In the past 5 years, have you ever been cancelled, declined, or refused coverage?"
Clients that have been cancelled for non payment may find themselves PAYING A LOT MORE for coverage at renewal.
Here's a few reasons to make insurance payments a priority.
Avoid getting picked last for kickball.
Fortunately Auto Insurance is regulated by the province, and if you pay the missing amount before your cancellation date there's a requirement to reinstate your coverage.
Once renewal rolls around though, that's when you'll see the additional costs.
Property on the other hand has NO REGULATION which means insurance companies don't HAVE to do anything... and the market is trending towards insurers NOT REINSTATING HOME POLICIES that have been cancelled for non-payment.
This leads to shopping for coverage elsewhere right away, and your options are often less attractive.
When it Rains, it Pours.
If you're able to get your insurer to reinstate your HOME policy, there's a good chance they may not offer monthly payment anymore.
PAYMENT IN FULL?!
If you decide to go elsewhere "since this is ridiculous" you're likely to have an even higher premium elsewhere since you've been removed from the WANTED list.
Understand What You Signed Up For.
An insurance policy is a 12 month agreement.
Tons of people end up getting cancelled for non-payment simply because they didn't know it they had to cancel it.
Some people will put a 'stop pay' on their payments rather JUST CALLING them to cancel it.
You accidentally push your future self off an insurance rating cliff.
The takeaway here is:
If you’re living paycheck to paycheck and you sometimes have to ask: "WHICH BILL IS GETTING PAID THIS MONTH?"
You can save FUTURE YOU some money by putting your insurance bill near the top of the pile.
What's a good deductible for my insurance?
If you've ever had insurance before, chances are you've heard the term 'deductible'.
Let's just go ahead and define it:
It's the amount of money a policyholder is responsible for in the event they make a claim on their policy.
WHY IS THIS IMPORTANT?
Well one reason is that DEDUCTIBLES are typically DIRECTLY RELATED TO THE COST OF THE INSURANCE POLICY.
The MORE money a person is willing to pay for a deductible, the LESS money an insurer usually charges for the policy.
Another IMPORTANT reason to care about your deductible is that you should MAKE SURE YOU CAN AFFORD TO PAY IT IF YOU NEED IT.
*So don't get carried away with $5,000 deductibles on your 2006 Honda Civic.
2 Deductibles - 1 Policy
There's nothing new about the idea of multiple deductibles in one policy.
Consider Auto Insurance being split into collision and comprehensive deductibles.
What's WORTH KNOWING NOW - Is how this has made it's way into both HOME INSURANCE and COMMERCIAL PROPERTY INSURANCE.
Many insurers will give you a $500 or $1,000 deductible on the house....but then require a $2,000 deductible for any WATER damages.
In some cases they may remove or limit coverage on certain types of damage altogether. Ex. Vandalism by tenants.
By PUSHING UP DEDUCTIBLES insurers hope to:
1) decrease the number of small claims being made.
2) ease the pressure of yearly premium increases.
3) make policyholders care more about AVOIDING losses altogether.
Don't apply a one size fits all approach here.
Some carriers offer GREAT price breaks for certain deductibles, and way less of a break on the next level up.
EXAMPLE: Home Policy costs $1000 a year with a $500 deductible.
That carrier may offer you $850 a year for a $1000 deductible.
(that's a solid price break if you're wondering)
Then $800 a year for a $2,500 deductible.
The last option is not as attractive in my opinion, but someone trying to minimize their yearly premium may feel differently. What is reasonable for one family to payout in the event of a loss may not be for another.
1) Understand what a policy requires of you if you need to make a claim.
2) Be comfortable paying the amount of a deductible if you need to.
3) Minimize the cost of coverage by figuring out what risk you're willing to carry.
CLAIM SCENARIO - Deductibles in action
FUN FACT: Did you know a deductible applies to the LOSS and not to a policy limit?
Example: Jewelry has a $5000 maximum payout on a policy and a $1000 policy deductible.
Policyholder 1 loses their $6,000 engagement ring while taking a ride on the Halifax Harbour Hopper. Lucikly they listened to a broker who helped them purchase a policy that included 'mysterious disappearance'.
Most consumers would probably do the math like this:
Maximum jewelry limit is $5,000.
LESS the $1,000 deductible = $4,000.
.....but that'd be incorrect.
The ACTUAL calculation takes a DEDUCTIBLE from the LOSS and THEN applies any policy limits.
- Deductible (1000)
In this case, policyholder 1 would get a $5,000 payout.
If the above has you feeling overwhelmed, talk with a broker.
Outsource some expertise.
EXCITING NEWS FOR CONTRAST INSURANCE
In late September Matt Davison of Contrast Insurance accepted a seat on the Board of Directors for the Insurance Brokers Association of Nova Scotia.
The Broker Association of NS (often referred to as "IBANS" for efficiency) is celebrating it's 70th Anniversary this year and we're honored and excited to help the association meet and exceeds its goals.
What is IBANS?
'IBANS' is the Broker Association specifically for NOVA SCOTIA.
There's also 'IBANB' (NEW BRUNSWICK) 'IBAN' (NEWFOUNDLAND) 'IBAO' (ONTARIO) and the list goes on. Each province has specific issues and legislation to deal with, so they have their own regional associations all of which roll up under the NATIONAL BROKER ASSOCIATION 'IBAC' - The Broker Association of CANADA.
While you may not be too familiar with IBAC it's likely you've seen their TRADEMARK BIPPER LOGO around. Last year he underwent a very Barry Bonds like transformation. Don't believe me? You be the judge.
Here's a BEFORE and AFTER:
Setting the jokes and baseball aside IBAC is doing a great job laying out the benefits of buying coverage through a broker and promoting the #BrokerAdvantage.
Here's one of their ad spots from their recent 'BEFORE THE QUOTE' campaign:
We're really excited and proud to be a part of the IBANS team, and look forward to helping in any way we can.
Thanks for reading.