Insurance Questions People Never Ask Until Its Too Late

Guest Contributor August 10, 2016

Insurance can be confusing, and we don’t always know what we need, what we don’t need, or if we’re covered in what situation. Don’t we all know that one person who found themselves in a terrible situation because they didn’t have insurance?

We asked Peter Karageorgos, the Director of Consumer and Industry Affairs at the Insurance Bureau of Canada, some of the more common insurance questions people often don’t know the answers to and don’t ask until it’s too late.

Do I need apartment insurance (also known as “tenant insurance”)? “Yes,” says Karageorgos. “One reason you need tenant insurance is for your belongings.” If there’s a fire and all your personal property burns, it’s your responsibility to replace it, he explains. “Not your landlord’s, not someone else’s. That’s your stuff. So are you able to replace everything from clothing to furniture to dishes, towels, sheets and all sorts of other items?”

He goes on, “Another valuable coverage that people often don’t even think about is, if something were to happen and the building was uninhabitable, where would you go? Additional living expense coverage, if you had to find a hotel or rent another place, that coverage is available on a tenants’ policy as well.” Karageorgos points to the victims of the Fort McMurray wildfires as an example. “There was an evacuation order and some of those people went back home and had minimal if any damage to their properties, but for a month they were forced to live outside of their homes.”

But what if the fire is caused by, say, faulty wiring, and it was the landlord’s fault? “Well,  you still have to determine fault and they may say, ‘Yes the wiring was faulty but that’s the fault of the electrician who’s now out of business, or retired, or we can’t find him. Going back through to find a responsible party may be challenging, if not impossible.” And then, says Karageorgos, even if it is the landlord’s fault, their insurance company is going to ask that you prove the amount of property you claim you lost. “And that can take a very long time. It could potentially go through the court system. To help you resolve things and get back on your feet quicker, insurance is good to have.”

If someone falls on the sidewalk outside your house, can they sue you? Yep, says Karageorgos.
“If someone falls on your sidewalk, if someone trips on an area rug, if you have a visitor in your house and they have too much to drink and they fall down the stairs, if it occurs on your property, you might be sued.” (Interestingly, I have no idea if the sidewalk is my property.) But to make a claim, they would have to demonstrate that it happened because of something you did or didn’t do – didn’t stop serving them alcohol, didn’t shovel the walk, etc. Here is where liability insurance will protect you, says Karageorgos, and this is included in your home insurance or tenant insurance package.

What if it’s the landlord’s building but my responsibility to clear the walk and someone slips? “You could be liable. If I hurt myself, I may sue the landlord, I may sue the person who invited me over, I may sue everyone because I don’t know who’s got deep pockets. Often what happens is many different parties are brought into a lawsuit because the person is hoping that one of the parties has insurance.”

Sure, we sue fewer people in Canada than they do in the US. But it happens. Make sure you’re covered for a worst case scenario. Ask the right questions. Get the answers. You should be OK.

If you lend your car to someone are they covered by your insurance? Yes, says Karageorgos. “If you’re lending your car, you’re also lending your insurance. If they have a claim where they’re at fault it’s going on your record.”

If you’re in an accident and it’s not your fault, do your premiums go up? No, says Karageorgos. “If it’s a not at fault claim, your premiums should not be affected at all.”

Need more information or looking for a quote for auto, home, travel or your pet, click here or call 1-888-250-1890.

by Elizabeth Bromstein