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Auto Insurance premiums have always been a heated topic for many of us residents in the GTA but after meeting with many of our Insurance Companies recently the new hot issue that will impact consumers will be the increased premiums and coverage changes they will be facing with respect to their Home Insurance Policies.  Traditionally the comparison between Home Insurance and Automobile Insurance premiums has made the property product less of a concern for many consumers – but this trend will undoubtedly be changing once we start seeing our upcoming property renewals.  Increased property claims have made Insurance Companies stand up and take notice to the amount of premium they are charging for their Home Insurance products. In one word – Water – will be the greatest impact on the increased Homeowners premium that we will face over the next couple of years. 

Let me provide you with an example of the issue at hand.  My current home does not have a finished basement and as my family continues to grow the need to expand our living area has become a necessity for everyone’s sanity (who knew little people came with such big toys).  As a prudent consumer I have had at least four contracting companies quote me on finishing my basement and the quotes have varied from anywhere from $20,000 to $40,000 based on a 900 square foot basement.  I will undoubtedly have to bight the bullet on this home renovation but this brings us to the issue at hand – many homeowners have spent large amounts of money to make their basements an extension of the living space.  I am a perfect example of how homeowners have changed the exposure for loss for insurance companies.  The time when basements were solely used for storage is now over.     

Now let’s introduce the peril – Water.  As our weather patterns change due to the environment we are seeing more severe rain storms.  This is making it very difficult for Insurance Companies to predict potential losses which means the impact on claims costs are escalating yearly.  To add to the problem many municipalities have not improved their water infrastructures which would assist in minimizing possible water damage losses.  The older the neighbourhood usually means a greater chance for sewer back up claims and Insurance Companies are taking a very aggressive stance against chronic postal codes that have statistically proven to be a detriment to their loss history. 

One of the largest insurance companies in Canada has confirmed the following loss statistics for Home Insurance Policies – in Ontario their personal property loss ratio has increased from 66% in 2006 to 108% in 2009.  To compound the issue is the increase of frequency of claims which has grown for this company from 7800 claims in 2008 to 13,000 claims in 2009 and the average water damage claim is now between $20,000 to $30,000 dollars.  With respect to this company Water Damage claims now make up 46% of personal property claims paid out compared to the peril of Fire which accounts for 23% of claims paid out.  This is an example of how the Peril of Water has now become the greatest risk exposure to homeowners and insurance companies alike. 

The impact of these loss numbers has caused insurance companies to make dramatic changes to their Home Insurance Product.  Within our office we have seen companies increase water damage deductibles from the traditional $500 to a minimum $2,000 on all water damage claims. Some companies will no longer offer Sewer Back Up Coverage in certain postal codes in Ontario.  Another tactic is making home owners invest in preventative measures to minimize the chance for loss after they have encountered a Sewer Back Up claim.  And finally some companies have introduced lower sub limits of coverage which they will offer to their clients to assist in minimizing the exposure of Sewer Back Up loss.  The bottom line is the insurance product we purchase for our homes is not only changing in price but also in coverage.  It is important that you take time to discuss these issues with your insurance provider at your next renewal. 

Well enough of me – I am signing off!  If you would like to discuss this topic further, have an insurance question or need insurance advice, don’t hesitate to contact me at todd@wnatkinson.com

It’s that time of year again the summer is slowly fading and the fall is quickly approaching and with that the children of our community will be going back to school soon.  A great majority of them will be taking school buses yet again or maybe for the first time.  My son will be going to Vista Heights this year in the Junior Kindergarten class and fortunately for him and my wife he will be able to walk to school.  But for many they will be taking a bus to school for the first time.  The news letter we received from the school had indicated that they required parents to follow the school bus to school for the first day so that the children would feel comfortable in the process, especially when they got off the bus.  Here lies the problem for drivers across Ontario and the necessity for everyone to truly relax when they are behind a school bus – quite simply children are unpredictable and they don’t truly understand dangerous situations.

As any parent knows a four year old has his own mind (some times my wife and I like to call it something else but this a family paper) and a curiosity for all things new.  The other problem I find with young children is that they might be small but they counter that with quickness.  The combination of the child’s quickness and there attraction to anything new really provides a driving threat for anyone that is positioned behind a stopped school bus. 

The Ontario Government has recently provided information for all drivers with respect to “Helping Kids Get Back to School Safely”.
Drivers can keep children safe by:

1. Continuing to stop for a school bus when its red lights are flashing as children hop on or off the bus
2. Not obstructing school bus loading zones
3. Keeping aware and alert of the potential for children to dart from between school buses and parked cars or buildings
4. Slowing down and being patient in school zones while watching for children

The McGuinty government has improved school safety by making it mandatory for all school buses to have:

1. Crossing arms to keep children out of the bus driver’s blind spot
2. Added emergency exit windows
3. Better side mirrors to improve the driver’s line of sight

As this is an Insurance Article I am going to take some time to scare you with respect to disobeying school bus safety.  For those impatient drivers that are convicted of Illegally Passing a School Bus it could result in a $2,000 fine and six demerit points – depending on the number of previous convictions this infraction could lead to a possible suspended Licence.  With respect to insurance this ticket is considered a Major Conviction that usually results in a 25% premium surcharge to your automobile insurance. What makes it worse is that for many regular insurance companies a Major Conviction results in insurance policies either being declined for New Business or being Non Renewed at your renewal date.  This would mean turning to Specialty Insurance Companies that deal with high risk drivers or worst a Facility provider.  Both these insurance markets equate to higher base insurance premiums which the surcharge would be applied too.  What compounds the situation even further is the fact all convictions stay on your Motor Vehicle Record for three years and the insurance industry will rate for tickets for the same time period.  The additional insurance cost for this type of ticket would approximately range between $2,000 - $3,000 dollars over a 3 year period.   If you think you are paying high insurance premiums now – just go ahead and pass a flashing school bus. 

Historically I find the police will be targeting this form of infraction for the beginning of the school year so as to get the general public once again thinking about children’s safety. 
My advice to all drivers is to take a deep breath and be patient around all school buses. Make it a practice to try thinking that the next child of the bus is your son or daughter and this might make you think twice about passing the bus illegally.  

Well enough of me – I am signing off!  If you would like to discuss this topic further, have an insurance question or need insurance advice, don’t hesitate to contact me at todd@wnatkinson.com

 I was recently at an insurance seminar and the topic was automobile claims and the presenter showed a vehicle that was involved in an accident with minor rear end damages.  At first the picture represented many claims we see in our office – minor in overall damage to the vehicle and usually something that is repaired quickly.  This accident was like most involving two cars one driver was unfortunately not paying attention and struck another vehicle from behind. These types of accidents are a regular occurrence and somehow this particular accident startled me as an Insurance Broker. 

What made me stand up and take notice in this particular accident was that the driver of the vehicle that was struck became paralyzed from the ensuing impact.  I would argue that for most of us we would equate great personal injury with a horrific accident but not in this case.   Yes the vehicles would be repaired without much payout but the severity of the injuries to the innocent driver would cross an injury threshold that would allow him or her the right to sue the negligent driver and this brings up the ultimate insurance question – do we as automobile drivers in Ontario have the proper liability limits to protect ourselves in this type of scenario.  My personal opinion is no!

Traditionally the common trend for many automobile insurance policy holders is to have a $1,000,000 dollar liability limit.  I quote this particular limit daily.  I know many insurance professionals are trying to educate and recommend higher liability limits but the policy holder has the ultimate decision on the liability limit they want to purchase.  The reality is the minimum liability limit that is required by the Province of Ontario to drive a vehicle is only $200,000 dollars.   Increasing automobile insurance cost has made the decision for many policy holders to increase their liability limits a luxury that they are not willing to entertain.  My argument is that $200,000, $1,000,000 or even a $2,000,000 dollar liability limit is not sufficient to protect ourselves as drivers against an accident that causes such severe personal injury to an innocent third party.

Recent case law in our province shows the need for increased liability limits.  In 2009 a record setting judgement in the amount of $18.4 million was awarded to a 22 year old girl who received a brain injury from an accident that occurred on August of 2002.  The award includes approximately $15 million for future care costs and $1.3 million for future loss of income.  This is believed to be Canada’s largest award to date, surpassing a $17 million dollar award that was recently issued to an injured Ontario man.  Undoubtedly the age of the injured girl played a large part in the overall outcome of this judgement but this award has once again raised the bar and set new precedent in Ontario. 

I think there is a common thought amongst many Ontario drivers that if they caused an automobile accident which resulted in severe personal injury the opposing legal team would only sue for the limits of their liability policy.  The above mentioned case law clearly shows this form of thinking is unfortunately flawed.  I am not suggesting all automobile accidents will equate to the $18.4 million award for personal injuries but the truth lies some where in between.  It’s also important to realize that the insurance company is only responsible for the liability limit that is currently shown on your automobile policy.  Therefore the difference between your liability limit and the final judgement lies solely on the owner of the vehicle and the person driving the vehicle.  

I would strongly recommend you contacting your insurance provider to discuss this matter further and also to find out what insurance products are available to you as a consumer to better protect yourself and your family.  I would personally recommend an Umbrella Liability policy that extends over both your Automobile and Property policies. 
The Umbrella policy gives the consumer the ability to increase their liability limit by an additional $5 million dollars and typically the additional premium for this product is very reasonable.

Well enough of me – I am signing off!  If you would like to discuss this topic further, have an insurance question or need insurance advice, don’t hesitate to contact me at todd@wnatkinson.com