Frequently Asked Questions

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Legal Disclaimer: This website sets out a variety of materials relating to insurance to be used for educational and non-commercial purposes only; the author(s) of this website do not intend the website to be a source of professional advice. Please retain and seek the advice of an insurance professional and use your own good judgement before choosing to act on any information included in the website. If you choose to rely on the materials, you do so entirely at your own risk.

General Insurance FAQ

How do I know what liabilty limit to choose?

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.

Auto Insurance FAQ

What is automobile liability coverage?

The liability section of the Ontario Automobile Insurance Policy (OAP1) provides coverage for you or other insured persons if someone else is killed or injured or their property is damaged in an automobile incident. It will pay for legitimate claims against you or other insured persons up to the limit of your coverage, and the cost of settling claims. 

This coverage is required by law, and most companies will not offer a limit lower than $1M.

Source: Ontario application for automobile insurance (OAF1)

What is accident benefits coverage?

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)

What is uninsured automobile coverage?

This coverage is required by law in Ontario. It 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 $300 deductible.

Source: Ontario application for automobile insurance (OAF1)

What is direct compensation - property damage coverage?

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)

What is specified perils coverage?

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 distubance
  • 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)

What is comprehensive coverage?

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)

What is collision coverage?

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)

What is all perils coverage?

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.

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)

How do I know if I have rental car coverage?

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.

I'm new to Ontario, can I get insurance without an Ontario driver's license?

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

Home Insurance FAQ

What is named perils coverage?

Named perils (also known as specified perils) coverage only protects you from the perils specifically listed in your insurance policy. In general, perils covered by a named perils policy will generally protect your property from damage due to:

  • Fire, smoke, lightning, and explosion
  • Windstorm and hail
  • Theft and attempted theft
  • Rupture, freezing and water escape
  • Vandalism or malicious acts
  • Civil disturbances and riot
  • Impact by vehicles, watercraft, or aircraft
  • Falling objects
  • Weight of ice, snow and sleet
  • Collapse of a building or any part of a building
  • Sudden and accidental damage from an electrical current
  • Bursting or overflow of a fixed domestic fuel tank, including its apparatus or pipes
  • Accidental damage such as a leaking toilet causing water damage
What is broad form coverage?

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. 

What is comprehensive home coverage?

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 

Commercial Insurance FAQ

What is co-insurance?

Some assets on commercial or non-standard personal-lines insurance policies are subject to a co-insurance clause/penalty that limits the amount paid in the event of a claim if assets are not insured up to the specified percent of the value (usually 80 or 90%).

Co-Insurance Example:

For this example, I will use a typical 90% co-insurance clause.

If you own $100K in assets but choose to only insure $50K, the insurance company considers you to be a “co-insurer” responsible for the extra items you own but don’t have insured with them (the remaining $50K). Since you did not have your assets insured up to the co-insurance percent of the total value (ex., 90% of the replacement cost of your assets) your claim payment will be reduced/penalized.

As a result, rather than paying you $50K in the event of a total loss, they’ll only pay based on this formula:

     Amount Carried       x Amount of Loss = Claim Payment
Amount That Should
Have Been Carried

     $50K      x $50K Loss = $25,000 Claim Payment (Less Deductible)
    $100K

Had you insured the contents to $90K in the above example, you would receive a claim payment of $90K (less your deductible).

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