Back to Basics, Part One: Finding the Policy that is Right for You

Is your New Year’s resolution to learn more about insurance? Well, then you are in the right place!

The first time I purchased insurance, I was seventeen-years-old, and my dad wrote down on a sticky note the coverages and deductibles I needed. It was not until several years later, when I started working in insurance, that I actually knew what my vehicle was covered for.

For many people, renewing insurance policies is like filing taxes: you have to do it every year, it is no one’s favourite task, and it is not always easy understand how it all works. But whether you are insuring your homes, boats, vehicles, or businesses, having the proper insurance coverage is key to protecting your assets.

How Do I Know Whether I Have the Proper Insurance Coverage?

The best way is to find an educated broker and ask questions tailored to you and your unique situation.

What Do I Ask?

There are a few areas you will want to cover:

• Coverages – what kinds of things are covered? Are there other coverages available that I don’t have?
• Exclusions – what kinds of things are not covered? Is it possible to get coverage for these things?
• Limits of insurance – how much coverage do I have? Can I get more if I need it?
• Deductibles – how much are they? To what coverages do they apply? Are lower or higher deductibles available?
• Conditions and Warranties – is there anything I have to do in order to maintain coverage? (Insurance policies are contracts, and there are always requirements of both parties.)
• Your situation – ask about anything that makes you different from others. Do you house international students? Does your car have a custom stereo? Do you race your watercraft? Is your business located in the same building as a fire-eating school?

Anything Else?

Ask your broker whether they represent any other insurance companies that they think may be a better fit for you.  Most brokers have access to multiple insurance companies, all of which offer different coverages, premiums, and deductibles, and have different requirements.

If you expect your situation to soon change – maybe you are planning to renovate your house, replace your boat, or expand your business operations – discuss it with your broker in advance. Your policy will likely need to be updated, and this can take time.

For more help understanding the basics of insurance, check back for more ports in our ongoing series Back to Basics.