Insurance corner: what you need it for

Insurance is a unique product that most people have difficulty in seeing value. You pay premiums every year and receive back mountains of paper that is boring to read and hard to understand. Most people feel the pain of paying premiums and quickly file their insurance documents in a place out of sight.

Insurance is necessary as most individuals or businesses are unable to withstand the financial consequences of a significant loss to their property or the cost to defend and pay a judgement should a legal action be taken

against you for your alleged negligence. The law also requires having insurance for cars and other vehicles. When you buy insurance you are essentially transferring the chance of financial loss caused by an insured peril to an insurance company. In return the insurance company receives payment for assuming the financial responsibility for your losses according to the terms and conditions of the policy.

Insurance companies in Canada pay billions of dollars in claims every year. They may refuse to pay a claim if there has been a material change in risk, which is any change

within the control and knowledge of the insured which increases the chance of loss and arises after the coverage was bound. For example a residential garage was converted from personal use to a woodworking business and as a result of the business the building burns down or a liability claim occurs. When a material change in risk is reported to an insurance company, the insurer may continue offering coverage advising the client if an additional premium is required or the insurer may decide to cancel the policy giving the client proper notice. Advise your insurance provider

immediately if you start a business in your home, bring in a boarder or tenant, install a swimming pool or wood stove, move out of your home, rent it to a third party or leave it vacant, use your personal vehicle for business/commercial purposes. For business owners immediately advise your insurance provider if there are any changes in the nature of your operations, new location or change the name of your business. These are just some examples of changes that may effect your policy. Avoid a problem before it happens make your insurance provider aware of any material change in risk.

This article is for information purposes only. Please check with your insurance provider to verify that you are properly insured as policy wordings may differ from one company to another. Mark Guergis , CAIB

Registered Insurance Broker

Aim Insurance Brokers Ltd. 705-431-5622

General insurance brokers with offices in Innisfil and Angus. We will provide material from within our office and other members of the industry to hopefully help you have a greater understanding of home, auto, and business insurance products.