Frequently Asked Questions

Most insurance companies will offer liability limits of $1M, $2M or $5M (higher limits may be available upon request). Our clients tend to weigh various factors when deciding which limit is right for them, including (but not limited to):

• Size of business/annual revenues
• Likelihood of a claim based on business operations/industry
• Likelihood of a claim involving multiple claimants (which would exhaust the limit more quickly)
• Contract requirements
• Clientele
• Requirement for all subcontractors to carry the same liability limit as you
• Cost/additional premium to increase the limit

Ultimately the limit chosen is up to you to choose, we cannot make that choice on your behalf.

An insurance deductible is the amount of money you, as the policyholder, agree to pay out of pocket before your insurance provider starts covering costs. For example, if you have a home insurance policy with a $1,000 deductible and your claim costs total $10,000, you would be responsible for paying the first $1,000, and then your insurance would cover the remaining $9,000 (subject to any other policy limits or terms).

Policies with higher deductibles typically have lower premiums (and vice versa). Additionally, if you have a lien or lease, there might be restrictions on the deductible amount you can select, usually capping at $1,000 or less as part of your agreement.

In insurance, pro-rata refers to a method of calculation also known as a “proportionate basis”. Proportionate means you will pay for the actual number of days you were covered. 

Example 1: Cancellation
If your policy cost $1,000 and it was cancelled pro-rata on day 100, the amount you owe would be calculated as follows:
(100/365) x $1,000 = $273.97

Example 2: Policy Change
If your policy was issued at a premium of $1,000 and you made a change with 100 days left in your policy term that increased your cost by $100 per year, the amount you owe would be calculated pro-rata as follows:
((100/365) * $100) + $1,000 = $1,027.40

Short rate is a term used in insurance to describe a cancellation of an insurance policy before its expiration date. When a policy is cancelled early, the insurance company will typically charge a fee for the time the policy was in force. This fee, known as the short rate, is calculated based on a percentage of the premium and is designed to compensate the insurance company for the loss of future premiums.

The short rate is usually higher than the pro-rata premium, which is the amount that would be owed if the policy were cancelled on a pro-rata basis and would have been adjusted based on the number of days remaining on the policy.

Property insurance policies typically value assets using a replacement cost or actual cash value basis.

Replacement Cost is the amount it would take to replace or repair the damage property with new property of like kind and quality, without deduction for depreciation. For example, if a 10-year-old roof is damaged, the insurer will pay to replace it with a new roof of similar kind and quality, regardless of the old roof’s current value.

Actual Cash Value is the replacement cost of the damaged property minus depreciation. Depreciation accounts for factors such as age, wear and tear, and obsolescence. Using the same 10-year-old roof, the insurer will calculate the cost to replace the roof and then subtract depreciation based on the roof’s age and condition. The payout will be lower than the replacement cost because of this depreciation.

Replacement cost coverage provides better financial protection as it covers the cost of new items, helping you return to your pre-loss state without out-of-pocket expenses for depreciation. While replacement cost coverage offers more comprehensive protection, it typically costs more in terms of premiums compared to ACV coverage.

The insured is responsible for ensuring that policy limits are sufficient for their needs. 

This coverage is required by law in Ontario. It provides benefits (up to specified limits) that you and other insured persons may be entitled to receive if injured or killed in an automobile accident. These benefits include:

• Income replacement for persons who have lost income
• Payments to non-earners who suffer complete inability to carry on normal life
• Payment of care expenses to persons who cannot continue to act as a primary caregiver for a member of their household
• Payment of medical, rehabilitation and attendant care expenses
• Payment of certain other expenses
• Payment of funeral expenses
• Payments to survivors of a person who is killed

You may also purchase optional benefits to increase the standard level of benefits in your policy. Contact us today to learn more about the increased limits available for purchase.

Source: Ontario application for automobile insurance (OAF1)

This coverage provides coverage if you or other insured persons are injured or killed by an uninsured motorist or by an unidentified (e.g. hit-and-run) driver.

It also covers damage to your automobile and its contents caused by an identified, uninsured motorist, subject to a deductible as stated on your declaration pages. 

Source: Ontario application for automobile insurance (OAF1)

This coverage is required by law in Ontario. It provides coverage in Ontario, under certain conditions, for damage to your automobile and to property it is carrying, when another motorist is responsible. It is called direct compensation because you will collect directly from your chosen insurance company, even though you are not at fault for the accident. There may be a deductible amount, and this amount is either paid by you toward the cost of repairs or is deducted from the loss settlement.

Source: Ontario application for automobile insurance (OAF1)

Specified perils coverage is an optional coverage included in the 
“loss or damage” section of your Ontario automobile insurance policy (OAP1). This coverage is subject to a deductible and covers the described automobile against loss or damage caused by certain specific perils. They are:

•  Fire
• Theft or attempted theft
• Lightning
• Windstorm
• Hail or rising water
• Earthquake
• Explosion
• Riot or civil disturbance
• Falling or forced landing of aircraft or parts of aircraft
• The stranding, sinking, burning, derailment or collision of any kind of transport in, or upon which, the described automobile is being transported

Source: Ontario application for automobile insurance (OAF1)

Comprehensive coverage is an optional coverage included in the 
“loss or damage” section of your Ontario automobile insurance policy (OAP1). This coverage is subject to a deductible and covers a described automobile against loss or damage other than those covered by Collision or Upset, including perils listed under specified perils, falling or flying objects, missiles and vandalism.

If your vehicle is leased or financed, your leasing/financing company will require this coverage and specify a maximum deductible they will allow.

Source: Ontario application for automobile insurance (OAF1)

Collision coverage is an optional coverage included in the “loss or damage” section of your Ontario automobile insurance policy (OAP1). This coverage is subject to a deductible and covers damage when a described automobile is involved in a collision with another object or tips over.

If your vehicle is leased or financed, your leasing/financing company will require this coverage and specify a maximum deductible they will allow.

Source: Ontario application for automobile insurance (OAF1)

All perils coverage is an optional coverage included in the
“loss or damage” section of your Ontario automobile insurance policy (OAP1). This coverage is subject to a deductible and combines the collision or upset and comprehensive coverages. This coverage includes loss or damage caused if a person who lives in your household steals a described automobile. Coverage also applies if an employee who drives or uses, services or repairs a described automobile, steals it. 

If your vehicle is leased or financed, your leasing/financing company will accept this coverage in lieu of collision and comprehensive coverages, up to their specified maximum deductible.

Source: Ontario application for automobile insurance (OAF1)
Ontario automobile policy (OAP1)

In essence, this endorsement means that if you obtain a minor conviction on your license in the future, your insurance premium with that insurer will not increase as a result of that first minor conviction. 

In Ontario, there are two endorsements that relate to rental/non-owned automobiles:

OPCF20 – Provides coverage for you when you need to pay for other means of transportation because of loss or damage to your automobile caused by a peril for which you are insured.

OPCF 27 – Extends coverage for loss or damage to a non-owned automobile including its equipment resulting from the care, custody, or control of that non-owned automobile by an insured person, and when a person named as a driver on the policy drives other automobiles or rents or leases other automobiles.

These endorsements are subject to a specified limit, so it is important to review your limits regularly to ensure they are adequate for your needs.

Per Ontario Ministry of Transportation guidelines, if you are a new resident of Ontario and have a valid driver’s license from another province or country, you can use that license for 60 days in Ontario. If you want to continue to drive after 60 days, you must get an Ontario driver’s license.

All automobile insurance policies must list at least one driver with a valid Ontario drivers license. That driver does not need to be the vehicle owner (ex. if the vehicle owner is unlicensed or has not yet received their Ontario drivers license).

Source: https://www.ontario.ca/document/official-mto-drivers-handbook/getting-your-drivers-licence

Automobile insurance applications in Ontario (OAF1) are provincially regulated and require that all household drivers be disclosed for rating and underwriting, even if you will not be granting that individual permission to use your vehicle. Additionally, insurance companies use information about the drivers in your household to determine who is eligible to drive the insured vehicles. If you don’t disclose all household drivers on your policy, your insurance company may not cover any claims made by those drivers, which could leave you with significant out-of-pocket expenses.

Source: http://www.fsco.gov.on.ca/en/auto/forms/pages/oap1_forms.aspx

Broad form coverage is very similar to named perils coverage, and also has a specified list of perils that it provides coverage for. There are often a couple of additional perils in addition to the items listed under named perils coverage, including sonic boom and spillage/staining. 

Comprehensive coverage is the most expensive (and common) type of homeowners insurance; it protects you against all perils unless specifically excluded in your policy wordings. Common exclusions include (but are not limited to):

• Buildings or property used for business or commercial purposes
• Illegally acquired property,
• Damage cause by wear and tear
• Damage caused by war or terrorism
• Damage occurring after your dwelling has to your knowledge been vacant for more than 30 consecutive days
• Damage caused by sewer-backup, flooding or overland water (may be available to purchase for additional premium)
• Damage caused by any nuclear incident 

It is rare that a claim under a habitational insurance policy would be due to the fault of the insured. Unlike automobile insurance policies (which are governed by R.R.O. 1990, Reg. 668: Fault Determination Rules under Insurance Act R.S.O. 1990, C. I.8) most other types of property and casualty insurance policies are rated based on the existence of a claim, not whether the insured is considered “at fault” for the claim.

For more information about what factors affect your premium, visit the Insurance Bureau’s Website at http://www.ibc.ca/on/home/buying-home-insurance/premiums.

Home insurance policy payments are made based on one of the following settlement basis:

When you file a home insurance claim, the payment you receive can be based on one of the following settlement methods:

Actual Cash Value (ACV): Takes into account the cost of replacing the damaged property, less any depreciation. Depreciation is calculated based on factors such as:

• Condition: The state of the item immediately before the damage occurred.
• Resale Value: The market value of the item if sold.
• Life Expectancy: The normal lifespan of the item.

ACV provides compensation reflecting the item’s age and usage, not the cost of buying a new item.

Replacement Cost: Covers the cost of replacing damaged property with new items of similar kind and quality, without deducting for depreciation. This means you can replace old items with new ones without factoring in their decreased value due to age or wear and tear. The settlement amount is based on the actual cost to replace the items at current prices.

Guaranteed Replacement Cost (GRC): Ensures that your home and belongings are replaced regardless of the cost, even if it exceeds your policy limit. This option offers the highest level of protection and ensures you can fully rebuild or replace your property to its original state without worrying about increased costs or inflation. It provides peace of mind knowing you are fully covered, no matter the expense.

The definition of Personally Identifiable Information (PII) varies between insurers, but generally speaking it is any information about an individual that is required by any local, state, provincial, territorial, federal, or foreign law or regulation to be protected from unauthorized access, acquisition, or public disclosure.

In Ontario, the Information and Privacy Commission of Ontario defines information as being PII if:

– It is about the individual in a personal capacity; that is, it reveals something of a personal nature about the individual, and

– It is reasonable to expect that an individual can be identified from the information (either alone or by combining it with other information)

Source: https://www.ipc.on.ca/wp-content/uploads/2016/10/what-is-personal-information.pdf