What really happens if your car is deemed ” a total loss”?


Most of us have a pretty good understanding of what collision coverage is.  It is coverage to help replace/ repair damage to your own vehicle caused in an auto collision.  But, do you what happens when the car is deemed  a “total loss” and do you understand what sort of pay out your policy will give you?

In the event of a total loss you are entitled to the Actual Cash Value of the vehicle.  What does this mean?  Well in the simplest explanation it would be what you pay to buy the same vehicle, with similar age, kms, and condition.

That sounds simple enough but how exactly does the adjuster come up with this amount?  The best way to figure is to look on Autotrader for vehicles the same as your own, take away the highest valued one and the lowest, and somewhere in the middle is your ACV. You also need to understand that just because a vehicle is listed for $7500.00 it doesn’t mean that it is selling for that amount, so the ACV would be what you might actually pay for that vehicle—perhaps you would offer $6800 and then agree on $7000 even.

So if you are driving a 2003 Honda Civic with 230 000 kms on it, it is safe to say your total loss settlement will not be what you paid for the vehicle 5 years earlier when it had 140,000 kms on it and was only 8 years old instead of 13.  Similarly, what happens if you are driving  a 1999 Honda Civic that you bought a year ago for 1500, but you have put a custom exhaust system, stereo, light kit etc. on it totaling about $7000 in aftermarket costs?

The hard truth:  Unless you have advised your agent/broker of these customizations to the vehicle and increased the value of the vehicle you are insuring, your payout will be that of a basic 1999 Honda civic with the same kms.  If this is making you panic inside because this scenario sounds like it is a little too close to home, please call your agent now.

What if you have a brand new vehicle that you are driving off the lot? How can you protect your investment?  There is an endorsement you can add to your policy that is called “ limited waiver of depreciation”.  This endorsement allows for that traditional depreciation that happens when you drive off the lot, to not apply if you find yourself in a total loss situation and can protect you for up to two years following the purchase.

It is common misconception that since the question is asked on the auto application what you paid for the vehicle, that in the event of a total loss that is what you are being paid out.  This is simply not the case.  Vehicles are one of the fastest depreciating things we own, and they are almost never worth what paid for them, when a total loss does happen.



Why Tenant’s Insurance?


Tenants insurance is one of the most little talked about things in the insurance world.  When you buy a new home, generally you have a mortgage and therefore insurance is a requirement, not a choice.  However, as a tenant you may not even think about insuring your belongings until it is too late, and you have already suffered a loss. For very little premium (average cost is around $20 per month), tenant’s insurance is one way to ensure that you are covered.

The biggest misconception is that the landlord must have insurance, so therefore I must be covered.  This is wrong.  The landlord’s insurance will cover the building itself, but without renter’s insurance you have no coverage for your belongings/furniture, personal liability, or additional living expenses if you home is inhabitable because of a claim.  And, even if the landlord has liability coverage, you as the renter are not privy to their limits, or what sort of coverage they have. In addition, if someone hurts themselves on the property, the truth of the matter is that they will sue anyone and everyone that could be held responsible, and without renter’s insurance you and you assets are at great risk.

Tenant’s insurance provides this personal liability coverage. This means if you are found legally liable for damage to someone or something and are being sued, this liability insurance protects you.  Just imagine you are staying in a hotel and you accidentally leave a candle burning in your room and go down to the lobby.  Minutes later, you hear the fire alarms sounding and the hotel is evacuated due to a fire.  The hotel could sue you for being responsible for the hotel fire, which could have huge financial damages associated with it.  It is your tenant’s insurance liability that would cover you in this situation.

The best part of tenant’s insurance? Aside from the ability to sleep well at night knowing you are covered, if you have your property and auto policies with the same company you can often get a multi-line discount that can save you up to 10 percent on the auto policy (which sometimes actually pays for the tenant’s insurance itself).



Is Bundling Really Better?


Is it best to have them with the same company?  Besides the obvious convenience factor there are actually  benefits to having all of your insurance with the same company.

Often companies will market bundling of policies to get a discount, North Blenheim included, but is that where the advantage of having all of your insurance with the same company ends?  Not at all.

Did you know that if your vehicle is stolen and you happen to have a lot of stuff in your car (i.e.  laptop, expensive sunglasses,  an overnight bag etc.)  the theft of the vehicle is covered under your auto policy, however the theft of your belongings from the vehicle is a property claim.

Ultimately that means you pay two deductibles and have two claims.

This may be shocking news to some of you , but there is a bright side. First of all, you have insurance so you will be reimbursed for your damages .  And secondly if you are insured with the same company for both policies, often the more expensive of the two deductibles will apply, but the other one will be waived.


What does your home insurance really cover?


Have you ever wondered what your home insurance covers?  Do you know what to do if something happens, and do you know what your coverage is?  The simple answer is that many people don’t.

In the interest of attempting to gain readership, I will refrain from reading the policy wordings and explaining what is covered by a typical homeowner’s policy.  Instead, humour me as I present a few common scenarios and demonstrate how property insurance applies.

Just for fun– What do you do if your neighbour’s tree falls on your house?

No this is not a trick question about whether not the tree makes a sound when it falls, if your neighbour isn’t around to hear it.

If a tree falls on your home, then you must make an insurance claim for the damage to your home.  Contrary to popular belief, you cannot call your neighbour’s insurance company because it is their tree. When you insure your property, you are insuring the risk of something happening to your home.  Whether or not your neighbour’s tree did the damage, doesn’t change the fact that your insurable interest is in your own property.

And conversely, if your tree falls on your neighbour’s home, they can go ahead and call their insurance company because you don’t pay to insure their home each month.


Now let’s imagine that your ten year old child is playing baseball in the back yard and they throw the ball right through your neighbour’s window.  You feel terrible but what can you do?

Well technically the neighbour should have their own insurance to cover damage to their home, but your insurance policy may include something called “voluntary payment for damage”.  The voluntary payment can be made at your discretion to damage done accidentally by a minor, up to a specific limit.

Not only will you be able to save some money out of pocket, but you may be able to keep the peace with the neighbours as well.  The only downside?  You may lose a claims free discount due to this, so I would speak with your agent/broker before putting the claim through.


Well technically the neighbour should have their own insurance to cover damage to their home, but your insurance policy may include something called “voluntary payment for damage”.  The voluntary payment can be made at your discretion to damage done accidentally by a minor, up to a specific limit.

Not only will you be able to save some money out of pocket, but you may be able to keep the peace with the neighbours as well.  The only down side?  You may lose a claims free discount due to this, so I would speak with your agent/broker before putting the claim through.

My third example is as follows:

The hydro goes out for 12 hours in the middle of summer, as it so often does out here in Plattsville (often for a completely unexplained reason) and against your best efforts,  you find yourself with a fridge/freezer full of spoiled food.  What can you do, other than adding it to your compost and heading to the grocery store?


Well, a little known fact about insurance policies, is many, if not all, contain a clause called “ freezer contents”.   This covers a specific limit to food that spoils in the refrigerator or freezer due to a power outage or mechanical breakdown.  As long as you have taken all reasonable steps to prevent this food spoilage, you may be eligible to claim for it.

What should you take away from this you ask?  There is a lot more to insurance contracts than protecting your home against fire losses.  And if you continue to join me as I try to bring this sometimes dull topic to life, you may just learn more about what you pay for every month.


Jewellery Lover? If so, keep reading…


I am shamelessly going to mention my mother in this post.  She has serious love of jewellery and has quite a collection.

I have been telling her for years, in my previous claims career—every time she buys a new piece of jewellery, “You really should call your insurance agent”.

She always said,  “Yes, I know I have to call, I am just so busy, and well , you know,  I have the appraisals in case something happens.”

At which point I ask her, “Mom, where do you think those appraisals will be if the house burns down?”

Unfortunately a large percentage of people are not aware that insurance policies have maximum limits on these sorts of items (highly valuable and easily misplaced/stolen).  If you are one of those people and are counting on your contents limit to provide coverage when a loss does happen, there is a good chance you are about to be disappointed.

So, how can you be sure you have enough coverage?  By providing the appraisals for these valuable items, you can purchase what is called a “personal articles floater” which insures each of your items for their specific appraised value.  This floater is charged for based on the dollar amount that you are insuring, and generally carries a smaller deductible than the rest of your policy. Another advantage of this “personal articles floater”?  It could include additional coverage that your policy otherwise wouldn’t cover.

This is a simple scenario—just send the appraisals to your insurance agent/broker so they can add the correct coverage to your policy. Now, I know not everyone is going to be an insurance nerd like me and call their agent the moment their boyfriend proposes, but I do urge you to stay on top of it.  Advise your agent when you purchase these expensive items, because I promise, you will thank me later.



Accident Benefits Changes in Ontario


How the New Accident Benefits Reforms Could be  Saving Us 20 Dollars in Our Pockets Now, in Exchange for Millions in Coverage Later

Basically, for the past few decades it has been a well-known fact that Ontario has quite generous accident benefits in comparison to other provinces (if you don’t know what accident benefits are, please read my previous post). However as some of you may have heard, those generous benefits are being drastically reduced courtesy of the New Accident Benefits Reforms and their misguided attempts to “decrease automobile insurance premiums”.

The dry facts: A $20.00 savings in your pocket today is costing you millions in the event of an accident

Basic accident benefits do exist under a basic policy without opting into anything additional, however to say these benefits are inadequate is the understatement of the century.

The long and short of it is, that in order to bump yourself up to the complimentary coverage you had prior to June 1st of this year, you will need to talk to your broker/agent and buy up the coverages that apply to you.

The worst part of all is that many people aren’t even aware that these changes are happening ( even after all of the mandatory notices that have been mailed).  Unfortunately by the time you realize that the coverages have been cut in half it might be too late. After all you can’t purchase insurance today to cover an accident that happened yesterday.


You can check out the link  below to  read the Insurance Bureau of Canada’s article on the Ontario Auto Reforms:


What are Accident Benefits?


Accident benefits are the coverages that help pay for your injuries if you are injured as a passenger, driver, pedestrian or cyclist in an automobile accident, and they cover you whether or not you are at fault in an accident. This coverage extends to the passengers of your vehicle as well, so you want to think about those people who are often in your vehicle ( ie. Children, people you are a caregiver for, an ailing parent you regularly drive to appointments etc.).

Accident benefits options include things like income replacement, medical rehab and attendant care, dependent care, death and funeral benefits and home maintenance. Basically all of these benefits are there to cover the costs if you are severely injured in an automobile accident and are unable to carry out your regular duties and everyday life as a result.

Think about it… if you are unable to work, care for your children, or carry laundry up and down the stairs, all because of an injury you sustain in a motor vehicle accident, what will you do?  Who will pay your bills for you, watch the children for free, and come do your laundry for you?  Not to mention pay the growing bill at your physiotherapy office.

Unless you have a large family who has nothing better to do than help you for months at a time, you may find yourself in quite a predicament.

If you want to make sure you have the proper coverage in place and ensure your income and financial security remain intact, you may want to look into purchasing additional optional accident benefits coverages.

Will these optional benefits cost more money?  Yes, haven’t you ever heard of the saying that there is no such thing as a free lunch? However, an increase of  $200 more a year on the average auto policy to buy up most of these coverages will seem like pennies if you find yourself and your family members severely injured in an auto accident.