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.
Take back your glovebox in 2019
Stop digging through the pile of napkins and receipts...only to find expired pink cards. Nova Scotia allows drivers to provide digital proof of insurance and it's available now.
and it's excellent.
Brokers who use MyProof can send you a secure email and in a few quick steps you'll have it on you wherever you go.
STEP 1 - Hop on your phone and open up that email.
STEP 2 - "CLICK TO DOWNLOAD AUTO INSURANCE CARD"
Which looks like this:
STEP 3 - "ADD" to wallet.
Adding the Proof of Insurance to your phone's 'digital wallet' let's you access it without an internet connection or cellphone signal.
It works just like a boarding pass...and if you haven't been brave enough to use one of those yet, let me take this moment to FULLY ENDORSE IT. You're missing out.
*For those not familiar a 'Digital Wallet' comes pre-installed on i-phones, and is available for download on your devices specific app store. Once you have a card in your wallet it stays there until you delete it.
The Digital Pink card does still have the year to year limitation, but it's a good reminder to take a look at your renewal with your broker and update it.
HERE'S A VIDEO THAT LETS YOU SEE IT IN ACTION.
The video mentions PRIVACY and LOCKING your phone when presenting your Pink Card. A valid point that needs addressing.
In order to feel comfortable passing your phone to a stranger you should activate what's called "Guided Access" on your device. It allows you to lock your screen within applications and restricts access to other parts of the device. It's handy for this exact reason, and also to let kids handle your phone without calling someone or buying something.
At the risk of becoming a tech-blog, here's a quick map for activating GUIDED ACCESS on i-phone and Android devices.
Believe it or not, allowing Electronic Proof of Auto Insurance was new in 2018.
What's more impressive is that Nova Scotia was the first province in Canada to allow it.
Look at us!
I don't think the paper pink cards are going away anytime soon, but I'd like to think at least once...this comes in handy for someone at a police checkpoint.