Home Insurance in the Montreal Area - Car Insurance in the Montreal Area - GENERAL INSURANCE BROKER - RONALD WILLIAMS (RWI)- INSURANCE BROKERS - COURTIERS D'ASSURANCE

Someone backed into the door of my three-year-old car and dented it. I had the damage appraised, and then took the car to a body shop for repair, as my insurer advised. I was furious to find out afterward that the body shop had replaced my door with a used one. As if that's not bad enough, the paint on the replacement door isn't an exact match with the rest of the car. I think my insurance should pay to have the car repainted to match the door, but the company refuses. Why?

-- Off-color bloke

I can understand why you're red with anger, but this is an open-and-shut case. There is a "repair and replacement" clause in your automobile insurance policy that says the insurer has the choice of repairing, rebuilding, or replacing a damaged part. Naturally, it will opt for the most cost-effective way to return your car to the condition it was in before the accident.

If the part is too badly damaged to be repaired or rebuilt - like your door - then the insurance company will replace it. However, it is obligated only to replace the part with one "of like kind and quality." In the case of your three-year-old car, that does not mean a new door, but rather, a used one similar in condition to the one you had. Remember that your insurance is intended to put you back to the way you were before, not to replace older parts with new ones. If that were the case, you would be profiting from your insurance, and we would all have to pay much more for our insurance premiums.

But if you insist on getting a brand new door, that is your option, as long as you pay the difference in cost. The same holds true if you want your entire car repainted.

Should your car be a write-off - in other words, it's too badly damaged to be repaired at all - the insurer will pay you actual cash value for it. The value is based on the amount you could have received if you sold the old car the day before the accident.

So, while you may believe you were steered in the wrong direction, your insurer really did come through in the crunch!

Note: Remember, policies vary, so when in doubt, consult your insurance representative.

Insurance Bureau of Canada conducted a national poll and a series of focus groups across Canada in the fall of 1996 to assess the level of knowledge and understanding about home and car insurance. While Canadians have a basic understanding about certain aspects of insurance, fundamental misconceptions exist about the language of insurance, how insurance works, and how to make an informed decision about which coverage is best.

Polling results revealed:

The columns are designed to answer to these misconceptions.

The Insurance Bureau of Canada is the national trade association representing the private property and casualty insurers who protect your home, your car and your business.

If all my belongings were destroyed in a fire, how would the insurance company know what I owned so that it could replace them?

-- Puzzled Policyholder

Insurance companies aren't psychic - they don't know exactly what you own. But YOU should - for your own protection.

Here's a quick test: list the exact contents of your bedroom closet without peeking. Not so easy, is it?

If you were so unfortunate as to suffer a total loss - as in a fire - could you remember all those books and CDs on your shelves? How about the gadgets in your kitchen drawer? Or the dishes in your china cabinet? The list goes on . . . and on. Individually, these kinds of items may not cost a great deal, but they sure would add up if you had to replace them all. Your insurer would likely ask you to fill out a "proof of loss" form, which would require a complete list of what was lost or damaged, the value of each item, and the amount being claimed. That's why you need to keep an accurate record of what you own.

Some people keep track of their possessions by making a drawer-by-drawer, room-by-room video recording; others use a regular camera. An audiocassette recorder is useful for making a spoken list of collections like books, tools, stamps, and so on. Written or typed descriptions are another option. In all cases, be sure to include makes, models, serial numbers, or other identifying marks. And since most home policies today offer "replacement cost" on contents, it helps to have the most complete details possible so you can replace each item with one of "like kind and quality".

When it comes to higher-value items, like major appliances, art or furniture, the insurance company will ask to see a receipt or other proof of purchase.

Make sure you store your receipts and inventory records in a safety-deposit box or another secure location AWAY from your home. It's a good idea to keep negatives there too, so that the insurer could reproduce your precious photo albums if the originals were damaged.

Don't wait until you suffer a major loss to take inventory of your possessions, or you'll have to take that closet test - for starters - all over again!

Dear Paula C.:
My husband died recently, and I'm wondering what to do about his insurance. He owned a car, and the house policy is in his name. Will the insurance cover anyone else who may be driving the car? Is the house still covered?
--Wary Widow

Dear Wary:
I'm sure you have many arrangements to take care of right now, so let me ease your mind just a little by telling you that your husband's home and car insurance needn't be at the top of the list. That said, it is important that you inform the insurance company as soon as you can - a simple phone call should do the trick.

In the case of your car insurance, you should have your husband's executor put the policy in his estate. If the executor chooses to cancel the policy before it is due for renewal - in the event you sell the car, for example - the insurance company will refund whatever portion of the policy was not used, less a penalty for early cancellation. In the meantime, if friends or family members are driving your husband's car, they will be covered, if they are doing so with the consent of the executor.

Your home policy may require more immediate attention. If both you and your husband were named on the policy as "insureds," your insurance would simply continue as before. However, since, as you say, your husband is the only named insured (even though you are also covered under that policy), you should inform the insurance company as soon as possible and request that the policy be changed to your name or the estate of your husband. It's a simple procedure to do so, but it doesn't happen automatically - you need to set the wheels in motion.

After all, an insurance policy is a personal contract between the person (or persons) named in the policy and the insurance company. If that person dies, then, theoretically, the contract ends. In reality, it's not so cut-and-dried. Since you were already living in the house and insured under the policy, most companies would continue your coverage, at least for a period of time until you could make the necessary change.

The bottom line: Don't assume you're automatically covered. Notify your insurer as soon as you reasonably can to make sure the policy will continue. If you can't do so immediately, be sure to add it to your "to do" list.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
My daughter is going away to college this fall. Will she still be insured under our homeowner's policy?
- Almost Empty Nester

Dear Empty Nester:

Although your daughter will soon be flying the coop, your home insurance will make the trip with her.

Basically, your homeowners, condo unit owner's, or tenant's package policy covers, not only any members of your family who are living in your household, but also anyone under 21 who is in the care of the person(s) named on the insurance policy.

It also covers students - like your daughter - who are enrolled in and attending a college or university, and who are dependent on the named insured or his or her spouse for support and maintenance. So your daughter doesn't have to be living in your house to be covered, as long is she is only "temporarily" away at school. She must also be dependent on you for support - probably an easy condition to fulfill, as most parents would agree! But should she decide to spread her wings and go out on her own when her studies are completed, your insurance will no longer cover her; she will need to buy her own policy.

Be sure to ask your insurance provider before she leaves what the overall dollar limit is on any personal property she is taking with her or may acquire while she is away. If she is bringing any valuables, like jewelry or computer software, for instance, she may need additional coverage.

The best advice: take a lesson from your insurance provider first, and your daughter will head off to college with an "A" in Insurance 101!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
I baby-sit five days a week in my home for a couple of neighbours. Now I'm wondering if I need special insurance, in case one of the children injured themselves while in my care and the parents sued me. Would I be covered under my home policy?

--Concerned Caregiver

Probably not. Your home policy likely excludes (does not cover) "claims arising from business pursuits or any business use of the premises."

"Business," as defined by the insurer, means "any regular pursuit undertaken for financial gain, including a trade, profession, or occupation," whether it be at your house, your neighbour's, or the local park, for that matter. Generally speaking, if you baby-sit on a regular basis, as you do, and are paid to do so, as I assume you are, then you would likely not be covered for liability under your home policy.

It would be a different story if you were simply helping out in a pinch; or if you and your neighbour exchanged baby-sitting services but not money. In those situations, you would probably be covered under your home policy.

If your teenage children were doing some part-time baby-sitting, they would also be insured, because your home policy covers the "temporary or part-time pursuits" of an insured person under the age of 21.

But in your case, you should advise your insurance provider about your home business, and request that he or she insert an acknowledgment in your policy that you are covered for liability arising from your baby-sitting service. It's neither complicated nor expensive, and it's better to be safe than sorry.

As a general rule of thumb, if you mean business, you probably need additional coverage. So look after your insurance needs before you look after kids in your home.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

(based on an article by Robert de Michiell-March 1999)

A few minutes is all it may take for your home to become engulfed in flames. To prevent such a catastrophe
follow these basic safety guidelines.

Install a smoke alarm on every floor of your house and in every bedroom. test your alarm once a month and change the batteries at least once a year or as directed on the package.
Don't smoke in bed
Practice an escape plan from every room and decide on a meeting place outside your home
Store a portable fire escape ladder in every upstairs bedroom
Keep a fire extinguisher in the kitchen, basement, and upstairs hallway.
Put important documents such as your mortgage papers, stock certificates and an inventory of your contents in a fire safe or flame resistant chest or file. You could also keep them in a safe deposit box.

Carbon Monoxide Poisoning
Invisible and odorless, carbon monoxide (CO) is a deadly gas that causes approximately 1,500 accidental poisoning deaths and more than 10,000 injuries per year according to the Journal of the American Medical Association. Since the symptoms of CO poisoning mimic the flu (headache, fatigue, nausea, dizziness), many more cases are probably misdiagnosed, notes Lily Kuntz of First Alert, a manufacturer of home safety products.

Carbon monoxide can build up if a gas appliance , such as an oven or clothes dryer, or an oil furnace, fireplace or water or space heater malfunctions or doesn't have proper ventilation. Also, says Kunz, "An exhaust fan in the kitchen or an attic fan can cause the air pressure in your home to change. Dangerous CO that normally exits the home safely through chimneys may get pulled back in and cause a down draft, a hazardous condition." Car exhaust fumes can also seep into your home if the ignition is left running in an attached garage- even if the garage door is open. For protection , buy a carbon monoxide detector for every floor of your home; make sure one is outside your bedroom. OR buy a combination smoke alarm and carbon monoxide detector. Check your local hardware or housewares store.

Burglars
To make your home a safe haven from theft, follow the common sense advice below:

Keep doors and windows locked whenever you leave the house, even in a low crime area.
When you are going on a vacation, ask a friend or neighbour to pick up your mail and newspaper and to keep an eye on the house. Or have your mail and newspaper deliveries temporarily suspended.
Use timers to turn lights and the TV or Radio on and off intermittently during the day, when most burglaries take place.
Advise local patrol units that you will be away, they may be able to keep an eye on the home for you, such as your local town security.
Have an alarm installed and have it monitored by a central station.

If you have any questions please or email us at rwi@rwi.ca

Home and property owners should take precautions to protect their belongings from potential water and flood damage that may occur as warmer temperatures and rain threaten to melt the latest heavy accumulation of snow, Insurance Bureau of Canada (IBC) Vice President, Ontario, Stan Griffin said today.

Insurance Bureau of Canada suggests that there are steps homeowners can take to protect their property. If there is a catch basin located near the property, ensure that it is cleared of snow to allow water to drain. As soil around the walls of most homes and buildings has settled over the years, water from melting snow will naturally flow towards the house, and search for a way into the home. Homeowners should remove snow away from walls and basement windows to the point where the water will flow away from the home. Ensure that basement floor drains are clear. ``Property owners might consider investing in a sump pump, so that if water does start to seep into your basement, you can immediately pump it our through a window and away from the home,'' Mr.Griffin suggests.

IBC also recommends removing furniture and other contents from the basement, or, at the very least, raising them off the floor as high as possible. These steps will help minimize damage if water enters the property.

``Homeowners policies may have sewer back up coverage, however, surface
water entering the home from outside by seepage or leakage through doors, windows or cracks in basement walls or floors is not covered,'' Mr. Griffin added.

IBC reminds homeowners of the continuing danger of ice damming on roofs as snow melts first above the heated area of the house and then flows toward the unheated eaves where it tends to freeze, blocking its escape. If ice dams force water into the home, the owner should act quickly to relieve the pressure of water by creating a small drain hole in the ceiling and placing a bucket underneath to catch the drips. If water seeps onto walls, move furniture away to prevent damage.

Residents who are unsure of their water damage coverage should contact their insurance agent, broker or company for clarification or call IBC's Consumer Information Centre (416) 362-9528 in Toronto, or 1-800-387-2880.

Dear Paula C.:
Someone backed into the door of my three-year-old car and dented it. I had the damage appraised, and then took the car to a body shop for repair, as my insurer advised. I was furious to find out afterward that the body shop had replaced my door with a used one. As if that's not bad enough, the paint on the replacement door isn't an exact match with the rest of the car. I think my insurance should pay to have the car repainted to match the door, but the company refuses. Why?
-- Off-color bloke

But if you insist on getting a brand new door, that is your option, as long as you pay the difference in cost. The same holds true if you want your entire car repainted.

So, while you may believe you were steered in the wrong direction, your insurer really did come through in the crunch!

Note: Remember, policies vary, so when in doubt, consult your insurance representative.

For more on Automobile Insurance please visit :
Automobile Insurance Overview

I work from home as a software consultant. An acquaintance asked if I would install some new computer equipment for her. I did it as a favour, since I don't normally do that kind of work. She paid me a small fee for my time. A few weeks after I had completed the installation, she booted up her computer and -- alas -- it crashed. She says the computer store told her all its computers are checked thoroughly before they are sold, so it must have been improperly installed. Now she wants me to pay for the repairs -- maybe even a new computer -- and is threatening to see a lawyer. But wait -- it gets worse! I thought I had liability coverage under my home-business insurance, and now I find out that it covers me only while I am working on the premises -- NOT after I have left! What gives?
-- Crash victim

Someone got their wires crossed, all right!

Unfortunately for you, you didn't have "completed operations" coverage -- an extension to your home-business policy that takes care of liability that could arise AFTER you have left a client's premises.

If you supply a product, or install or service something, liability can rear its ugly head at any time, as you know all too well. While your particular home-business coverage protects you while you are working, completed operations coverage kicks in if injury or damage occurs after your work is finished and your client starts to use whatever you were working on.

It will also pay to defend you in a claim. Maybe the computer crash wasn't your fault at all, but was caused by something else. This coverage would take care of your legal defence, and would also pay the damages if you were ultimately found liable.

Depending on your line of business, you may need other kinds of liability insurance as well. For example, since you are offering advice in your capacity as a consultant, you should have "errors and omissions" coverage. This is often available through professional associations.

To cover all your bases, you should explain to your insurance provider exactly what your home business entails. Many home-office workers don't even have business insurance, mistakenly thinking they can rely on their homeowners coverage to protect them against business liability. Not so!

Let's say you pay a social visit to an acquaintance. You move a heavy desk for her, damaging her valuable Persian carpet in the process. Because you were visiting for personal reasons, your homeowners policy would protect you against liability. If, however, you were there for business reasons and the same thing happened, you would need business insurance to provide you with the same protection.

The same holds true if a visiting client tripped on your loose floorboard, fell, and broke her hip. Again, you would need business coverage to protect you in the event of a liability claim.

Don't leave your home business open to a lawsuit. Cover your assets!

Note: Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
While I was away on vacation, my insurer sent me a letter by registered mail saying my property insurance was being cancelled due to "non-payment of premium." By the time I picked up the letter at the post office three weeks later, the cancellation had already taken effect. So now I'm without insurance, and yet I was sure I had paid my premium! Are insurance companies allowed to cancel policies whenever it suits them?

As frustrating as it is to have your coverage pulled out from under you, your insurer IS entitled to cancel your insurance at any time, as long as it follows the proper procedures.

First of all, the insurance company must give you written notice, delivered either personally or by registered mail. If the notice is personally served, the cancellation takes effect five days after delivery; if it is sent by registered mail, the cancellation becomes effective after 15 days, starting from the day after the notice has been delivered to the addressee's post office. Whether or not you actually pick up the notice from the post office makes no difference, as you discovered.

Insurers are not required to give you a reason for cancelling your coverage, but they may choose to do so, as your insurer did.

Probably the most common reason for cancellation is unpaid premiums. Under these circumstances, the insurer has no choice but to cancel. Otherwise, it would be obliged to cover you even if you hadn't paid a cent.

However, if there has been a genuine misunderstanding about an unpaid premium, as you imply, explain it to your insurer right away. If the insurer agrees that it was an honest mistake, it may be willing to resume your coverage from that point on.

Otherwise, your record will show that your insurance was cancelled for non-payment of premium, and may come back to haunt you when you apply for insurance at another company. And if you have a mortgage on your house, the mortgagee will also receive notification of your cancellation. That could really put you in the doghouse!

The insurer may also cancel your policy if it discovers that you have withheld important information about the risk it is insuring.

So don't give your insurer cause for cancellation. That way, you can keep your coverage intact and leave the cancellations to the television networks!

Note: Remember, policies vary, so when in doubt, consult your insurance representative.

I have been renting a house for about a year now. A few weeks ago, I was frying some bacon on the stove. The phone rang and I ran to answer it. I wasn't gone more than a few minutes, but when I returned to the kitchen, the grease had sputtered and caught fire, and there was smoke all over the kitchen. Luckily, I managed to put out the fire myself, but the smoke made a terrible mess. As if that wasn't bad enough, my landlord says I have to pay to repair the damage. But it's his house, so he would have insurance, wouldn't he? I don't have any insurance, because I don't own the house. Now he expects me to pay out of pocket for the damage. Do I have to?
-- Hot under the collar

Obviously, you're pretty burned up about all this. I hate to fan the flames even further, but your landlord is right -- you do have to pay for the damage. That's why you need to carry liability insurance. Even though you don't own the house, you are still responsible for any damage that you may cause to the property while you are living there. It doesn't matter whether your landlord has insurance on the house or not -- you caused the fire. In other words, the perpetrator pays.

Here's why. Let's assume your landlord does have insurance, and he chooses to claim for the damage under that policy. His insurer would pay for the repairs, but would in turn make every effort to recover the money from you. That's called "subrogation" -- the process by which an insurance company -- in this case, your landlord's -- seeks reimbursement from the responsible party -- you -- for a claim it has already paid.

Whether you are renting a house or an apartment, you need tenants insurance. Not only would it have saved you from picking up the tab for the repairs, but it also would have covered any damage to your personal belongings.

But that won't get you off the hook this time, I'm afraid. You've learned the hard way that, as a tenant, you are responsible not only for damage to or loss of your own personal property, but also for any damage you may cause to your landlord's property. The same goes for any harm you may cause to others who visit there. Unfortunately, you thought -- as many others would -- that the landlord's insurance company would foot the bill and save your bacon. When pigs fly!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

My husband gave me a gorgeous diamond and sapphire ring for our 25th wedding anniversary. Although I don't know what he paid for it (he wouldn't tell!), I know I need to "schedule" it on my insurance policy so it will be properly covered. But how do I know how much to insure it for?

Sounds like your husband's a real gem! You are right to protect his generous gift by "scheduling" it -- adding a special rider to your homeowners policy to "beef up" your coverage. After all, most homeowners policies have a limit (usually about $2,000) for which they will reimburse you if your jewellery is stolen. In addition, you would have to pay a deductible on that amount, whereas there is usually no deductible for scheduled items.

As you have guessed, $2,000 (less the deductible) would likely not provide enough protection. But the only way to find out the true value of the ring is to have it appraised. A sales receipt will not suffice as proof of value, even if you could pry it from your husband! That would prove only how much he paid for the ring, and has no bearing on its actual value.

An appraisal, on the other hand, not only provides proof of value, but also a detailed description of the article, so if your ring is lost, stolen, or damaged, the insurer can replace it with one of like kind and quality. Remember, your jewellery is unique -- you can't simply browse through a catalogue and find an exact replica.

All appraisals are not alike either. To get an impartial estimate of your ring's value, find an independent appraisal firm that has no connection to buying or selling the ring -- not the jewellery store where the ring was purchased.

The appraisal firm should also be accredited, which means it has met criteria set by the Canadian Jeweller's Institute. If you can't find an accredited firm in your local directory, contact the Canadian Jeweller's Association in Toronto for a list.

Because values change, you should have your appraisal updated every three to seven years. Your insurer will usually remind you when the time comes.

Of course, no amount of money can replace the sentimental value of your silver anniversary gift, so consider keeping your ring in a safety deposit box when you don't need to wear it -- that's the best policy of all!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

I recently started my own business from home -- designing corporate brochures and other marketing materials for small businesses. My pride and joy is a brand new laptop computer -- complete with all the bells and whistles -- that I often take with me to demonstrate layouts, etc., to clients. Do I need any special insurance to protect my computer? It is, after all, my livelihood, and I don't know what I'd do if anything happened to it.

That could certainly take a byte out of your business, all right! Unfortunately, many home-office workers aren't minding their own business -- at least as far as their insurance is concerned! All too often, they assume that everything in their house or apartment is automatically covered under their homeowners or tenants policy. Not so! Homowners policies are intended to insure private dwellings -- not businesses -- so they will not provide the coverage you need for your home office. To protect your laptop and other office equipment, you need a policy that has been specially designed or endorsed ("beefed up" with additional coverage) for your business.

While there is some limited coverage for these items under a typical home owners policy, there are two reasons why you need additional insurance. First of all, business equipment is covered only while it is in your home. Obviously, that does not give you the protection you want, as your laptop frequently travels with you. The exception to this restriction would be if your laptop were used purely for pleasure. That is clearly not the case with you, no matter how many games of solitaire you might play in your spare time! Therefore, you need to take special measures to ensure your computer is covered both at home and away.

Secondly, there is a limit under your homeowners policy on how much you can claim in the event of a loss for business property -- usually $2,000 in all. (There may also be a separate limit that applies specifically to software.) Let's say you went away for the weekend and your home was burglarized. The thieves stole not only your precious laptop, but also your fax machine and printer. Well, the $2,000 would not go far in replacing your laptop, let alone the other stolen property.

Your computer is just one consideration in protecting your business. Every home-based business is different; there is no such thing as "standard home-office coverage," even though many insurance companies offer these types of packages. Explain your operation in detail to your insurance provider, and make it your business to get the right coverage.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

I live in a part of the country that is prone to earthquake. Therefore, my insurance broker advised me to buy earthquake insurance on my house. But the price is enough to shake anyone up! I'm wondering if I really need this extra coverage. Wouldn't my homeowners insurance cover me if an earthquake hit?
--All Shook Up

No! If an earthquake damages your property, don't count on your homeowners insurance to pick up the pieces, so to speak. Suffering an earthquake is bad enough, but you'd be on even shakier ground if you didn't have adequate protection on your home (a specific endorsement should be added to the basic homeowners policy). Anyone who lives near a fault line -- in British Columbia, the Ottawa Valley, and parts of Quebec, particularly around Montreal -- should consider buying earthquake coverage.

Earthquake insurance generally covers loss or damage to your property caused by the actual shaking movement of the earth. Your ordinary homeowners policy, on the other hand, would likely not cover this peril.

Damage caused by the shaking may be only part of the picture, though. If an earthquake is powerful enough to damage a building, it could also rupture a gas or water main. Escaping gas could ignite, causing a fire that might not be readily extinguished, especially if the water supply was affected.

Earthquake insurance doesn't come cheap, as you discovered. The price varies according to your geographic location and the construction of your house (generally, solid-brick buildings are less likely than wood-frame structures to withstand earthquake shock). Therefore, you may not pay
the same price for your coverage as your neighbours do.

There is also a fairly high deductible (the portion of the claim that you agree to pay) on earthquake coverage, compared with your regular homeowners insurance.

But remember, insurance is designed to protect against serious loss or damage. Wouldn't you rather pay the price BEFORE disaster strikes? That way, if the earth moves, you'll be on solid ground -- at least as far as your insurance is concerned!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

When my neighbour's son was driving his father's car, he lost control and went into a ditch, hitting a telephone pole. Luckily, he was not seriously injured, but the car was a write-off. My neighbour tells me that he got full value for his car from his insurance company. He wasn't charged any depreciation, and yet the car was two years old! When I "totalled" my car last year, I only got what the insurance company said was "Actual Cash Value" -- the value of the car less depreciation. Why didn't I get the same deal as my neighbor?

That must have seemed like a real show of depreciation! But rest assured, your neighbour didn't get any special favours from his insurer. He got full value for his car because he had purchased a particular endorsement, or addition, on his automobile policy that limits depreciation charges. (Depending on the province in which you live, there are different names for this endorsement -- ask your insurance provider.)

The limited waiver of depreciation endorsement says the insurance company will not charge depreciation within the period of time specified (usually 30 months). That means that, for 30 months from the date you buy and insure your car, the company will not deduct for depreciation when calculating the value of your car following an accident. This could mean a saving of thousands of dollars if your car is a few years old, as in your neighbor's case.

You can request this endorsement when you are insuring a new car that you have just acquired from a dealer; it's simply a matter of asking your insurance provider to add it on to your policy.

Under the terms of the endorsement, the insurance company will pay the lowest of the following amounts (less the deductible on your auto policy):

the actual purchase price of the automobile and its equipment;
the manufacturer's suggested list price on the automobile and its equipment on the original date of purchase; or the cost of replacing the automobile with a new automobile of the same make and model, similarly equipped. The payment also covers all applicable taxes, but not tires and batteries.

At about $25 a year, the limited waiver of depreciation is a bargain! Unfortunately, many consumers are not aware of this option, and find out only after an accident -- and much to their dismay -- that their car is worth less than they expected.

A car accident is a jarring experience, but this endorsement can at least soften the blow to your wallet.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

I am getting ready to head off on the trip of my dreams -- a six-week leisurely drive through the U.S. But I'm concerned about my car insurance. What if I have an accident down there? Would I be covered? --Road warrior/worrier

Dear Road warrior:

No need to be a worrier -- you can hit the road knowing that, as long as you are insured in Canada -- in any province -- and you are driving your own car, you're covered anywhere in the U.S..

The only problem you might have -- other than trying to make those Canuck dollars go a little further -- would be the inconvenience of having to settle an insurance claim long-distance.

Generally, your insurance company would appoint an independent adjuster who lives in the area where you had the accident to settle your claim; only rarely would a company try to use its own staff to settle a U.S. claim, unless it is one that writes auto insurance in both countries. If that is the case, you may already have instructions from your company as to whom you should contact in the event of a U.S. accident. Check your pink insurance liability slip as well -- some insurance companies print claims instructions on the back.

You are under no obligation to inform your insurance provider that you're U.S.-bound. However, it's a good idea to check with your agent or broker before you leave, to find out how your insurer deals with accidents in the U.S. After all, being involved in a mishap is a bad enough experience, let alone not knowing where to turn when it happens.

So you're all set for your American adventure. But should you get a hankering to go overseas or Mexico, don't assume the same advice holds true. Driving in countries other than the U.S. makes a world of difference, insurance-wise. Check with your insurance provider and travel agent.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

I was standing out on my porch the other day, chatting with my next-door neighbour, when my neighbour across the street got in his car and backed out of his driveway in a terrible hurry -- right into my beautiful flowering shrub! He not only ripped the shrub out of the ground, but made a huge rut in my lawn as well. Even worse, I find out that he’s driving without car insurance! But more to the point, will my insurance cover my plant plight?

--Rhoda Dendron in Distress

I'll bet you feel like you've really been bushwhacked! But the good news is, if you have any of the package homeowner's policies -- standard, broad-form, or comprehensive -- your insurance will pay for replacing your precious rhododendron.

Your homeowner's policy will pay up to five per cent of the total insurance on your house to cover trees, plants, or shrubs that have been damaged by a number of perils, including "impact by land vehicle" -- i.e., your near-sighted neighbour's car. This amount also includes the cost of removing any debris from your property as a result of the accident. There is a maximum limit of $500 for any one plant.

When it comes to your replacing your sod, however, the grass isn't so green. Damage to lawns is not normally covered under any of the homeowner's policies.

Since you know who caused the damage, you have two choices: you can either claim on your homeowner's policy for the damage to the shrub, or you can try to recover the money -- including the cost of replacing the sod -- from your neighbour.

If you claim under your homeowner's policy, you will have to pay the deductible (the portion of the claim you've agreed to pay). Depending on what your deductible is, claiming on your policy might not even be an option. If you have a high deductible, for example, that could be more than the cost to replace the shrub. Let's say your deductible is $500, and it will cost $500 -- or less -- to replace your shrub. In that case, your only solution is to ask Wrong Way Corrigan to pay up.

Note: The preceding information is based on the Insurance Bureau of Canada's guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

My family was the victim of a house fire recently. Fortunately, no one was injured, but our house has to be repaired, and we will have to live elsewhere for several weeks. I know the insurance will cover the cost of the repairs, but how do we pay for all our extra living expenses in the meantime?

--Living beyond our means

No need to get fired up on that score! Your homeowner's insurance provides you with a safety net. Any additional living expenses you incur will be covered up to the maximum amount specified in your policy -- usually 20 per cent of the total insurance you have on your house.

If your house is made unfit to live in by a peril that you are insured against -- like fire -- your insurance will cover any reasonable increase in living expenses that you incur while your house is being repaired (or until you find permanent accommodation, if the damage is irreparable). The idea is to permit the members of your household to maintain the standard of living they enjoyed before the fire.

For example, your insurance would cover moving expenses -- both out and in -- as well as any other extra costs. Perhaps you used to live right on a bus route before the fire, and now you must use alternative transportation, at a higher cost, to get to work; perhaps it is more expensive for child care at your temporary place of residence; perhaps you had laundry facilities before, and now you have to pay for them; or maybe there aren't any reasonable cooking facilities, so you have to buy more meals at restaurants -- all these additional costs would be covered.

In order for this insurance to kick in, two criteria must be met: there must be damage to the dwelling by a peril that the policy insures against; and the damage must make the dwelling unfit to be occupied while the repairs are being made.

This coverage is also available to apartment dwellers, as part of the tenant's insurance package. The only difference is that the amount of insurance available for additional living expenses is calculated on the insurance you have on your contents, rather than on the building. The same holds true for condominiums.

It's important to remember that your homeowner or tenant policy doesn't just help you replace what you lost -- it also tides you over in the interim.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

My kids were playing floor hockey in the basement, and, in the heat of the game, they accidentally knocked my freezer plug out of the wall. I didn't know it at the time, but when I went downstairs a few days later, I got wind that something terrible had happened -- a whole freezer full of spoiled food. As if that wasn't bad enough, my broker told me my insurance wouldn’t cover the cost of replacing the food. Yet, I remember my sister's freezer broke down last year, and her insurer not only replaced her food, but also her freezer! Why won't mine do the same? Smells like a rat to me!

--Frozen out and burned up

Dear Frozen Out:

That's a bad case of freezer burn, all right, but, unfortunately, your broker is correct. Your meltdown is not covered, no matter what type of homeowner's insurance you have, because the spoilage was caused by the accidental disconnection of your power supply -- in other words, your rambunctious Gretzky wannabes.

Sure, your kids didn't mean to pull the plug on you, but still, this type of accident is considered preventable, unlike a mechanical breakdown, such as your sister experienced, or a power failure in your home.

If a power failure or mechanical breakdown had caused your loss, you would have been covered up to a maximum of $2,000, with no deductible to pay. This $2,000 would also include coverage for any damage to the freezer caused by the food spoilage. I don't have to tell you that the smell of rotten meat or fish can be absorbed by the plastic liner of your freezer, and sometimes, no amount of cleaning will get rid of it. The only solution is to replace the liner or, if that isn't feasible, perhaps the entire freezer, as in your sister's case. The insurance would also cover reasonable expenses that you might incur to preserve food while the freezer is being repaired -- for example, having to rent space in a storage locker.

You learned the hard way that unplugged means uncovered, and served the penalty for your hockey stars' roughing infraction. However, there is one simple tip that would have prevented this whole stinking mess. For just a couple of dollars, you can buy an attachment for your plug that will keep it in the socket, no matter how boisterous the game gets. That way, you can keep your assets frozen, and you won't have to worry about another financial meltdown.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Although I was not a victim of the recent tragic ice storm in Quebec and eastern Ontario, it got me thinking about the damage that can be caused by water, frozen or otherwise. Would my insurance cover me if I had, say, a flood in my basement?

You may or may not find yourself in hot water, from an insurance perspective, if your basement is flooded. It all depends on the circumstances.

Let's say you've escaped the wrath of winter for a few days of sunbathing (with sunscreen, of course!) in warmer climes. You return home, tanned and relaxed, only to find that a water pipe has frozen and burst, leaving your basement a sodden mess. Since the damage occurred while you were away (for more than four days), you would be covered ONLY IF you had arranged to have your house checked daily by a competent person to ensure that heat was maintained or if you had shut off the water. In other words, the onus is on the homeowner to take reasonable steps to prevent this type of damage from occurring. If you have done that, you're off the hook.

In another scenario, you go downstairs one day to do your laundry, and alas, your basement is swimming in water. If the water came up through the main drain, you would be insured, as long as you have "sewer backup" coverage on your policy. Many homeowners policies provide this option, although you may have to request it. There could also be a dollar limit on such coverage, especially in flood-prone areas like Winnipeg.

If, on the other hand, the water came in through a window as a result of a river overflowing, you'd be up the creek without a paddle, insurance-wise. A peril like flood cannot be insured against, because, if you live in an area that can be flooded, it's a sure bet that, sooner or later, it will be. Home insurance is intended to protect against the financial consequences of unpredictable events, not those that are inevitable.

Perhaps you don't live in a flood plain, but you carelessly left your basement window open during a rainstorm. That damage would not be covered either, because it could have been avoided had you been more vigilant.

When it comes to water damage, prevention is the best policy. But it is a complex issue, so don't just go with the flow -- find out from your insurance representative how you can stay high and dry.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

I hired a repair person to fix a bug in my state-of-the-art stereo system. However, while he was working on the equipment, it slipped out of his hands, fell on the floor, and smashed beyond repair. He was very upset, but I told him my insurance would cover it. Now my broker tells me that, if the repairman broke the equipment, he has to pay for it. I don't get it -- why isn't it covered under my homeowners policy, regardless of who was responsible?

-- Turned off and tuned out

Dear off and out:

Now that's a sour note! Your so-called repairman stops at the local burger joint for an order of fries, and the next thing you know, your expensive stereo equipment has slipped right through his greasy fingers! But your broker is right. Mr. Fix-it will have to take responsibility for his slip up -- you cannot do it for him. In other words, NEVER tell the responsible party: "Don't worry, my insurance will cover it."

Your insurer will compensate you for your damaged property (as long as it was insured in the first place), but then it has the right to try to recover its money from the responsible party (who may have insurance to cover it). This is called "subrogation" -- the process by which one insurance company seeks reimbursement from another person or company for a claim it has already paid. In your case, your insurer can "subrogate" against your clumsy repairman, as long as you hold him responsible for the damage. If you don't give your insurer the opportunity to subrogate, it could backfire on you.

Take the case of college buddies Jack and Jill. Jill trips and breaks Jack's valuable figurine as she falls. Jack feels badly for Jill and assures her that his insurance will pay for it. But when Jack's insurance company tries to subrogate against Jill, she rightfully says that Jack "let her off the hook" by saying his insurance would cover any damage. Consequently, Jack's insurer may not be able to recover its money from Jill, and Jack could end up paying the price; his insurer might refuse to pay him the full amount he is owed for his claim, since he denied the insurer the chance to subrogate. It might also cost him his friendship with Jill.

So never let someone off the hook for any damage, no matter how honorable your intentions. Make your repairman fess up to the accident and you'll soon be singing a whole different tune!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
I have some valuable jewelry that I inherited from my grandmother. My insurance broker tells me I should have it "scheduled," whatever that means! I thought it was already covered under my homeowners policy -- and now I'm supposed to pay more to have it "scheduled?" How come?

-- Queen of diamonds

That's a gem of a question, but there's a good reason for scheduling your jewelry -- and it has nothing to do with timetables! Picture this. You come home from a night out at the movies, only to find that your house has been broken into and all your valuable jewelry stolen. You call your insurance broker, who informs you that your jewelry is covered for only $2,000 on your homeowners policy if it was stolen. And yet, you know it was worth much more than that. That's where scheduling comes in -- to fill the gap between what your typical homeowners policy covers and the value of your jewelry.

"Scheduling," in insurance lingo, is an optional "extra" that beefs up your insurance coverage. You would schedule items like jewelry or furs, so you could recover their current value if they were damaged, lost, or stolen. Your homeowners policy generally pays only up to a limit of $2,000 for a theft loss, so if your jewelry is worth more than that, you should have it scheduled. Another advantage to scheduling is that usually, you do not have to pay a deductible (the portion of the claim that you agree to pay) in the event of a loss, as you would for a claim under your homeowners policy.

You should also have your valuables appraised, so you know how much insurance you need. Be sure to keep the appraisal up to date, as your jewelry may appreciate in value, and you want to have the appropriate amount of insurance. (Conversely, if it depreciates, you could be paying too much to insure it.) Also, keep any receipts to verify ownership of your valuables. This is particularly important for items like camera equipment that you would not normally have appraised, since it probably will depreciate in value.

Finally, keep all your valuables locked up, either in a safe on your premises, or in a safety-deposit box. While you can buy insurance to cover the cost of replacing your precious heirlooms, you can never replace their sentimental value.

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
I was recently bringing my brand new large-screen television home in my car. I had to stop to do an errand along the way, and when I returned to unlock my car, I realized that someone had already done it for me -- my car had been broken into and my television stolen. Is it covered under either my homeowners policy or my automobile policy?
-- Couch potato in distress

Don't worry! As long as you have homeowners (or tenants) insurance, you'll be channel-surfing again in no time! Generally, any items stolen from your car that are not part of the car are covered under most homeowners/tenants policies -- another good reason for insuring your house or apartment!

Anything that is stolen that is part of the equipment of the car, such as its stereo system, would be covered under your automobile's comprehensive insurance, if you carry that coverage.

Your homeowners insurance would also kick in if the loss took place somewhere else, besides your car -- for example, if your skis were stolen from outside the chalet while you were inside taking a break.

However, any losses that you claim must be for items that would normally be covered under your homeowners policy. A laptop computer, for instance, might be considered business property and may be limited to the premises.

You should also have receipts to verify the ownership of any items you claim. Insurers will not pay for something you can't prove you owned, however honest your face may be! If they were to do so, insurance fraud -- which already costs an estimated $1.3 billion a year -- would skyrocket, as would our insurance premiums. It's not just the insurer who foots the bill for the "phantom" camcorder that never existed -- we all pay the price!

When making an insurance claim, also keep in mind that any insurance payment you receive will normally be subject to the deductible -- the portion of the claim you've agreed to pay -- on your homeowners policy. Since this amount could be in the range of $500, you may want to reconsider making a claim at all if the value of the item that was stolen is not much greater than your deductible. For example, if your $325 sweater was stolen and your deductible is $300, it certainly does not make sense to claim for that loss. Furthermore, if you have numerous claims on your record, it is likely to affect your rating with your insurer, and could even result in the non-renewal of your policy.

The best way to avoid the deductible and hold onto your prized possessions is to practice common sense. Don't leave valuable items in plain view, and always lock your car. Never give a thief an even break!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
One side of my car was damaged in an accident in a parking lot. Although my insurance covered the cost of repair and repainting, the two sides aren't exactly the same color anymore. My insurer says if I want to have the undamaged side repainted to match, I have to pay for it myself. That doesn't seem fair, as both sides looked the same before the accident -- and it wasn't even my fault!

No wonder you're seeing red -- and feeling blue! You slip into the grocery store and return 10 minutes later, only to find your car door all bent out of shape. Now you are faced not only with the inconvenience of getting your car fixed, but with having to pay out of pocket if you want the other side of your car repainted! It may not seem fair to you right now, but there is a good reason why your insurance doesn't cover the paint job on the undamaged door.

The insurance policy says the insurer will pay no more than the actual cash value (taking into account depreciation) at the time of the damage to repair your car. It is the insurer's responsibility only to put your car back in the same condition it was in before the accident -- and that means no paint job on the undamaged side of your car.

So if you insist on having the undamaged door repainted, you will have to pay for it. This principle is called "betterment" -- when the repairs or replacement as a result of the loss end up giving the insured something better than he or she had before the loss. Since the premise of insurance does not allow the insured to profit or "better" from his loss, he must cover the cost of the additional work.

Many people also expect their insurance company to repair their aging car with brand new parts. However, the insurance policy also says the insurer may repair, rebuild, or replace any damaged parts with other parts "of like kind and quality." Let's say you rear-end a car and damage the bumper on your five-year-old Grand Prix. The insurer will probably replace your bumper with a used one of the same "kind and quality" as the original.

After all, insurance is intended to put things back to the way they were before, not to make them better than they were.

If it were an insurance company's policy to always repaint the entire car if only one side was scratched, or to replace old parts with new, we would all end up paying more for our insurance. So a betterment charge really is the better way to keep insurance costs down for all of us!

Note: The preceding information is based on the Insurance Bureau of Canada’s guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.

Dear Paula C.:
I asked my broker why my neighbour pays a different amount for his homeowner insurance than I do. He said it was due to the "underwriting." What on earth does that mean?

-- Unschooled in Underwriting

Dear Unschooled:

For starters, let's say you own some valuable jewellery that you have listed separately on your insurance policy (called "scheduling"), but your neighbor doesn't. Then suppose you have rented out the basement apartment of your 3,000-square-foot house, while your neighbor lives with his immediate family in a 2,000-square-foot dwelling. All of these factors would cause an insurance company to decide there was more at risk in insuring your home than your neighbour's, and so you would pay more for your coverage. That's underwriting! It simply means deciding on what terms to accept a "risk" -- like your home or your neighbor's -- and pricing it accordingly.

It's a strange word, but once you know how it came about, it all makes sense. Insurance began back in the 15th century with merchants insuring ships and cargoes. Insurance companies didn't exist then -- all risks were insured by private individuals who did this as a sideline to their regular business. By the 17th century, an "insurance office keeper" -- the predecessor to today's broker -- took the policy around the city of London in search of wealthy merchants who could pay their share if a ship went down. Those taking a share of the risk signed their names, with the amount they were investing, one beneath the other at the bottom of the policy wording. Hence the term "underwriters."

It's really not all that different today, at least in theory. The insurance company "underwrites" the risk -- or not -- based on various "risk factors" that it has established. In underwriting personal insurance, like property and automobile, the company has already decided what rules it will use to determine if an applicant is eligible for insurance. A risk either fits the company's criteria or it doesn't.

An insurance company also employs people who are called "underwriters." They decide whether the company should insure a particular risk, based on the risk factors the company has set, and, if so, at what price.

The insurance for your house and your neighbor's was priced according to these risk factors -- whether a house is occupied by the owner or by tenants; whether it's a single-family dwelling or has multiple tenants; the size and style of the house; and its location (how far it is from a hydrant and firehall). Generally, insurance is cheaper for an owner-occupied, single-family dwelling.

And don't forget, not all homeowner policies are alike -- you may have purchased broader coverage than your neighbor has. So be sure you are comparing apples with apples before you upset the apple cart.

Dear Paula C.:
I rent an apartment and don't own a lot of possessions, so do I really need any sort of home insurance?
-- Clueless Cliff Dweller

Yes, you most certainly do! Just ask the victims of a devastating fire that gutted a Calgary apartment building recently. Many of them did not have insurance, and cannot afford to replace what they lost.

Even if you don't think you have many belongings, you likely have a television, furniture, dishes, perhaps a stereo system and some CDs. What would it cost to replace these items? Could you afford to do so tomorrow if you lost them in a fire? And what about temporary accommodation until you could return to your apartment?

There are special insurance packages designed for tenants, and many reasons for purchasing them.

First of all, besides the personal property in your apartment, you may have property outside that needs to be insured as well, like patio furniture, or even the Christmas shopping that could be stolen from the back seat of your car. Your automobile insurance usually covers a stolen item that is part of your car, like the stereo system, but it doesn't cover anything that is not. That's where your tenant's insurance would kick in. Or what if you go on a ski vacation and your skis are stolen? Again, your tenant's insurance would probably come to your rescue.

Even more importantly, you may be held responsible for the damage that you may cause to any part of the building or to others who live or visit there. For example, if you leave the water running in your bathtub and it leaks to the apartment below, you are liable for that damage. Or, even worse, you could start a fire in your unit that could destroy the entire apartment building. Again, you would be held responsible. For that reason alone, you most certainly need personal liability coverage, which is provided with the tenant's package -- usually a limit of at least $500,000 or $1 million. Not only does third-party liability cover the damages you may cause to somebody else's unit; it also covers legal costs to defend the claim in a lawsuit. This kind of coverage is difficult to purchase as a stand-alone product, so it is best to buy it as part of a tenant's package. You might want to buy even more coverage than what is offered in the package, for example better coverage for jewellery, or if you have made significant improvements to your apartment, like adding broadloom or built-in cabinets.

Remember, the landlord is not responsible for loss or damage that occurs in your apartment, unless it can be proven that he or she was negligent. It's up to the renter to insure his or her own personal property. Many of the victims of the Calgary fire are discovering that the hard way.

Dear Paula C.,
My wife and I are heading for Florida right after the holiday season, but my insurance agent told me we have to make certain arrangements with our house before we go. What did he mean? And besides, what business is it of the insurance company if we go away for a few months?

Don't get your feathers all ruffled! Your insurance provider is just concerned about your water pipes freezing and bursting in the cold weather -- and rightly so. Your homeowners insurance policy says that, if you are going to be away for more than four consecutive days (never mind a few months!), you will not be covered for loss or damage caused by freezing pipes, UNLESS: you either shut off the water supply and drain the pipes, fixtures, and appliances; or make arrangements for a competent person to enter your dwelling every day to ensure that heating is maintained.

Once you have addressed the water-damage threat, there are other steps you should take before you fly the coop, whether it's for a few days or a few months.

Most importantly, you want your house to have that "lived in" look so as not to extend an open invitation to burglars. Although your homeowners policy continues to insure your property (as well as the personal property you take with you) while you're away, you sure don't want your vacation interrupted by a call from the police saying your home has been burglarized.

To deter thieves, use variable timers that can be set to go on and off at different times each day on both your inside and outside lights. Cancel any newspaper deliveries, and call on your neighbours to remove flyers and mail from your front porch, and clear any snow from your walkway and driveway. Invite the neighbour who has the most cars (usually, it's one with teenagers!) to park in your driveway while you are away. Store jewellery and smaller valuables in a safety-deposit box, and don't leave larger valuables, like laptop computers, lying around.

Finally, if you are driving your own car south for the winter, it's a good idea to inform your insurance provider. Although your automobile policy is valid throughout North America, your insurer assessed your risk based on your driving situation in Canada. If you live, for example, in rural Canada but take your car to Miami for three or four months, there is a material change in the risk. In other words, the chance of a loss occurring may be greater and the consequences more severe from a liability standpoint in Miami. That could complicate any claim you might have while in Florida.

So, the best advice is to play it safe before you go. That way, the only frozen water you'll have to worry about is the ice in your mint julep.

Dear Paula C.:
After the well-publicized collapse of Confederation Life, I am concerned about how safe my homeowners and automobile insurance money is, especially if I have a claim and the company goes bankrupt before I get paid. Would I still get my money?

Worry no more! In the unlikely event that your insurance company does go under, the Property and Casualty Insurance Compensation Corporation (known as "PACICC" for short) will come to your rescue!

Although insurance company failures are very rare, they can -- and do -- happen, as the unfortunate policyholders of Confederation Life discovered. That is why the property and casualty insurers -- those companies that sell insurance for your homes, cars, and other property in Canada -- joined forces to fund the PACICC program as protection against insolvencies. It's sort of like insurance for your insurance, but you don't have to apply for this protection -- it's extended automatically.

If your insurer does fail, the first thing you should do is contact your agent or broker to have your policies replaced, so you will still have insurance protection. This must be done within 45 days of the date of the court order declaring the company bankrupt.

If you purchased your insurance directly from the company, rather than from an agent or broker, and you have a claim pending, notify the company's head office. The liquidator will write to all policyholders concerning claim procedures. PACICC will consider claims for events that occurred on or before the date of the bankruptcy, and for up to 45 days afterward. You may claim either directly from PACICC or directly from the liquidator. The advantage of claiming from PACICC is prompt payment. If you claim from the liquidator, on the other hand, be prepared for a potentially lengthy delay before you are paid any part of your claim.

There are limits on PACICC claims payouts, however. It will pay up to a maximum of $250,000 for unpaid claims for losses arising from a single occurrence. If your claim exceeds $250,000, you may eventually be reimbursed for all or part of the shortfall from funds released by the liquidator.

PACICC will also refund 70 per cent of the unexpired portion of your premium to a maximum payout of $700 per policy, applicable from the date of the insurer's collapse.

Back to Confederation Life: life insurance insolvencies are not covered by PACICC, but fall under a similar program for life & health insurers, called "CompCorp."

So you can rest easy, knowing that your policy and premium are protected. After all, insurance is supposed to bring you peace of mind! As the song goes, "Don't worry -- be happy." Even if all else fails, PACICC won't!

I recently had an insurance claim for $1,000, and I had to pay $500 of it myself because that was my "deductible." I thought I bought insurance so I wouldn't have to pay for losses myself. What gives?

-- Disgruntled by Deductibles

Dear Disgruntled:

We all learned in math class that deducting one number from another is the same as subtracting it. Well, it works much the same way in "Insurance 101." The deductible is the amount that you agree will be "deducted" from what the insurance company pays when you have a claim. Therefore, it is the portion of the claim that you have to pay. So if you have a deductible of $500 on your homeowners insurance and you suffer a $1,000 loss, as you did, you pay $500, and the insurance company pays the rest, in this case, $500.

Deductibles apply on both your property and your car insurance, except in automobile insurance, the deductible does not apply if the loss or damage is caused by fire or lightning, or if the entire vehicle is stolen (as long as you have bought insurance to protect against these perils in the first place). Most insurance companies have a minimum acceptable deductible, but you can choose a higher one in order to save money on your annual insurance premium. The higher the deductible, the lower the premium.

But why do you have to pay anything at all when you have a claim, you ask? There are several reasons. Because deductibles reduce the amount that an insurance company must pay when there is a claim, they help keep premiums down and make insurance more affordable for all of us. They also eliminate claims being made for minor damage, like nicks and scrapes on a car, that would be too costly to administer. And since the insured has to pay a portion of the loss or damage, deductibles encourage consumers to be more conscious of safety and loss prevention.

If you are thinking about choosing a higher deductible to save on your premium, ask yourself: if I suffered a major loss tomorrow, could I pay my deductible out of my pocket?

Before you opt for a higher deductible, find out what you would save in the long run. Ask your insurance provider how much your premium would be with a $1,000 deductible versus a smaller amount. Suppose you would save $100 annually -- or maybe even more -- with a higher deductible. But then suppose you have a serious claim. Could you pay $1,000 of that claim to replace something you need?

There are no hard and fast rules -- it's your decision. You do the math -- or the arithmetic!