you closest to the living situation you had prior to the covered loss occurring.

When you suffer a claim the adjuster is going to request that you provide them with a full list of details including:

  • Description of the item(s) with make and model where applicable
  • Purchase date
  • Purchase price
  • Current replacement value
  • Receipt if available
  • Photos if available

Realistically you probably don’t keep the receipt for every item you have in your home. Even if you do there is a chance those receipts may have been lost in the claim.   So what can you do?  Well, keeping a photo log of the rooms in your home is a good start.  It will help the adjuster understand what items were in your home, and it also will help jog your memory as well.  Mike from our office has been through a fire and he can vouch for how hard it is to remember everything you had after a total loss.   Our smartphone app offers our clients the ability to store these photos in our office as part of their file.  That way the photos won’t also be lost in the claim and will help to expedite the claims process.

If your settlement is on Replacement Cost basis you can expect to receive two cheques from the insurance company.   The first cheque will be for the Actual Cash Value of the items that were damaged.  After you provide your adjuster with receipts for the replacement items you will be issued a second cheque for the difference between the Actual Cash Value and Replacement Cost.  This ensures you get Replacement Cost value for the items you do replace and the Actual Cash Value for the items you choose not to replace.

Some items just can’t be replaced. If the item is deemed obsolete or by inherent nature cannot be replaced, you may only be offered an Actual Cash Value settlement.   If you own items that are unique, or one of a kind, we encourage you to reach out to your agent to discuss if there are any additional coverage options available to you for these items. Some of these items may be insurable on a special floater where the items value is agreed on in advance of a loss occurring.

Actual Cash Value and Replacement Cost coverage are also used on  auto insurance policies. Here is an example of how it works on an automobile policy:

12 months after purchasing a brand new car for $40,000 you get in an accident. The damage is beyond repair and the vehicle is written off.

With Replacement Cost Coverage: Some insurers offer optional replacement cost coverage or a waiver of depreciation on brand new cars. With one of these endorsements on your policy you’d be able to replace your vehicle with a new version of the same model (or comparable one) or you could receive a cheque for the amount you originally paid for it.

With Actual Cash Value Coverage: Without one of these endorsements the settlement would be based on actual cash value. The insurer would look at what the market value of a vehicle of like kind and quality, in the same condition as yours was immediately prior to the loss occurring.   In a case like this, your settlement would likely be around $30,000 instead of your original purchase price of $40,000.

So there you have it. If you still have questions, or are concerned about your own policy coverages, please contact us.

 

accident, auto, automobile, car, claim, collision, comprehensive, coverage, crash, deductible, Insurance, payment, protection, vehicle

Popular Insurance Misconceptions

let us knowMisconceptionsAfter nearly 55 years of service we’ve heard just about everything. What we’ve learned is that there are a lot of misconceptions about the insurance industry.   Here’s just a few of them:

Home policies cover EVERTHING!

  • WRONG!   Well to be fair the industry may have done this one to itself by naming the most common home policy the “comprehensive / all risk” policy.  The truth is even a comprehensive / all risk policy has exclusions. In fact, that’s kind of how it works. Rather than list all the things under the sun that the policy does cover, a comprehensive / all risk policy lists the items that are not covered by the policy.

A landlords policy covers his tenant

  • WRONG! One of the basic principles of insurance is that you can’t insure what you don’t own. The landlord can’t insure your possessions and you can’t insure their property either.   If you’re renting you need a tenants policy. These provide you with coverage for your personal property and personal liability. The good news is these policies are really affordable. Starting at around $15 per month depending on your needs.

A condo owners policy isn’t required if the condo corporation has insurance

  • WRONG! This is perhaps one of the most common assumptions made by condo owners. The reality is that the condo corporation is only required to buy insurance on the condo building / structure, common areas and liability coverage.   It’s up to you, the unit owner, to insure your personal contents, your personal liability, and your improvements and betterments that were made to your unit by either you or a prior owner.

Vehicles stored in your garage are covered by your home policy

  • WRONG! Remember how we talked about list of exclusions on a home policy? Yep, you guessed it, vehicles are on that list. Cars, Motorcycles, ATV’s, Snomobiles,  are excluded because they are better insured elsewhere….. on an automobile policy.

Red cars cost more to insure

  • WRONG! 46% of people think this is true (52% women & 48% men)
  • The color of your car has no direct impact on insurance rates. However there may be an indirect link.   According to a recent study red colored cars came in second for most tickets issued.   What color got first? White.

New cars always cost more to insure

  • WRONG! New cars are loaded with features that greatly reduce the likelihood of an accident occurring. Stability control, traction control, crash avoidance braking systems, lane assist, adaptive cruise control, driver attention detection and anti lock brakes to name a few.   If an accident does occur these vehicles are also equipped with additional features that reduce the severity of injuries from the accident, curtain airbags, thorax airbags with head protection, knee airbags, seatbelt pretensioner…. The list goes on.   Long story short, newer cars are safer and as a result insurers will often give better premiums for these vehicles.

Small cars cost less to insure

  • WRONG! 40% of people think this is true (42% women, 58% men)
  • Rates are based on insurance company’s loss history for that type of vehicle. Smaller cars are typically purchased by younger, inexperienced drivers, who submit more claims. Smaller vehicles also have a higher frequency of injury claims due to their lighter weight and smaller size.

Insurance will pay for the maintenance of my car

  • WRONG! Insurance is for sudden and accidental events only. Maintenance and service costs can certainly be unexpected and expensive but they aren’t what the policy was designed for.

I won’t be held responsible if my friend wrecks my car

  • WRONG! 25% of people think this is true (48% women & 50% men)
  • The truth is, as the vehicle owner, you’re responsible.   If they cause damage, the claim goes on your auto insurance policy and can affect your rates. If the claim is bad enough you could be named in a lawsuit.   Moral of the story is think carefully before tossing your keys to just anyone.

The insurance company keeps changing the rules on what’s covered and what isn’t covered.

  • WRONG! The car insurance industry is highly regulated by provincial governments who set minimum coverage levels. If insurance companies want to make coverage or premium changes they have to get approval from the government.

That’s just a sample of some of the questions we’ve been asked over the years.  If you have a question about your coverage let us know.

Sources

 http://www.propertycasualty360.com/2014/10/27/here-are-the-top-10-myths-in-insurance?t=personal-lines&slreturn=1516816279&page=3

http://www.ibc.ca/ns/insurance-101/insurance-basics/insurance-myths

http://blog.cjponyparts.com/2014/07/most-and-least-ticketed-types-makes-and-colors-cars/

Insurance

Deductibles…

Why

What is a deductible?

Deductibles are one of the most misunderstood parts of a car insurance policy. Basically the deductible is the portion you agree to absorb financially in the event of an accident. For example if your deductible is $500 and the repairs to your car cost $8,500, you will be responsible for paying the first $500 and the insurance company will pay the remaining $8,000 to repair your  vehicle.

So how do I choose a deductible amount?

There are many deductible options available. Which one is right for you will depend on your own unique situation.  Typically the higher the deductible the lower your insurance premiums will be.  Here are a few examples of when a higher deductible may benefit you:

  • If you own a high value vehicle a higher deductible will help to keep premiums low.
  • If you recently added a newly licensed driver to your policy.
  • If you have traffic convictions. In some cases your policy may be surcharged depending on the number and type of traffic convictions.   A higher deductible can help to offset some of the surcharge.
  • If you have prior at fault claims. Your driving record may have been impacted by recent at fault losses on your policy. Moving up to a higher deductible can help offset some of the premium increase you may have experienced.

To help determine what deductible is right for you talk to one of our agents. We can walk you through the pros and cons of each deductible option and provide you with cost estimates on each to help you make the right choice for you and your family.

Why do I have to pay my deductible if the claim wasn’t my fault?

The important thing to remember here is that a deductible is always paid. Usually the deductible will be paid by the party responsible for causing the accident.  (If you caused the accident you will pay your deductible.  If the other driver caused the accident, their insurance will pay your deductible).  However, there are instances where you may be told you have to pay your deductible, even though the claim wasn’t your fault:

  • If the responsible driver fled the scene and we don’t know who to go after.
  • If the responsible driver has no insurance.
  • If the claim is a complex multi vehicle accident. Determining who is responsible for what can be a time consuming process. In these cases it may take the insurance claims adjusters months to properly determine fault.
  • If the drivers involved offer different accounts of events leading up to the accident.

Generally speaking the deductible will be reimbursed to you at a later date once fault has been finalized by the claims adjusters.

One of the best things you can do to help protect yourself from having to pay your own deductible in a claim that wasn’t your fault is to sell your car and take the bus to install a dash camera in your vehicle.  Dash cameras don’t lie.  They can provide valuable information about the accident and help prove which driver’s statement is correct.  They are inexpensive, easy to install, and can prove extremely valuable to both the insurance company and police in the event of a claim.

Remember, if you do ever suffer a claim, you have us on your side. We work for you, not the insurance company.  You can lean on us for advice and help in dealing with your claims process.

Insurance

Vehicle Theft

Car Theft

We are only a few weeks away from the Insurance Bureau of Canada (IBC) releasing their figures for the top ten most stolen vehicles of 2017. We promise to share that info with you just as soon as it’s available. The 2017 list is available here.

Unfortunately statistics in Canada show a vehicle is stolen every 7 minutes. That’s nearly 75,000 vehicles stolen every year!   Those costs add up pretty quickly.  According to IBC it adds up to nearly $1 billion each year ($542 million for insurers to fix or replace the vehicle, $250 million in police, healthcare and court system costs, and millions more in correctional services).

75,000 is a lot of stolen cars. So where do they all go? What happens to them?  Typically these vehicles are stolen for one of these reasons:

  • To sell abroad. Once stolen these vehicles may be loaded into shipping containers and sent abroad where they are sold for many times their original market value. Inspectors at the port of Montreal have seized roughly $8 million worth of stolen vehicles from the port each year since 2009.
  • To sell to unsuspecting consumers. Vehicles may be given a false VIN and sold to unsuspecting shoppers. Many buyers are unaware that thieves can replace a VIN from a stolen vehicle with one that belongs to a legally registered vehicle. This is a process called “VIN cloning” or “retagging”. This process is used by thieves in an attempt to hide the vehicles true history.
  • To sell the vehicle in parts. Sometimes a vehicle is worth more in pieces than it is as a whole. Thieves take the vehicle to a “chop shop” and disassemble the vehicle and sell the parts for profit. The engine, transmission and frame are often scrapped as they are all marked with the vehicles VIN. The remaining parts typically do not have the VIN and are sold to unsuspecting or dishonest salvage yards or mechanics.
  • To commit another crime. These vehicles are typically recovered within 48 hours of their theft as they have been abandoned after the thieves are done with them. These vehicles usually are damaged and may not be repairable.

Generally car thefts are lower among newer model vehicles. Advancements in vehicle security and ignition systems have helped to reduce the number of thefts.  In addition to that many automakers are now including, or offering the option, to have the VIN etched into the body panels and glass before the vehicle is delivered to the consumer.

When shopping for a used vehicle, make sure you do your research on the vehicle before signing the bill of sale and handing over your hard earned cash. Buying your vehicle from a trustworthy dealership is a good start.  Services like a Carfax report can indicate a potential VIN clone and confirm vehicle mileage.

There are also additional steps you can take to protect the vehicle you already own from theft:

  • Keep your vehicle locked at all times, even while driving.
  • Never leave your keys in or on the vehicle when it’s parked. If you have one of those little magnetic spare key holders get rid of it.
  • Never leave your car running and unattended. I know that one’s hard to do in our cold climate, but honestly your car will warm up quicker if you just get in and go. Expert mechanics also say that warming up the car in the cold before you drive actually does more harm to the engine longevity than just driving right away.
  • Don’t leave valuables inside your vehicle .
  • Avoid high crime areas. Know where you are going and plan your route accordingly.
  • Install an anti theft system.
  • Park your vehicle in well lit areas. Thieves prefer to work in the dark.
  • Make sure you have theft coverage on your automobile insurance policy.

Ultimately if a thief really wants a vehicle they will find a way. Vehicles are just metal and they are in no way worth more than your life.  Don’t ever put yourself in harm’s way for your vehicle.  Cars can be replaced, you can’t.

Sources : Insurance Bureau of Canada, Global News, Carfax, Popular Mechanics, Geico

Insurance

Cyber & Privacy Insurance

image-20161202-25653-5bctr2

In today’s data driven world where sensitive information is stored and transferred electronically, organizations like yours, which handle, receive, collect and store all kinds of information are vulnerable to costly and damaging liabilities from data security breaches.

Whether your customer’s data is compromised by a hacker, virus, cyber thief, or simply because of lost or stolen computers, laptops, flash drives or smart phones, data security breaches can have serious ramifications. There are substantial financial costs involved in finding and remedying a breach, including the cost of notifying customers –now legally mandated in Alberta. It is estimated that 1/3 of all Canadian businesses have been subject to some sort of Cyber attack or at least a probe attack. The risk to you is that sensitive client data can be stolen. By law, you are required to take action by notifying all of your clients of a breach of their information. This can be a costly process. In the event of a data breach you may also be exposed to litigation by your clients if sensitive data is stolen. You can also suffer financial damage due to the interruption of your business operations as well as damage to your reputation as a safe place to do business.

Cyber criminals don’t kick down your front door –they get your employees to open it for them by sending them infected emails. Educating your people about these things is the most cost effective way to protect your business from Cyber attack. We also recommend that you employ third party consultants to assess your IT security. We can’t help you with your computer system’s security measures against these types of attacks, you need to have a detailed discussion with your IT service department / provider to ensure you have done everything possible to thwart cyber attacks with the most up to date fire walls, security software and antivirus software.

In addition to risk mitigation steps that can be taken, we can now provide you with a Cyber and Privacy Insurance policy. It can provide coverage for:

  • Legal claims against you arising from unauthorized access to data containing identity information and the failure to provide notification of data breach where required by law.
  • Legal fees associated with defending legal action against you as well as liability coverage in the event of a legal settlement against you.
  • Security breach remediation and notification expenses
  • Expenses incurred to restore data lost from damage to computer systems due to computer virus or unauthorized access
  • Money paid due to E Commerce extortion
  • Loss of income, and the extra expense incurred to restore operations as a result of a computer system disruption caused by a virus or other unauthorized computer attack.
  • Loss of monies due to fraudulent transfer instructions to a financial institution can also be provided.

Cyber and Privacy Insurance should be considered if you handle or store any sensitive customer, employee or business information on your computers as you are at risk of Privacy Breach and/or Cyber attack. If you store information electronically or deal with credit cards, social insurance numbers, addresses, bank account information you are of interest to cyber attackers. If the risk of a cyber attack has struck a nerve with you, we encourage you to call us to look at how we can help you protect your business. If your business was exposed to a ransom ware attack and you are asked to cough up $30,000.00 the true cost would be much more than $30,000.00. There are costs for a forensic investigation, payment to lawyers to go through the notification process, public relations costs to mitigate reputational harm, etc. In a serious incident total costs could easily reach $100,000.00.


Claims Examples

 

Example #1:

An online mortgage company reported a breach after several former employees gave mortgage lenders access to confidential customer records. Over a two year period, lenders obtained access to private client information, such as social insurance numbers, income and employment data, and used it to market their own mortgages. The mortgage company incurred the cost of notifying their clients, and the cost to protect the privacy and identity of the firm’s clients, restore their identity to pre-theft status if required and report any security breach to credit agencies. Total remediation costs were in excess of $75,000.

Example #2:

A mid-size accounting firm was broken into and laptop computers were stolen. Some of the information contained in these laptops was personal, including the social insurance numbers and bank account information of the firm’s clients. Overall, a total of nearly 10,000 of the firm’s clients were affected by this theft. Although the police investigating the case suspected that the theft was a simple “smash and grab,” the firm had not encrypted the information found in these laptops, making it easily accessible. There was a one month lapse between the time of the theft and the time the firm notified their clients.

The firm had to incur significant remediation costs, both to notify the clients and to retain a company to protect the privacy and identity of the firm’s clients, and restore their identity to pre-theft status as required and report any security breach to credit agencies. Total remediation costs were $150,000.

Although this example involves an accounting firm, it could apply to professional practices of all kinds, including medical clinics, medical professionals, business consultants, brokerages or any other type of professional dealing with sensitive and confidential information.

Example #3:

A medical clinic employee accidentally emailed a file with client names, medical records and provincial health card numbers to an unauthorized individual. The medical clinic notified its clients of the breach immediately. Two months after the breach, one of the clinic’s clients was a victim of identity theft and sued the clinic for damages. The final settlement was $50,000 and the cost to defend the clinic was $25,000.


Call us now so we can send you a Cyber Solution Insurance Application and we will put together a quote for you.

Insurance

Are all your eggs in one basket?

eggs object on a white background

Growing up we were all told “don’t put all your eggs in one basket”   This phrase is commonly (and some might say, incorrectly) attributed to Miguel Cervantes (in Don Quixote), but some sources have reported its usage as early as the 1600’s.  A similar proverb dating back to 1617 reads “he is a fool which will adventure all his goods in one ship”

Is it a Coincidence that expressions like this date back to the beginning of what is considered the modern insurance era?  Probably not.

Business owners were concerned with loss of their goods that were loaded on ships to be transported to customers.  The risk of losing everything in the event of a ship sinking or captured was too great.   One solution was to use extra ships and spread the load out. That way if a ship was lost you wouldn’t lose everything.   It was a costly solution that still carried a fair amount of risk.

In the late 1680’s Edward Lloyd opened a Coffee house on Tower Street in London.  It soon became a popular spot for ship owners, merchants and captains and thereby a reliable source of shipping news.   This was the birth of Lloyds of London and the first marine insurance market.

Generally putting all your eggs in one basket would be risky decision.  You won’t invest all your money into one stock would you?  But with insurance, it actually makes sense to put all your policies in one broker’s office.

Advantages of placing all your coverage in one brokerage:

  • You’ll develop a strong relationship with your agent. They will get to know you, what you need to protect and help identify risks that you may be exposed to.
  • You’ll benefit from a broker who access to a wide variety of insurance markets to ensure that you are getting the right coverage for your needs rather than just another cookie cutter policy.
  • You could benefit from decreased deductibles in the event you suffer a claim that involves more than one of your policies. For example a hail storm that damages both your home and automobiles.
  • You’ll benefit from increased discounts from having multiple policies insured together
  • You’ll have a trained licensed insurance expert working for you to aid you through the process of setting up new coverage, reviewing current coverage, or going through the claims process.
  • You’ll be treated as more than just another policy number. We understand that without our clients we wouldn’t be where we are today.
  • Reductions in the number of companies that have access to your personal information.

So call, click, or visit.  We will take good care of your eggs.