FAQ: What is the difference between an insurance agent and a broker?An insurance agent is an employee of an insurance company that sells insurance directly to the consumer (direct writer). Their mandate is to represent the insurer. An insurance broker deals with a variety of insurance companies and a broker's mandate is to represent the client and to find the product best suited to the needs of their client.
FAQ: Do I pay more when I deal through (it matters to some readers) a broker?Although some direct writers have been able to reduce overhead by streamlining their operations and developing call centers, they still have a sales force. Insurers selling thru brokers do not have a sales force, however they do pay a commission to the broker. Insurer's overhead (whether a direct writer or using the broker distribution network) range between 20% and 35%. Statically it has been proven that you would have an equal chance of finding your best package through a broker as you would a direct writer. Given that the broker has access to many companies under one roof, it is quicker to obtain more quotes thru a broker.
FAQ: Do I pay more for my insurance because I am not a resident of Quebec?No, however the number of insurers willing to quote is less compared to a Quebec resident. Due to the fact that driving information, insurance claims and moving violations are monitored by the Quebec drivers permit non-residents who do not have a Quebec permit will have access to only a few insurers willing to provide quotes. Another problem is that insurance premiums are information based and often it is difficult to access information on out of province clients. As a result of this, we recommend that all our clients obtain reference letters of experience from their domestic insurer to help us obtain the maximum credits possible. With some companies, this letter of experience is mandatory.
FAQ: Insurance seems very expensive in Quebec compared to what I am accustomed to paying. Why is that?Oranges that are shipped from the same grove in Florida to various outlets around the world may have subtle differences in price. As consumers we understand the basic principles of supply and demand, and in the case of shipping oranges, the cost of shipping. We would assume the closer we get to Florida the cheaper the orange. Insurance is not a commodity, it is a risk transfer. Although some insurance carriers may say their policy (product) is better than that of a competitor, for the sake of this exercise let us assume that the risk transfer is the same. So why do costs for the same risk transfer in Montreal, Toronto, Miami, London, differ so much? The answer my friend is not blowing in the wind, it lies in the results of many years of actuarial compilations. In a nut-shell, it boils down to statistics. Insurance companies compile data that allows them to ascertain a cost to accepting a risk transfer in which they know they will pay out claims, and make a little profit. As a general rule insurers want to pay out no more than 65% in claims, while the remaining 35% is to cover their overhead, their administration, commissions and a little profit. Premiums are therefore based on this general principle regardless of where you are. From our personal experiences, regardless where we reside, I believe there are some risk transfers that we all understand as to why they have variances in cost. I am sure that there are areas in London England where you would understand why the same house would cost more to insure because of the neighborhood compared to another area of London. It could be a question of crime rate, age of buildings, construction of buildings, congestion, upkeep, fire protection, and police surveillance. You would probably understand why the 50 year old women who never had a claim would pay a little less on her insurance when compared with a young 20 year old man with the same vehicle, and living in the same neighborhood. If you would speak to an actuary for an insurance company in England he or she would be able to rattle off statistical information that would explain the rates on all types of risk transfers. You would be surprised what factors they tie in to risk transfer (a topic for another day). Can this statistical information be extrapolated and used elsewhere? Obviously not. The basis of this information is to allow for an insurance underwriter to pin point a risk as precisely as possible and to attach a premium to the risk. If an insurance company has statistical information confirming that over the last 30 years 1 in every 15 houses in a certain neighborhood claims each year, and that the claim is about $4,300, do you think this has weight when compared to another neighborhood where the risk may be 1 in 10 and the average claim $7,000? Property insurance in Quebec is higher when compared to Ontario. Property insurance in the United Kingdom and in the United States is less expensive than in Quebec. Liability insurance and automobile insurance is cheaper in Quebec when compared to Ontario. Commercial liability insurance in Canada is cheaper when compared to the United States. This may all be true; however, as explained previously, the reasons are based on the claims history and companies trying to keep the losses at 65% of their sales. In Quebec, because of our no-fault automobile insurance program that prevents bodily injury claims against insurers, results in our auto insurance being less expensive when compared to other provinces and countries. There are so many reasons as to why insurance premiums may vary as they do. Some countries have a larger pool of contributors (such as in the US and the UK) and the payout exposure is higher depending on the country. Take liability insurance as an example. If insurers are highly exposed to large liability claims due to the nature of the laws in any given country, then obviously the cost for such insurance coverage will reflect this. New judgments rendered by the courts will have a direct impact on insurance premiums. Some countries have houses that on average have been around for many years and built of stone while others are made of wood and most do not have fire hydrants. One thing for sure, regardless of where the risk is, insurance companies rates are based on results of payouts of this risk over time. If we improve our fire protection services and reduce the level of major claims will this drive the premiums down? Of course it will.
FAQ: Do I need liability insurance for my property when the Homeowners Association has coverage?Yes you still need personal liability insurance to cover the private portions of your property. The Homeowners Association, or co-ownership, has a master policy that is limited to covering the co-owners regarding the common portions only. The co-ownership agreement normally has a clause indicating the level of private liability insurance they request from the co-owner.
FAQ: Can I cover the liability and my property in Quebec on my main home insurance?Depending on who insures your main home, you may be able to extend the liability to cover your property in Quebec, and in some instances add the property as well. There are territorial and legislative issues however we recommend that you speak to your broker or agent to see if this is possible.
FAQ: Can you insure me with the same insurance company as I have in my country/province?We have access to all insurers registered to do business in Quebec AND which operate through the broker network. Depending on your case, we can always approach your main insurer to see what they can offer; in some cases it becomes advantageous.
FAQ: Who insures my house during the construction phase?There are 2 options available to cover your house while it is being built. A builders risk in the name of the contractor on commercial paper taken out by the contractor or a COC (course of construction policy) in your name on personal lines paper. A commercial builder's risk policy covers the cost to the builder plus administration as well as you and your costs incurred during the construction. This policy is limited to property therefore does not cover your liability. You may INQUIRE (sp) with the contractor the cost of including liability if you do not have a separate liability policy already in force covering the building site. The coverage could be confirmed by a separate policy or a certificate on a blanket basis. This policy is limited to the construction period. A COC policy covers your property as well as your liability for a one year period including the building phase. The rates are based on a hybrid of combining the building portion phase with that of the finished phase. This policy can be modified to cover the building materials owned by the contractor if need be. Which is less expensive?In some cases you may not have an option as to which policy you opt for as a contractor's commercial builders risk policy is issued by the insurer of the general contractor. If you become the GC of the project, then a COC is your only option. If you do have an option, depending on the insurer of the general contractor and the duration of the construction period, prices vary. I recommend that you obtain both quotes and make your decision accordingly. Which offers better coverage?There are some C0C polices out there that do not cover vandalism, our does. Sewer back-up coverage during construction can be added to a C0C but it is normally included with a commercial builder's risk. The main difference is regarding the named insured. A commercial builders risk is in the name of the contractor, which by default covers the homeowner, while the COC policy is in the name of the homeowner. We can modify the C0C to cover the contractor regarding the property (materials) that are on the building site, yet not as yet installed IN the house. Following claims, cheques are made payable to the named insured on the policy along with any party having an insurable interest.
FAQ: If I rent out my property do I need commercial insurance?There is a difference between rented property and short-term rental. Some insurance companies refuse to cover properties that have many tenants over a one year period, and in some instances consider the risk as commercial. We strongly suggest that you make sure that your insurance company is aware of the risk, and obtain written confirmation. We have specialized markets that insure these types of risks.
FAQ: Why should I get a confirmation that short-term rental is accepted by my insurer.Due to the high demand for cottages, secondary residences and condos by tourists, short-term rental has become very popular. Regardless of who insures you, if you are involved in short-term rental (declared or not) you must declare this to your insurer as it is deemed an aggravation of risk. One common misconception I often hear is: "my policy that covers my cottage or secondary residence will still cover me if I rent it out once in a while to friends, people in the office, or put it in a rental pool". Perhaps this may not be correct and it is not following a claim that you want to test the value of our contract. Make sure you advise your agent or broker if you are involved in short-term rental. In Quebec the civil code allows for an insurer to underwrite a risk after a claim and use this information to limit its payout or completely refuse a claim.
FAQ: What can I do to reduce my insurance costs?Speak to your broker or agent, depending on the type of policy you have their may be methods of reducing your premium, such as having a residential alarm installed. For some of the higher end houses, one way of getting a reduction is having a dry hydrant installed. You may want to speak with the local fire department to see if this is feasible. The most common dry hydrant is a 6" pipe that has been fitted with proper adapters to allow the local fire department to have access to water year around. The pipe runs from your property into a reservoir or lake. In some cases an indoor pool can also be used (depending on the NFPA standards based on the size of the house and the pool capacity).
FAQ: Are all alarms the same?No. Some insurance companies will either require or give additional discounts if you install an alarm system with a dedicated line (DVAC). In some cases cellular back-ups are acceptable as well. On a standard installation, if the telephone line is severed before the house is entered, the alarm warning is only local and the central station will not be aware the house has been broken into. A DVAC system, will give the central station a warning that the telephone line has been cut, and subsequently react as a potential break and entry and advise the local authorities accordingly.
FAQ: What value do I insure my residence for?Insurance companies are interested in knowing the cost of rebuilding your house, in today's market, in today's prices. In other words two identical houses built by the same contractor at the same cost should have the same reconstruction cost. If one is sold at a higher price because they have a larger lot, or is on the lake, this has no bearing on the reconstruction cost of the house. Municipal evaluations, real estate values and insurance values should be treated separately. Most insurance companies will settle claims based on "replacement cost of similar materials", however we do have specialized companies that will consider the replacement cost of "the same materials". Please make sure which coverage you have. | 
