Protecting Your Home and Business with an Ontario Personal Insurance Policy

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1 In partnership with INSURANCE BUREAU OF CANADA (IBC), the national industry association representing Canada s private home, car and business insurers Property and Casualty Insurance in Canada: Protecting Your Peace of Mind Whether you own or rent, insuring your home and home-based business puts your mind at ease. But with climate change, the risks are rising. Everyone needs to adapt: insurers, industry -- and you, too. Homeowners Insurance Is your home insurance up to date? Here s why it s worth your while to be sure: Your home is your most valuable asset. You should take all the precautions you can to protect it. All homeowners should insure their houses according to what it would cost to rebuild the house in the event it is destroyed. This amount is called the replacement cost, and it is different from the market value of your home and even from your tax assessment value. Your possessions matter, too. Most homeowners policies cover contents up to a specific percentage of the total insured value of the home. If your policy is out of date, you may not have enough insurance to cover all the contents of your home in the event of a loss. You have contractual obligations. Under your insurance policy, it is your responsibility to report any changes to your property, such as renovations or additions, to your insurance professional. Also, by making sure that your insurance company has an accurate and up-to-date description of your home, you can help speed up the claims settlement process after a loss. Property damage caused by severe weather is increasing. Unpredictable and costly, severe weather property damage has highlighted the need for homeowners to adapt to the effects of climate change. For example, sewer back-ups resulting from increased rainfall are a growing problem in many communities in Canada. Content provided by IBC

2 We were robbed on December 4 th. Carmen, customer, Québec Carmen remembers Dec 4 th like it was yesterday. She remembers her overpowering sense of loss. Cherished possessions, gone forever. But she also remembers how she felt after Sacha Mihajlovic, Intact Insurance Adjuster, rushed over. It s why she wrote us a letter. He managed to completely calm me and my husband made us feel like we were not alone. At Intact Insurance we know that break-ins rob people of more than their possessions. Memories and sentimental attachment are also stolen. It s why you have our word that we will make the experience of getting your customer back on track as respectful, fair and easy as possible. Because we believe insurance is not about things, it is about people. People like Carmen and her family, and yes, you too Sacha. HOME AUTO BUSINE SS Certain conditions, restrictions and exclusions may apply. Products and services are not available in Saskatchewan or Newfoundland. The BIP logo is a registered trademark of the Insurance Brokers Association of Canada (IBAC) used with permission. All other trademarks are properties of Intact Financial Corporation used under license. 2010, Intact Insurance Company. All rights reserved.

3 About replacement cost If your home were to be destroyed, the replacement cost what your insurance company would pay to rebuild would include outlays that may not be reflected in a home s resale value, such as the cost of skilled labour (which can fluctuate depending on availability), the cost of debris removal, and more. If you ve made upgrades, renovations or other improvements since your insurance policy was written or last reviewed, be sure it is updated to accurately cover the full replacement cost of your home. For more information, visit ibc.ca. Natural disasters are hitting Canada with increasing frequency and severity. It is important to understand the natural hazards to which your community is exposed. Create a family emergency disaster plan based on this exposure, and prepare a disaster safety kit. A disaster safety kit should help you through the first 72 hours following a major disaster. Include items such as basic safety equipment (e.g., a flashlight and radio), food and water, extra car keys, cash, personal hygiene items and copies of important documents (e.g., insurance policies). For more information, visit ibc.ca. Creating resilient communities and knowledgeable individuals is the best way to ensure that hazards don t become disasters. The impact of climate change on Canadians It is no secret that the frequency and impact of natural disasters are on the rise worldwide. Earthquakes, hurricanes, tsunamis, forest fires, tornadoes, ice storms and severe rainstorms are happening more often than ever before, and property damage caused by severe weather in Canada has been costly and unpredictable. Today, insurance claims resulting from natural disasters are 20 times higher than they were 30 years ago. Many of us remember the devastation of Hurricane Juan, which hit Nova Scotia and Prince Edward Island in 2003, and the sheer horror of the forest fires that swept across British Columbia the same year. In 2005, Toronto and the surrounding area were hit with a severe rainstorm that led to the second-largest insurance payout in Canada s history. The largest Canadian disaster was the ice storm of Evidence suggests that the severity and frequency of extreme weather will continue to rise. Adaptation to climate change: A top priority Canada s home, car and business insurers are encouraging and helping governments and individual Canadians to adapt to the effects of climate change. Creating resilient communities and knowledgeable individuals is the best way to ensure that hazards don t become disasters. Canada s invisible infrastructure sewer and sanitary systems and stormwater treatment facilities in particular is in desperate need of upgrading. Our aging systems are not able to handle the increased precipitation that is now a reality. Infrastructure failure is to blame for most of the damage caused by severe weather events in recent decades. The insurance industry, on behalf of Canadians, is calling on governments to upgrade water and surface water infrastructure, and to update land use policies, create stricter building codes and improve disaster management efforts. Insurers are also working with stakeholders to develop a municipal risk assessment tool that will help municipalities to identify infrastructure vulnerabilities and allocate dollars strategically. Insurers want to help homeowners, too. The Insurance Research Lab for Better Homes, a one-of-a-kind facility that simulates extreme weather to study the structural integrity of houses and to develop cost-effective ways to build stronger homes that are more resilient to extreme weather. The project is sponsored by Insurance Bureau of Canada and research is conducted by the Faculty of Engineering at the University of Western Ontario.

4 Protecting Your Peace of Mind Insurance payments weather-related events: Ice storm (1998) $1.6B BC wildfires (2003) $200M Saguenay floods (1996) $1.5B Ottawa/Hamilton rains (2009)$196M Toronto rains (2005) $500M Peterborough floods (2004) $90M Alberta windstorms (2009) $365M Vaughan tornadoes (2009) $76M M= Millions B= Billions Consider purchasing sewer back-up insurance, especially if your area has storm and sanitary sewers combined. Climate change: How to prepare and protect yourself and your home Water damage is now the leading cause of property damage in Canada, costing insurers and Canadians approximately $1.5 billion per year. Sewer backups resulting from increased rainfall are a growing problem in many communities. There are few things more frustrating to a homeowner than a flooded basement, and it can happen all too easily, often without warning. Fortunately, there are a number of simple actions you can take that will make a big difference when it comes to protecting your family and your property. Whether you re an avid gardener or a weekend home renovator, incorporate some of the following ideas into your plans to make the most of your improvements. Keep floor drains clear of obstruction. Arrange to have someone check your property if you are going to be away from home for more than three days. If you will be away during wintertime, have someone come in daily to ensure that your heat is still on, or drain the plumbing before you go. Ensure that there is proper grading around your home, and incorporate this into new landscape designs. Install a sump pump. Install backflow valves or plugs for drains, toilets and other sewer connections to prevent water from entering the home. Store important documents and irreplaceable personal objects (such as photographs) on an upper level of your home where they are less likely to get damaged. Ensure that furnaces, hot water heaters and electrical panels in the basement are elevated on masonry, or relocate these objects. Avoid finishing areas that may be prone to flooding (e.g., the basement). In addition to taking these small precautions to help keep your basement dry, you may also want to purchase sewer back-up insurance, especially if your area has storm and sanitary sewers combined. So take control protect your property! And when disaster strikes Even with all the research and preparation in the world, natural and unnatural disasters will sometimes happen. Fortunately, the insurance industry helps by paying claims and by providing programs like the Community Assistance Mobile Pavilion (CAMP), a recent initiative offered by IBC. CAMP provides Canadians who are suddenly forced to cope with extreme weather events such as windstorms, wildfires, torrential rains and other disasters with quick access to on-site insurance-related information from helpful, trained insurance industry personnel. For more information about climate change and natural disasters, visit ibc.ca. And remember, simple actions can make a big difference when it comes to protecting yourself, your family and your property. A home inventory. An inventory of your possessions will help you to keep track of your belongings and calculate replacement costs. It will also help you get the right insurance coverage and make it easier to file a claim, should you need to. For more info visit ibc.ca.

5 Fast Facts: You Wanted to Know Q: Do insurers pay for damage caused by an act of God? A: The words act of God do not appear in any home, car or business insurance policies in Canada. Nonetheless, insurers frequently pay for claims stemming from events that some might call acts of God, such as hurricanes, wildfires, high winds and hailstorms. Q: Can you lend your car to someone else without worrying about insurance? A: The owner of a vehicle must consent to its use by another driver. A major consideration is that when you lend your car, you re also lending your insurance. If the person you lend your car to is in a collision for which he or she is found to be at fault, this will be reflected on your insurance record. Q: Does it cost more to insure a red car? A: The colour of your car does not affect your insurance premium, and, in fact, this information is not even required on an auto insurance application. However, many other variables (such as your driving record, government regulations, and the make and model of your car) are considered when setting auto insurance rates. Simple actions can make a big difference when it comes to protecting yourself, your family and your property. Tenant Insurance Tenants need insurance, too. Landlords have relatively few legal obligations to compensate tenants for damage to, or loss of, their personal possessions. Tenants, on the other hand, are held responsible for harm they cause to any part of the building, and to others who live or visit there. In other words, as a tenant, you are liable legally responsible if your actions cause damage to your apartment, your neighbour s apartment or the building itself. If you don t have insurance and you leave the bathtub running, your toaster starts a fire or your party guests get out of hand, you may have to pay incurred expenses out-of-pocket. Even if your landlord s or your neighbours insurance covers damage claims, their insurance companies could come to you to recover costs for repairs and/or replacement of the structure of the building or your neighbours damaged property. Your tenant s insurance policy will pay for a lawyer to defend you in court, should there be a need. In addition, you may not think you own anything worth insuring, but what if you had to replace all your belongings at the same time due to theft, fire or water damage? Replacing your clothing alone could cost a few thousand dollars. And that old couch or bed might not look like much, but buying a new one would no doubt be hard on the wallet. Finally, many people don t know that tenant s insurance also covers additional living expenses. If damage to your apartment or a neighbouring suite makes your home Rain barrels are making a comeback because they work. You can use a rain barrel to collect water for your garden during rainstorms, reduce the risk of sewer back-up, save money on your water bill and help the environment. Did you know that if each household in a community of 55,000 used rain barrels to collect rainwater, it would keep 2.5 million gallons of water the equivalent of five Olympic swimming pools from entering the sewer system?

6 Controlling Your Premiums To ensure you re getting the most out of your home, car or business insurance, review your policy carefully and follow these premium-saving tips: Manage your risks. For example, install a monitored burglar or fire Shop around and compare. Be honest about alarm system in your home or business and install an approved theft the type of coverage you need. Details matter. deterrent system in your vehicle. Request a higher deductible. Your premiums Look for policy-bundling discounts. If you already have auto insurance with one company, ask about buying home insurance from will be lower if you agree to increase the amount of a claim you are willing to pay out of your pocket. that same company. uninhabitable, you will have to find temporary accommodations. Any costs above and beyond your normal living expenses would be covered by your tenant s insurance policy. And if there is a mass evacuation of your neighbourhood because of a fire, explosion or other insured peril, your tenant s insurance policy would cover your hotel expenses. When you consider what it would cost to pay a liability claim, defend yourself in court, replace all your possessions or stay in a hotel if you don t have access to your apartment, paying as little as $20 in monthly insurance premiums seems pretty good by comparison. Home-based Businesses Does your home insurance policy provide coverage for your homebased business? Almost never. Home insurance policies are designed, and priced, based on the risks associated with occupying the dwelling as a home. When you add a business under the same roof, the level of risk changes. Home insurance policies often contain exclusions or limitations that restrict coverage for the activities and property of a business. If you are operating a home-based business even a small start-up you need to advise your insurance provider, or it could jeopardize the insurance coverage on your home. Your insurance provider might ask you these or other questions to identify any extra insurance needs: Are you dealing with hazardous products that might increase the risk of fire? Do you have samples or products on your premises that might make your home a target for thieves? Do you have customers or clients coming onto your premises? You should also advise your insurance provider if you are using your vehicle for business purposes. Driving your car in heavy daytime traffic can increase your risk, and should be accounted for in your policy so that you re protected. Operating a small business in your home can work in your favour. If you are around your home more often, it can reduce some risk. For example, you are less likely to be burglarized when daytime activity is apparent. Once your insurance provider knows the nature and scope of your business, you can discuss the amount of insurance you need to protect yourself. And don t forget to factor in liability coverage. If a client trips on your front step, you could be sued. In many cases, your clients and suppliers will want evidence of business liability insurance. But regardless of whether liability coverage is required by others, you ll want to have proper insurance coverage to protect your investment in your growing business. Watershed Awards: The Watershed Awards is an annual awards program presented by Insurance Bureau of Canada (IBC) and the Federation of Canadian Municipalities (FCM). The newly launched awards join FCM s Awards of Excellence, which recognize the best in municipal achievement. The Watershed Awards recognize leadership in watershed management, adaptation to climate change and sustainable community development Watershed Awards were presented to the following communities in May: Edmonton, Alberta National Winner Saanich British Columbia Saskatoon, Saskatchewan The Prairies and the North Toronto and Richmond Hill (co-winners) Ontario Saint-Jerome Quebec Appleton and Glenwood, Newfoundland (joint submission) Atlantic Canada

7 Adapting to Climate Change: The Waterloo Project As Canadian society attempts to minimize the damage to the economy caused by climate change, a new study at the University of Waterloo will be among the first to explore precisely what needs to be done and what the priorities should be.funded by Intact Financial, Canada s leading property and casualty insurance company, the study takes a methodological approach that draws on multiple disciplines and perspectives. Led by Blair Feltmate, professor and director of sustainability practice in the university s School of Environment, Enterprise and Development, Climate Change Adaptation Project: Canada will first run climate models to project temperature, wind and precipitation data for all the regions of Canada 20 years and 40 years in the future, comparing them to present-day statistics. This will give us the framework within which we have to adapt, explains Feltmate. The researchers will then present the data to a team of approximately 35 experts from industries such as mining, forestry, petroleum, financial services, agribusiness and utilities, as well as from government services and public policy backgrounds, and subject matter specialists in diverse fields such as biodiversity and eco-immigration. Given the best predictions of our models, these experts will identify in concise fashion the two or three key issues that need to be addressed for major Canadian industrial sectors, the property and casualty insurance sector specifically, and a range of disciplines, says Feltmate. Each will then deliver a short 20-minute presentation to an Adaptation Advisory Committee consisting of leaders representing industry, capital markets, government, NGOs and academia. For example, if the climate models predict that rainfall will increase by 20% in Western Canada, experts in the forestry industry may say that they will need to upgrade access roads more often, or conduct fewer days of active logging. Utilities experts may suggest a corresponding upgrade to municipal stormwater management systems for western cities. With all the expert presentations in hand, the advisory committee, led by Feltmate and co-chaired by Frank Frantisak, a corporate director and pioneer in the fields of corporate responsibility and environmental sustainability, will then determine five key areas and courses of action for industry and the other disciplines represented, as well as three key areas for the property and casualty insurance industry. Charles Brindamour, chairman and CEO of Intact, will also sit on the advisory committee. Intact s initiative and funding for the project is being undertaken as part of its corporate responsibility mandate. It is laudable that Intact Financial is the sole sponsor of the Climate Change Adaptation Project: Canada, and that the organization is also involved up to the most senior level in providing intelligence, says Feltmate. The employees of Intact identified climate change as an issue of substantial concern, and management listened. Once they begin their deliberations, the experts and the advisory committee will have the benefit of plenty of nearby expertise for information support and assistance. The University of Waterloo s faculty of environmental studies is also the site of the Interdisciplinary Centre on Climate Change (IC3), which conducts advanced research on climate change through interdisciplinary study of its physical causes, impacts on biophysical and human systems and adaptation and mitigation strategies. IC3, with 38 members drawn from four faculties and Environment Canada, is perhaps the leading research cluster in the field of climate change study. Among its research groups are: Waterloo Atmosphere-land Interactions Research Group (WatAIR), which studies factors affecting the availability of water and how conditions of land surface affect the impact of pollutants. University of Waterloo Aquatic Ecology Group (UWAEG), which studies how climate change contributes to the effects of invasive and nuisance species and the ecological effects of nutrients and contaminants in lakes and other water ecosystems. Water Lab, which analyzes long-term environmental records to predict how ecosystems will respond during degradation and recovery phases due to human disturbances and natural phenomena. Environmental and Geophysical Fluid Dynamics group (EGFD), which studies changes in rivers, lakes, oceans and the atmosphere. The final report of the Climate Change Adaptation Project: Canada, which Feltmate says will be concise and userfriendly, will set out the action items with a goal of limiting the impact of climate change and the costs that would otherwise befall the economy. He says the report will be taken to senior levels of federal, provincial and municipal governments, senior management of the full range of industry sectors and associations, and First Nations leaders. It is our goal that this report will not sit on shelves, says Feltmate. We want it to form the basis for practical action that will benefit the economy and society as a whole. Written by John Southerst

8 I couldn t keep up with the speed at which the claim was handled. Colin, customer, Ontario When Colin wrote us a letter to say thanks, he actually wrote us an ad. Thanks Colin. We re really happy that you re happy. After all, delivering a claims experience that is fair, easy and respectful is what we re here to do, every day. Because we believe insurance isn t about things, it s about people. And because as a customer you always come first, it s only fitting that you have the last word. Customer delight is the goal of every service organization. Intact Insurance achieved that goal because of the people that delivered on every aspect of what was promised. Well done. HOME AUTO BUSINE SS Certain conditions, restrictions and exclusions may apply. Products and services are not available in Saskatchewan or Newfoundland. The BIP logo is a registered trademark of the Insurance Brokers Association of Canada (IBAC) used with permission. All other trademarks are properties of Intact Financial Corporation used under license. 2010, Intact Insurance Company. All rights reserved.