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Insurance Bureau warns about the effects of environmental disasters

Due to the increase in natural disasters, the Canadian insurance industry may have to consider raising premiums for consumers.

The bill for the Fort McMurray fires sparked conversation throughout the insurance industry, leading many to believe that severe weather is a top priority nationally. The trend of a warming atmosphere is taking a toll as we continue to see flooding and fires all around Canada.

Because insurance provides protection coverage to clients when disasters happen, the amounts paid out for these events have increased dramatically. With this in mind, insurers need to confirm they adequately rate for true exposure, and that they can increase premiums if a property is located in a high-risk zone.

Educating the public on the effect of environmental disasters is key to helping homeowners protect themselves and their property. They must know how to mitigate loss and reduce the risks they face where possible, as natural disasters become less of a future threat and more of a present danger.

Rising auto insurance claims could lead to higher premiums in 2017

An unprecedented rise in auto insurance claims may affect policyholders as the industry mulls over premium increases. New findings from Canada’s General Insurance Statistical Agency reveals a surge in claims.

This year, policyholders’ rates have been squeezed, with claims on the rise. This resulted in a poor year for insurers. Manitoba saw a 68% rise in non-collision claims, while New Brunswick topped a 30% increase in claims. These rising costs across the nation may be reflected in next year’s premium rates for consumers.

Amanda Dean, VP of the Insurance Bureau for the Atlantic region, said it is difficult to predict what the industry will do overall with premiums following the recent rise in claims. She suggested that even though this occurred last year, it may not be a recurring trend.

We will continue to watch to see how premiums are affected next year. If you have any concerns, make sure you speak to your broker or company agent.

Quebec’s Airbnb regulations: Will homeowners abide?

Although Quebec’s provincial government recently amended its tourist accommodation legislation to regulate people participating in home-sharing, some have doubts on how the law has affected this new service.

Under the law, anyone who advertises rental accommodations for no more than 31 days must purchase at least $2 million of insurance, as well as secure a $250 permit. According to one media source, less than 500 permits have been issued across the province—41 of those in Montreal.

To compare, it is important to note that over 10,000 units are listed on home-sharing websites in Quebec—meaning that renters are not purchasing the necessary insurance.

Users are finding loopholes in the law, making lawmakers realize the need to take a stance against the illegal activity. Because the modifications were only issued five months ago, there is hope that over time compliance will improve.

Insurance companies call for stricter distracted driving laws

Canadian insurance companies are demanding the federal government create stricter distracted driving laws.

Currently, each province approaches distracted driving differently. In Quebec, fines range from $80-100, with four demerit points added to the driver’s license. In comparison, distracted drivers in Prince Edward Island face $500-$1,200 in fines and receive five demerit points.

Insurance companies feel that these penalties are not enough to discourage distracted driving habits. According to Ryan Michel, Allstate Canada CEO, distracted driving accidents are increasing despite programs designed to reward law-abiding motorists.

Because every province now has bans against using handheld devices while driving, we must consider if the laws are tough enough and if people are abiding by them.

One solution may be for provincial governments (who have the authority to regulate driving) to take the lead in getting the message across.

Quebec’s Airbnb regulations: Will homeowners abide?

Although Quebec’s provincial government recently amended its tourist accommodation legislation to regulate people participating in home-sharing, some have doubts on how the law has affected this new service.

Under the law, anyone who advertises rental accommodations for no more than 31 days must purchase at least $2 million of insurance, as well as secure a $250 permit. According to one media source, less than 500 permits have been issued across the province—41 of those in Montreal.

To compare, it is important to note that over 10,000 units are listed on home-sharing websites in Quebec—meaning that renters are not purchasing the necessary insurance.

Users are finding loopholes in the law, making lawmakers realize the need to take a stance against the illegal activity. Because the modifications were only issued five months ago, there is hope that over time compliance will improve.

Why renter’s insurance is necessary

Many renters believe that they do not need insurance for their home, and that they are covered by the building owner’s insurance; however this is not the case. It is crucial for renters to purchase their own insurance, as the policy may help them out should they come across a variety of unfortunate events.

Though the landlord has insurance for the building, contents and liability their policy will not cover the renter’s personal property, and liability exposures. It is important to know the differences between your landlord’s insurance and your own.

If there is a fire in the building, the property insurance will pay for the demolition, and cover the expenses to repair or rebuild; whereas the renter’s insurance will cover all the contents in your unit in the case of a fire. This insurance will likely cover your additional expenses if you need a place to temporarily live while the damage is being repaired.

If there is a break-in, the landlord’s property insurance will not cover any of the stolen goods from your home. In most cases, your renter’s insurance policy will cover your possessions should you suffer a loss.

Also, if you caused a water damage loss by, for example letting a sink overflow, you could be liable to other renters and the landlord, affected by the water damage. Renter’s insurance would protect against claims brought against you.

No matter where you rent, insurance is much the same—your landlord’s property insurance is for the structure of the building, and the renter’s insurance covers your personal contents and liability. Renter’s insurance is available for a small monthly fee that ensures your protection from financial hardship should anything happen.

Why Turo’s insurance model could set a precedent for similar peer-to-peer sharing businesses

Peer-to-peer car sharing service Turo allows Canadians to rent their personal vehicle to others. The car’s owner receives 75% of the rental cost, while Turo takes the remaining 25% fee.

The company seeks to put underutilized cars to better use. It also provides an alternative for those who can’t afford to buy a car. The service launched in Alberta, Ontario and Quebec earlier this April.

Once its insurance model has been straightened out, Turo plans to go national with its services. If all provinces can agree on Turo’s insurance model, it could be a first for peer-to-peer sharing businesses.

Intact Financial Corp. currently has an agreement with Turo where users can be insured through two of Intact’s brands: Intact Insurance and Belair-Direct. Through this deal, all rentals are backed by $2 million in auto liability insurance.

Intact’s insurance model for Turo is similar to arrangements that other Transportation Network Companies have. If a registered car is being driven for personal usage, the owner’s personal insurance is in effect. When the vehicle is being delivered and rented, Intact’s commercial insurance provides coverage.

As the app grows, other insurers are expected to support Turo. In early July, La Capitale General Insurance and its subsidiary, L’Unique General Insurance, showed their support for Turo by allowing customers to use the service.

For more information on your policy’s coverage of Turo and other peer-to-peer car sharing services, contact your insurance broker or company agent.

Ontario Superior Court of Justice’s new rule: Insured cars taken without consent are uninsured

A recent case in the Ontario Superior Court of Justice has brought on a new precedent in the auto insurance industry. The ruling states that vehicles covered by insurance are considered “uninsured” if a car is taken from the owner without consent.

The case, Skunk v Ketash, 2016 ONSC 2019, asked the court to decide whether uninsured or underinsured coverage applied to a policyholder’s spouse when the vehicle had been driven without the owner’s consent.

The plaintiff, Skunk, was a passenger in her spouse’s car but her spouse was not present; the vehicle was actually being driven by Ketash (the defendant). The car got into a collision and Skunk was injured. While the defendant did not have insurance, the car itself was insured with Jevco.

Skunk tried to make a claim against Jevco, but was denied coverage as Skunk’s husband had charged Ketash with theft of the vehicle. The Superior Court agreed with Jevco, citing that a plaintiff cannot make a claim when a spouse owns the vehicle. For more details on the case, see here: http://www.insurancebusiness.ca/news/auto/insured-cars-taken-without-consent-are-considered-uninsured-ontario-superior-court-212071.aspx

The moral of the story? Vehicle owners need to be very cautious as to who uses their car. Be sure to contact your insurance broker or company agent for more information on how something like this can affect your policy.

The importance of flood protection in Canada

Did you know that flooding is the most frequently occurring natural hazard in Canada? And did you know that until recently, Canada was the only G8 country without overland flood insurance for homeowners?

Following the destructive floods we’ve seen in Canada, a new publication entitled, “The road to flood resilience in Canada”, shows that flood events in Canada can potentially trigger losses exceeding CAD 13 billion with less than half of those covered by insurance. This fact can have severe economic and social consequences for all concerned.

The report said insurance covered only about one-third of the economic losses suffered as a result of the Alberta floods and about $1 billion of the almost $1.5 billion in total losses from a flood that submerged roads, railways and basements in Toronto a few weeks later that same year.

The report not only analyzes the risks confronting Canadians, but what has to be done and what should be done to alleviate those risks. The report encourages the insurance industry to launch more effective product marketing effort towards consumers. In essence, all key risk management stakeholders should act together to better protect Canadians against this risk in the future.

For the full copy of Swiss Re’s report, click here

The sharing economy and technology will have a significant impact on the insurers

The sharing economy and technology will have a significant impact on the insurers

Changes happening in the digital world are having profound effects on the insurance industry. In a new world where the average homeowner can rent out their home on their own terms, use their personal vehicle for ride-sharing and travel in a self-driving car, there is a need for new insurance policies.  Is the insurance industry ready for these technological advances and the expansion of the sharing economy?

The insurance industry has proven to be adaptable. However the speed of technological advancements and changes are now exponential. There will be more change by 2025 than there has been in the past 50 years. All of these changes in the digital world and the sharing economy will continue to affect the type of insurance policies people require. Professor Jacques Nantel from HEC Montreal, has no doubts about the ability of insurers to adapt to the rapid changes in the technology and the needs of the sharing economy.

We will continue to watch to see how the insurance industry fares in the continually evolving digital world as the sharing economy expands.

If you’re planning on completing home renovations, make sure you update your home insurance

It’s important for homeowners to frequently check and update their home insurance policies in order to protect themselves from having insufficient coverage when disaster strikes. This is particularly important when it comes to home renovations.

Homeowners can find themselves in hot water if they do not inform their insurer of renovations, as changes to the property could render the policy void. Renovations also provide the opportunity to make additional improvements that can save homeowners some money on their home insurance in the long run. Items like a sewer backup valve or an alarm system may easily be installed if other work is being completed. In addition, it may be cheaper for you to make these types of money-saving additions when renovations are ongoing.

Even if a home isn’t undergoing a major overhaul, it’s still important to review policies annually to ensure they match the homeowner’s needs. For an informative article that was recently featured on CTV, click here.

Be sure to contact your insurance broker or company agent for more information on home renovations and how they can affect your policy.