Understanding Your Policies

Auto Insurance Policies

When it comes to auto insurance, there are a few different types of coverage available and not all are mandatory. In this article you can learn a bit more about each of the coverage types to get a better idea of which ones best suit your needs.

Liability Insurance

You may already know that auto insurance is mandatory for all licensed drivers. However, only liability insurance is the portion of coverage that is required by law. This is the most basic form of insurance which protects the driver from any potential damage or harm incurred while operating a vehicle. For example if a pedestrian is injured, or if property is damaged, the liability coverage would protect the driver from financial loss. In addition, liability insurance protects you from medical costs as well if you’re ever injured in an accident. This form of protection is referred to as Accident Benefits.

Collision Coverage

It’s understandable why liability insurance is mandatory, however an additional type of coverage exists that isn’t compulsory for drivers yet can be very beneficial – collision coverage. This coverage type provides compensation for damage to the vehicle, minus the deductible, whether it is in motion or involved in a hit and run by a third party while parked. This means that a driver does not have to pay the full amount of the repairs to their vehicle out of their own pocket. While collision coverage can be expensive depending on the type of vehicle as well as driving history, it can also offer peace of mind knowing that any collision damage to your vehicle will be repaired.

Comprehensive Coverage

Comprehensive coverage takes collision coverage one step further by providing protection from incidents that occur when the vehicle is not in use, such as vandalism, theft, or natural disasters. Although it is yet another type of coverage to pay for, your vehicle, similar to your home, is a valuable investment that is worth protecting. Comprehensive coverage is typically an affordable add-on so you won’t have to break the bank for the added peace of mind.

Regardless of whether you are shopping around for the bare minimum, or if you are looking to get the best coverage possible, it is important to get competitive rates from as many providers as possible. Let us take care of finding the lowest rates for you so you don’t have to.

Homeowner Insurance Policies

Unlike auto insurance, home insurance is not mandatory. However if you will need a mortgage to make your purchase, as is the case for most aspiring homeowners, then the lender will require you to have an insurance policy in your name. Despite this, it is highly recommended to consider home insurance even if you do have enough capital to purchase a property in its entirety. Home insurance can get complex and below is a summary to help you understand how your most important asset is protected.

Dwelling & Detached Structures

Home insurance provides protection against damage or loss to the building and any detached structures. Most, if not all, standard home insurance policies will protect your home and all other structures within the property from insured perils such as:

• Fire or explosion
• Lightning strikes
• Theft
• Water damage (depends on the scope of coverage under your policy)
• Damage from a vehicle
• Destructive winds
• Other disasters (also depends on your scope of coverage)

Contents

Protects the actual contents of your home as opposed to the building itself. This includes furniture, appliances and electronics, jewelry and more. Depending on your policy and your provider, there may be different limits set for each category. Also, more expensive items such as jewelry or artworks should be added as floaters along with an appraisal to guarantee the value of the items.

Personal Liability

Personal liability is an important coverage type that protects homeowners from legal repercussions and medical costs in the event that someone is injured while on the property.

Uninsured Activities

There are certain activities or exclusions which insurance providers will not cover. These are typically due to situations that put you at much greater risk of an incident. Below are a few examples:

• Home-sharing: a very common activity these days in terms of Airbnb style room rentals, or even renting out the entire home. This would require an endorsement on your policy or even a special risk insurance policy altogether.
• Criminal activity: any illegal activity that causes damage, or even intentional damage done for financial gain.
• Business use: using your home to run any kind of business, regardless of the activities of the business. There are separate insurance policies specifically for home businesses and unless you are explicitly covered under your policy terms, business use is considered an exclusion.
• Moral risk: not taking proper care of your property or disregarding safety concerns that could have eliminated the need for repairs had you done so.

Optional Coverage

These extra coverage types are not often including in your standard policy and can be added as endorsements. The most common ones include:

• Flooding: damage caused by inundations, often called Overland Water Protection.
• Sewer Backup: damage caused by backed up sanitary pipes from city or septic systems.
• Earthquake: protects you from damage to your property in the event of an earthquake subject to a higher deductible than coverage for other perils.

When your policy is put together, it is based on the current information that you provide the insurer. The insurance company will site a list of policy conditions that must be followed at all times in order for you to maintain your coverage. At Oracle-Ottawa, we thrive on answering your insurance-related questions and helping you make the correct decisions any way we can. Speak to one of our talented brokers by phone or email to clarify any questions or issues you may be facing, either as a current or prospective homeowner.