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Mackay Insurance Blog

 

September 2018

7 Tips to Keep Your Canadian Insurance Affordable

car, house, family, outlines over grass

Insurance is our business, so of course we are passionate about what we do!

But honestly, in the four-plus decades our doors have been open, we have yet to meet a new client who is truly excited about buying insurance.

Insurance generally falls into the “must-have” category rather than in the “want to have” category. You know you need it and you understand the risk of not having it, so you put a line item in your annual budget and you renew your policies when their renewal dates arrive.

But if purchasing insurance itself isn’t particularly fun or exciting, imagine what it feels like to learn you have been paying more for your insurance than you need to! That is the real bummer in our industry, and one we want to help our clients avoid!

In this post, learn seven key tips to make sure you are paying a fair price for your insurance.

1. Check Your Credit and Ask Your Insurer to Do the Same

In today’s global online marketplace, where many industries now service a provincewide or even nationwide clientele, credit scores are more important than ever as a screening factor.

Your credit history and score can say a lot about how you handle money and debt. When you’ve worked hard to keep your credit score high or you have worked hard to repair your credit after a tough situation, you deserve the benefits that now affords you!

One benefit can be a lower property insurance premium. You can even pull your own credit score first, review it and clear away any issues. When it is squeaky clean, ask your insurer about credit rating and insurance—you may just earn yourself a discount!

2. Bundle Your Insurance Products

The insurance industry is heavily regulated by provincial and national laws, but oddly, this just makes the competition stiffer to win and keep new clients.

We attract and retain customers through excellent customer service. This includes looking for discounts for our customers. A perk many insurers offer is premium discounts when a customer takes out more than one policy. For example, maybe you have a home insurance policy with us, and now you want to take out an auto insurance policy as well. Or perhaps you have your auto insurance policy with us and your spouse is insured somewhere else. Let us take a look at bundling everything for you. The discounts can be substantial when you bundle more than one insurance policy together with a single insurer.

3. Find the Cheapest Way to Pay

Another easy way to cut insurance premium costs is to opt for the cheapest payment plan the insurer offers. This all relates to the insurer’s own costs of processing payments. You can pay for the year up front, or with many insurers, a three-payment option does not carry any service charge at all.

If one of these payment methods aligns with your budget it can net you a discount of 3 percent or more, without lifting a finger!

4. Review Your Coverage Annually

Your life does not stand still. You add a deck to your house. Babies are born. Kids leave for university. You swap out that old oil furnace for a new propane furnace. Your income changes. You decide to close in your swimming pool. An aging parent has moved into that basement bedroom that your university-aged son or daughter vacated. The policies that fit you perfectly five years ago may not fit who you are today. You may have new exposures that need to be looked at, or you may be paying to insure things you no longer need to insure.

You should make a point to review your insurance policies when they renew each year, and phone or stop in every few years to go through them in person with a broker. Tailoring your insurance to your current needs can sometimes deliver a surprising number of savings!

5. Increase Your Deductible

Even if you aren’t able to find any areas where you are over-insured, there may be options to raise your deductible (the amount you pay out of pocket if you make a claim) and realize cost savings.

The one caveat here is that you should not raise your deductible above the amount you can comfortably afford to pay if you do have a claim under that policy.

6. Don’t Call In That Claim

In the same way that you have to do a bit of forecasting to figure out how much insurance coverage to take out each year, so too does your insurer have to forecast to figure out how to keep the insurance business affordable for clients yet still profitable for the company.

Many insurers now offer a “claims-free” incentive or discount for clients who have not filed any claims for a specific period of time. Sometimes this incentive increases with the amount of time the client has been claims-free.

Not only is it quite likely that your next year’s insurance premium will go up if you file a claim (since this makes you more expensive to insure), but also you will forfeit any claims-free incentive your insurer is offering.

This is not to discourage you from filing claims, necessarily, but simply to say that if your claim is for something small or something your deductible barely covers, it may be worth your while to just pay that particular expense out of pocket to keep your premiums lower.

7. Adjust Your Coverage As Your Property Ages

Your auto is one of the biggest-ticket items you will ever own. But as a car ages, the cost of maintaining full insurance coverage may outweigh your actual benefits.

This can be worth exploring if you are insuring an older vehicle.

Get in Touch

Have questions or want to review your insurance coverage before you renew? Contact us online, or give us a call at 888-853-5552!

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How to Select Tenant Insurance You Can Trust

modern apartment

Many renters don’t think about tenant insurance unless their landlord requires proof of a policy as a condition for renting.

It is all too easy to look at renting as a “no responsibility” situation—you pay for the space you live in and your landlord takes care of the heavy lifting for things like repairs and insurance. Many renters in Canada don’t carry tenant (renter's) insurance!

This strategy can backfire. As a renter, you are exposed to serious liability issues, both in your home and away. The easy and affordable solution is to buy a tenant insurance policy.

In this post, we take a close look at the benefits of tenant insurance so you can decide if now is the right time to take out a policy.

What Is Tenant Insurance?

You can bet that your landlord carries an insurance policy that protects the premises and structure of the building itself. However, for all intents and purposes, your landlord’s policy ends at your front door.

What lies inside your space—your possessions—is not covered by your landlord’s insurance policy.

This means that tenant insurance is the policy you need in order to protect personal items you have spent your hard-earned money to purchase.

The Star reports that tenant insurance often costs less than $1 per day and calls taking out a renter insurance policy a “no-brainer.”

But is it, really? Let’s take a look at exactly what a typical tenant insurance policy covers.

What Does Tenant Insurance Cover?

The typical basic tenant insurance policy covers two key things:

1. Personal property

Your personal belongings will be covered up to a certain dollar amount. You will select the amount of insurance needed to replace your possessions. You can add policy riders if you have high-valued jewelry, cameras or other special property and collections.

Many young renters in particular take the position that their personal possessions are not valuable enough to take out a renter policy. It is important to test out that theory by making a list of your valuables, assigning a dollar value to each. Though you have used your furniture and clothing and perhaps could not sell it for much, most tenant policies insure property for the cost to replace the item with new property—new for old.

For example, you might be readily able to replace your laptop or your watch if one of these items was stolen. But would you be financially able to replace all of your valuables at the same time if your home was broken into and robbed?

As well, if you choose to take your personal property outside your home and put it in the car and your car is broken into, your tenant insurance policy will still cover the loss. The same holds true if a valuable item is stolen or damaged on a trip or while you are running errands.

2. Personal liability

Personal liability is often an area of confusion for many. What does “personal liability” mean? You can be held liable (legally and financially responsible) for actions you take that cause harm to other people or damage to their property.

For example, let’s say you light a candle and fall asleep. Meanwhile, the air conditioning comes on and blows the curtains into the candle flame and they catch fire. By the time you wake up, the fire is spreading from your apartment to nearby units.

Without a renter insurance policy to protect you, you could be held liable for the damage your actions caused to your landlord’s building and other tenants!

Personal liability also covers you in case someone visits you, trips and falls, and decides to sue you. If you are away from home and cause injury to someone else that is not auto-related, your personal liability coverage can also protect you.

Tenant Insurance: Replacement Value Versus Actual Cash Value

You can choose whether to purchase a tenant insurance policy that covers the full replacement value of your personal items or the actual cash value at the time your items were stolen, lost or destroyed.

Opting for a policy that covers the full replacement value ensures you won’t have to dip into your own pocket to account for depreciation or changes in market price.

Tenant Insurance: All Risk Versus Named Perils

There are two types of renter insurance policies: all risk and named perils. Under an all risk policy, only perils that are specifically excluded in the policy fine print will not be covered.

Under a named perils policy, only perils that are listed in the policy are covered.

Perils, as the name suggests, is a term that means bad things that could happen. For example, a flood is a peril. So is a fire. Theft, vandalism, wind damage, water damage, rain or hail damage, even getting struck by lightning, are all considered perils.

Tenant insurance typically covers these types of perils so that if your personal items are lost due to any of these occurrences, you will have coverage to replace them.

Additional Living Expenses Coverage

Tenant insurance also covers your expenses if an insured event beyond your control causes your rental home to become uninhabitable and you need to live elsewhere until repairs can be made. For example, let’s say there was a fire and now your landlord needs several months to make repairs before you can move back in.

Where will you stay? How will you eat? These costs can really add up, especially if you don’t have a friend or family member who can afford to put you up at no cost while you are waiting to move back into your unit.

Get a Free Tenant Insurance Quote!

It is free and easy to generate a quote for tenant insurance. Just visit our quick quote generator tool to get started.

If you have questions or want to speak with an agent personally, give us a call at 1-888-853-5552!

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Do You Run a Home-Based Business? Why You Need Business Insurance

home business woman at cluttered desk

It is exciting to get a new home-based business up and running! For many Canadians today, being able to work from home profitably is a huge “bucket list” goal.

The number of home-based businesses throughout Canada grows each year, which is great news for Canada’s economy.

However, a surprising number of home-based business owners do not realize that their home insurance coverage may not provide coverage for claims associated with their home business operations.

This can put both the business owner and the business at risk of exposure to liability and legal issues. In this article, we talk about why we recommend home-based business insurance.

What is Home-Based Business Insurance?

As the name implies, home-based business insurance is an insurance policy that is specifically tailored to the unique needs and potential liability issues of a business that is operated out of your residence.

What Are the Types of Home-Based Business Insurance?

There are two basic types of home-based business insurance. It is important to talk to your broker about your business and determine which of these solutions is right for you.

Extension of an existing homeowners policy

The first type of home-based business insurance can be provided through an extension of your existing home insurance policy.

This type of insurance may fit your needs if your business has just one or two employees without a lot of foot traffic through the home (customers, vendors, employees).

Standard business insurance policy

If you have a larger or more high-value business, or you are storing business inventory at your home, you may need a standard business insurance policy instead.

What Does a Home-Based Business Insurance Policy Cover?

Both types of home-based business insurance policies offer certain standard features that all business owners should have in place.

Property

For general purposes, the majority of home-based businesses have several types of business-related property kept on the premises to help run the business.

Examples include home office equipment (desks, file cabinets, printers, scanners, computers), business inventory (raw materials, finished products, packaging, marketing materials) and cash reserves.

Your property coverage typically provides coverage for business property losses in your home and any items you may transport for business purposes that are lost, stolen, vandalized or destroyed while you travel.

Your cash on hand needs to be looked at separately. You will need the correct amount of insurance, and insurance against the correct perils. As an example there is different coverage needed to protect you if someone breaks in and steals your cash (theft), if someone holds you up at gunpoint on the way to the bank (burglary), and if an employee steals from you.

Liability

Business liability coverage will protect you if, for example, a customer is injured while at your home. It can also protect you from legal issues that arise from damage that can be traced back to your company’s services or products.

Business interruption

Business interruption insurance is a valuable resource for small and home-based businesses in particular, since often even a short interruption may greatly impact the viability and health of the business.

Business interruption insurance can compensate you for being unable to run your business due to your place of business (in your case, your home) being unusable due to a fire or other insured peril. It may also cover the costs for you to move your business operations to another location until you can move back into your home.

Extra Business Insurance Coverage You May Need

The specific type and level of home-based business insurance coverage you need can vary depending on the type of business you operate as well as on the scope of the business and the number of employees you have.

For example, let’s say you run a service-based business. Your main “product” is your expertise. If you give professional advice, you may need a professional liability (errors and omissions) policy.

This policy covers and protects you if a client sues you for professional negligence or malpractice.

Businesses that work with children or at-risk adults face a higher liability exposure. In addition to slips, falls, accidents and other bodily injury issues, you need insurance that will pay for your defence costs if abuse is alleged.

You may need special insurance if your business property includes antiques, rare items, high-value items or unique items.

It is important to talk through your home-based business with your broker and put together the right coverage to meet your needs.

How to Determine What Business Coverage You Need

A technical term for figuring out what to insure and for how much is “risk management.”

Risk management means identifying possible risks in advance and then working backward to put a plan in place to both prevent them from occurring and protect you if they do occur.

You can use risk management to figure out how much insurance coverage your home-based business needs by following these four steps:

  1. Ask yourself what could go wrong. Write down everything you can think of.

  2. Brainstorm ideas for how to prevent each risk from ever happening.

  3. Assign a dollar value (or range) to each risk—how will it impact your bottom line?

  4. Brainstorm ideas for how your business will recover if each risk happens.

Doing this pre-work can come in handy when you meet with your insurance broker. You will already have a good idea of the potential impact of each business risk, and your broker can help tailor your insurance policies to meet your needs.

Get in Touch

Here at Mackay Insurance, we have a combined 165+ years of insurance industry expertise! Contact us online or give us a call at 888-853-5552 to find out how we can help you protect your home-based business!

Click here to get a free business insurance quote now.

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