August 2005 Archives

It is disenchanting when you find out, contrary to your expectations, that a loss is not covered because of a policy exclusion. Policies contain many exclusions as a means of defining coverage intent.

But what may be even more disturbing is having your coverage denied because of a breach of a policy warranty; one that was never explained to you. Your policy may contain a warranty which outlines conditions precedent. What this means simply is you must meet certain obligations while the policy is in force in order to maintain coverage. A breach of a policy warranty could void your coverage ab initio (from the beginning) for a loss arising from this breach.

Two of the more common warranties found in property policies relate to theft, namely Burglary Alarm Warranty and Locked Vehicle Warranty. Theft is a typical covered peril. However, with the inclusion of these warranties, you must maintain prudent loss control measures to protect your property from theft in order to obtain coverage benefits . Let's look a little closer?

Many feel travel insurance is worth the cost

MISSISSAUGA, October 15, 2003 - An RBC Insurance/Ipsos-Reid study shows that while 84 per cent of Canadians believe buying travel insurance is worth the cost for their peace of mind on their vacation, only 60 per cent of people who travelled outside Canada or the U.S. in the past three years actually purchased travel insurance.

"Emergencies can happen at any time, even to the most well-prepared traveller," said Stan Seggie, president and CEO of the travel insurance division of RBC Insurance. "Travel insurance is designed to provide coverage for everything from trip cancellation and interruption to emergency medical assistance and baggage loss. It can really help ensure one bad experience does not ruin your trip or leave you with extensive unforeseen costs to cover."

Most teens spend months counting down the days until they can drive.

While they see only the possibilities, parents are also aware of the responsibilities anyone takes on when climbing behind the wheel of a vehicle.

The ICBC difference

Most other insurance companies charge some of their highest rates to young drivers. Even if teens only drive their parents' car occasionally, the parents get hit with a noticeable increase in their insurance costs.

At ICBC, youth, sex and marital status are not used to determine your premium level. Every new driver, whether 16 or 56, will start out paying the base premium level when insuring a vehicle.

If unexpected expenses come up and you can’t pay your life insurance premium, you should know the possible consequences. The effect depends on the type of policy and coverage you have and the policy terms and conditions.

Term: If you stop paying premiums, your coverage lapses.

Permanent: If you have this type of policy, you will have the following choices:

Cash out the policy.
This means that you can stop paying the premium and collect the available cash savings. You will no longer be covered by life insurance, but you will at least save some of the proceeds of the policy. You may, however, have to pay taxes on some of the cash value if the sum exceeds what you have paid in premiums.

Non-forfeiture options
There may be a “reduced paid-up” option. This means that you can stop paying premiums completely in return for a reduced death benefit and no cash saving. You may also be able to convert the permanent policy to an extended term policy for a time period based on the accumulated cash savings in the policy.

I.I.I. Provides Tips for Purchasing Travel Insurance

NEW YORK, August 9, 2005 - Travel insurance provides financial protection for pre-paid vacations in the event of sudden illness, a catastrophic hurricane or even a terrorist attack, says the Insurance Information Institute (I.I.I.).

“If a hurricane destroys your vacation destination, you can purchase insurance coverage to protect your financial investment in the trip,” says Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “There may also be coverage if there is a terrorist incident within 30 days of departure to the city you are traveling to or the city where you are departing from, travel insurance will provide financial protection.”

Policies can also provide insurance protection if you need to cancel your trip in the event you are seriously injured or the cruise or tour operator goes bankrupt. Specific travel related coverages can be purchased or bundled together as a package, points out the I.I.I.

Following is a list of the three major types of travel insurance:

Trip Cancellation Insurance

This reimburses you if the cruise line or tour operator goes out of business. It also provides coverage if you have to cancel a trip due to sickness, a death in the family or another type of disaster listed in the policy. In addition, if you or an immediate family member become seriously ill or injured during the trip, most policies reimburse you for the unused portion of the vacation. Often this type of coverage also provides protection if your baggage is stolen. The cost is generally five to seven percent of the price of the vacation, so a $5,000 trip would cost roughly $250 to $350 to insure.

Trip cancellation insurance is very different from the cancellation waivers that many cruise and tour operators offer. Waivers are relatively inexpensive, costing approximately $40 to $60. They provide coverage if you have to cancel the trip, but they have many restrictions.

For example, waivers must be purchased when you book the trip and they will usually not cover you immediately before departure (the time period during which most people cancel) or after the trip has begun. Most importantly, waivers are not insurance. Cancellation waivers are not regulated by the state department of insurance, so if your tour or cruise operator gets into financial difficulty you may not be able to collect.

Emergency Medical Assistance and Evacuation

This provides insurance and medical assistance for travelers. For example, it would cover you if you had to be airlifted to a hospital due to a hiking accident, or if you had to stay for a prolonged period of time in a foreign hospital. It also provides coverage if you get seriously sick or injured and need to be flown to a better medical facility than is available where you are vacationing.

Before purchasing this type of coverage, check with your own health insurance carrier to find out what type of coverage you already have when traveling abroad and whether there are any limits. Also, ask if the policy will pay to fly you home or to a country with first-rate medical care.

Accidental Death

This provides a variety of coverages if you or a family member die on the trip. Generally, if you have a good life insurance plan or have made other financial provisions for your loved ones, this may be duplicate insurance, so check that you actually need it before purchasing accidental coverage.

“Before purchasing travel insurance, it is very important that you understand what disasters are going to be covered,” says Salvatore. “You need to ask yourself why you need the coverage. For instance, if your primary concern is that you may get sick or injured prior to the trip or after the trip has begun, make sure you understand how you would be reimbursed for this type of situation.”

The I.I.I. also suggests that you ask the following questions before purchasing travel insurance:

Is the travel insurance company licensed by the state insurance department where I live?

What disasters are covered and are there any restrictions?

Do I have coverage through a credit card or another insurance policy?

What type of assistance does the insurer provide in the event of a medical emergency or other disaster?

How is the reimbursement determined?

You can purchase travel insurance from a travel agent or directly from an insurer that specializes in this type of coverage.

Click here for more information on travel insurance.

The Insurance Information Institute is a non-profit, communications organization supported by the property/casualty insurance business. http://www.iii.org/.

The Use of Anti-theft Devices in BC
Auto crime continues to be a major concern for BC drivers. Over the past few years, ICBC has encouraged the use of anti-theft devices to deter theft of vehicles, theft from vehicles, and damage caused by vandalism. Corporate Research has tracked the use of anti-theft devices and has researched driver attitudes towards auto crime.

How Big is the Auto Crime Problem?
British Columbians received a wake-up call in 1996, when it was revealed that the theft rate of vehicles in our province was 60% higher than the national average. As well as a high financial cost attached to these statistics, there was a high personal cost in terms of inconvenience and trauma to more than 22,000 victims. ICBC responded to the problem, and developed the Auto Crime Strategies Program aimed at encouraging people to reduce their risk. Since 1996, the number of auto crime claims has decreased. However, crime still costs policyholders a lot. The total claims paid out for auto crime in 1999 amounted to $134 million.

You should review all of your insurance needs at least once a year. If you have a major life change, you should contact your insurance agent or company representative. The change in your life may have a significant impact on your insurance needs. Life changes may include:

Marriage or divorce

A child or grandchild who is born or adopted

Significant changes in your health or that of your spouse/domestic partner

Taking on the financial responsibility of an aging parent

Purchasing a new home

A loved one who requires long-term care

Refinancing your home

Coming into an inheritance

If you're running a business from your home, you may not have enough insurance to protect your business equipment. A typical homeowners policy provides only $2,500 coverage for business equipment, which is usually not enough to cover all of your business property. You may also need coverage for liability and lost income. Insurance companies differ considerably in the types of business operations they will cover under the various options they offer. So it's wise to shop around for coverage options as well as price.

Regardless of the type of policy you choose, if you're a professional working out of your home, you probably need professional liability insurance. Some types of in-home businesses, such as those that make or sell food products or sell home-made personal care products, may have to buy special policies.

To insure your business, you have three basic choices, depending on the nature of your business and the insurance company you buy it from. They are:

Your agent will ask you what kind of home you own or rent, roughly how much your possessions are worth, and what kind of liability coverage you will need. The agent will also want to know how many people live in your household, what pets you own, and the general condition of your house. You should also tell him if you own any particularly valuable items that might need special coverage called a floater.

Professionals that operate their own businesses need professional liability insurance in addition to an in-home business or businessowners policy. This protects them against financial losses from lawsuits filed against them by their clients.

Professionals are expected to have extensive technical knowledge or training in their particular area of expertise. They are also expected to perform the services for which they were hired, according to the standards of conduct in their profession. If they fail to use the degree of skill expected of them, they can be held responsible in a court of law for any harm they cause to another person or business. When liability is limited to acts of negligence, professional liability insurance may be called "errors and omissions" liability.

Professional liability insurance is a specialty coverage. Professional liability coverage is not provided under homeowners endorsements, in-home business policies or businessowners policies (BOPs).