I’m Heather Cournoyer, your commercial insurance expert and I’m coming to you from “sunny” Alberta where the temperature here has risen to a balmy -25 with a windchill of -31. Gotta love Alberta!
In my last video we talked about what to expect in the insurance market for 2020 and the 3 steps to take to prepare.
Review your operation – find ways to manage the risks and exposures in your business to prevent losses.
Review your insurance – Have you changed your operation, have your values changes. Is your business interruption coverage up to date? Do you have cyber and privacy insurance protection.
Lastly – meet with your broker to make sure that your insurance is updated.
So, what happens if you have a claim? That’s why you bought insurance in the first place. I spoke with several claims experts and asked them this question?
What is your best advice to an insured who has had a claim? Here’s what they had to say.
Before you have a loss – Have an adequate inventory and update it on a regular basis. Perhaps you might want to send a copy to your broker or at least keep a copy somewhere safe. Proving your loss is your responsibility and having an inventory of all of your stock and equipment is invaluable.
Minimize the loss to the best of your ability. For example is it’s a water-related claim (which are so common these days) Start cleaning up the water, Rent dehumidifiers help to reduce downtime. Pretend you don’t have insurance. The expert claims manager I spoke to said that not once has he denied reasonable costs to mitigate the claim
Another expert agreed with that and also added that if there is any evidence, retain it! Let’s say you just had a plumber in to fix a piece of equipment and that equipment may have caused the problem. Make sure you keep any parts, take pictures. Your insurer may have the right to subrogate – in other words, perhaps the plumbers negligence caused the loss and he should be held accountable.
Let’s talk about down time. More than likely, a loss can cause a disruption in your business which either reduces or eliminates your income for a period of time. Business interruption is much more common now. And although that is the case, it is still very misunderstood. You need to have good financial records that have monitored the trends in your business. Work with your adjuster and your accountant to help you determine what the amount of recovery may be.
In the event of a third-party claim remember to Be Patient It takes time to get all the facts in. The Adjuster will assess those facts. In auto and liability claims there are two sides to every story and somewhere in the middle lies the truth. Make notes as soon as you can. Pictures are always good too! Peoples memories change over time.
And finally, perhaps some of the best advise
Remember ……. The three C’s
Help your insurer to help you!
Bottom line – insurance is a contract. And if you’ve ever watched Judge Judy she always says – “Everything is in the four corners of the agreement.” In your case it’s an insurance policy.
I know what you’re thinking…whoever reads the policy anyway. It’s too complicated and it’s legal mumbo jumbo.
In our next video, we are going to give you some tips about how that policy is set up and some of the things to look for.
A special thanks to all my “experts” for their input. Great tips for the consumer.
If a member of a farming community lost his barn to fire, the other community members would pool their resources and help that family rebuild. In some cases, it was not voluntary, but required. There are other applications similar where the loss of horses, equipment etc. for one community member would bring the rest of the community together to help. We see a form of that today on social media with ‘Go Fund Me’ campaigns to help those in need of financial assistance after a loss or a medical emergency. A lot of people contributing a small amount each often makes the life saving difference.
People form social groups because there is safety in numbers. As society became more complex the concept of banding together to help people and businesses in their time of loss has evolved. It’s become a financial transaction in a contract of indemnity, which transfers the cost of risk to a third party for a fee. Rather than share time and resources, consumers now pay a premium to an insurance company. In return, the insurance company manages the pool of funds and assumes the risk. Some of us have insured losses and the insurer pays to make us whole, hence the term ‘Indemnity’. Others, who are fortunate enough to have no losses, are secure in the fact that they would be indemnified in the event of a loss, be it property damage or for damages sought as the result of our negligence, alleged or otherwise.
The losses of the few are paid by the premiums of the many.
Insurance rates are currently on the increase for many classes of business across Canada, and consumers are justifiably upset. Many believe it is just another money grab, a way to increase the insurance industry profits at the expense of the consumer. As an insurance industry member, I know how tough it is when costs go up and our income from our business or from our employment is down.
What if insurance as we know it, didn’t exist. Take a look at some facts!
In 2018 Canadian Property & Casualty Insurers (Source IBC Facts Book*)
Paid $39.1 BILLION in claims.
They employed 128,300 individuals
Paid $9.4 BILLION in taxes and levies to federal and provincial governments
Helped recover $23 Million in stolen vehicles
If insurance didn’t exist, would it still be possible to;
Get a mortgage on your home?
Borrow money to buy a new car?
Borrow money to buy stock and equipment for your new business?
Lease space for your new business?
Import/Export and sell goods from/to other countries?
The short answer is NO.
Bottom line is this. The insurance industry and the people in it underpin the economy by financing risk. In any industry there will be dissatisfied customers, people who are confused and need a little extra assistance or education. A little knowledge is a dangerous thing. A more in depth understanding of how the insurance industry works would be helpful in defusing some of that anger and dissatisfaction. The problem is….. where to begin with that explanation? The rules and regulations under which insurers world wide are required to operate add a significant cost element. A good example is in the automobile insurance segment. Government interference in what has become a political issue has resulted in a tide of red ink. No other private or public business suffers this level of interference in their operations. Return on equity figures for the insurance industry would not be acceptable in any other business facing the same degree of risk. An Example? Nobody criticizes the Chartered Banks for their huge profits.
As mentioned above, a little knowledge is dangerous, and that is because it is often out of context. If you want a little more knowledge that is relevant and tailored to your needs and level of understanding an independent broker is your best option. More important is a broker willing to spend the time to provide you with information that is relevant to you. Heather Cournoyer is that kind of broker. Call me and find out. There is no charge for a consultation!
Overall the majority of individuals serving the consumers are doing their best.
If you want to know more check out my previous blogs: