by Heather Cournoyer | Apr 13, 2022 | Business Insurance, Coinsurance, Commercial Liability, Commercial Property, Premiums
Insurance companies are starting to see profits after several years of disastrous results. Maybe now we consumers will start to save money on our insurance.
“The 2021 industry combined ratio was 85.2%,” PACICC chief economist Grant Kelly and research assistant Zhe (Judy) Peng write in the latest Solvency Matters quarterly report, released Wednesday. “This is the lowest combined ratio ever recorded by Canada’s insurance industry, beating the previous best of 87.5% recorded in 2006.”
Not so fast!
Inflation – that ugly word we all hate. You ask, how on earth could inflation affect insurance rates?
Here’s a few reasons why we won’t be seeing much rate relief.
The CPI (Consumer Price Index) is at 5.7% which is close to a 30-year high. That means costs to us are increasing.
- Labour costs are on the rise due to one of the lowest unemployment rates Canada has seen in many years.
- The supply chain disruptions have led to limits in production which means higher costs.
- Consumer demand has also driven prices up – the standard supply and demand curve.
- Prices for new and used vehicles has increased and repair costs are also on the rise.
What can you do?
There are several ways you can save money on your insurance. Here are three of them!
Review the values on your property
With costs rising, you must increase the amount of insurance to reflect those costs. Most policies provide replacement cost coverage which means if you replace the property or your contents that have been destroyed you will be compensated accordingly. If you don’t review your values, you may find yourself under-insured. Coinsurance Penalties Yes, you may pay a bit more in premium but you could save thousands of dollars in the event of a claim.
Practice loss prevention.
Having a loss is not fun. It creates stress, loss of income, impacts the time you have to spend on your business. Many of those costs are recovered because of your insurance however you will not be covered for your stress or your time. For more information check out some of the recommendations at the Insurance Bureau of Canada Risk Management and Loss Prevention For more information, please reach out to heather@thinkinsure.ca
Save money on your insurance premiums
You will notice that I put this last. Many consumers say they want to save money on their insurance and that becomes their first priority. However, if you haven’t completed steps one and two, you are putting yourself at risk. Speak to me about how implementing loss control measures, increasing deductibles and self-insuring might help you save money on your premiums. Reducing Premiums not Protection
Your insurance protection needs to keep pace with the changes – economic, political, competitive and insurance company results. An annual review with a qualified insurance professional should be part of your business plan.
For more information and a no-obligation, no-pressure review, please reach out. I’m always happy to provide information to help you and your business survive in the event of a loss.
by Heather Cournoyer | Oct 21, 2021 | Auto Insurance, Claims, Government, Industry News, Premiums
Effective January 1, 2022, the Direct Compensation for Property Damage Regulation will change the way vehicle damages are handled in Alberta. Why is the Government changing auto insurance in Alberta and how does that impact you, the consumer?
Why is the Government changing auto insurance in Alberta?
Auto insurance premiums continue to escalate in Alberta for a number of reasons including:
- Newer model vehicles involved in a collision cost more to repair because of the sophisticated computer systems. A small bump can easily cost $2,000 just to reset the systems.
- Alberta is now the vehicle theft capital of Canada. Although Alberta represents only 12% of the Canadian population, we represent 27% of all vehicles stolen across Canada. In 2019 Ontario logged 23,992 stolen vehicles while Alberta came in at 23,535!
- Alberta has more catastrophe claims than any other province in Canada. That includes flood, fire and hail claims.
The Government of Alberta in conjunction with industry realized that streamlining the claims process could save money and help stabilize or even reduce premiums.
How does the Government changing auto insurance impact you, the consumer?
Effective January 1, 2022, if you are involved in an auto collision, you will deal with your own insurance company with respect to your vehicle damages.
- If you are at fault, you must carry collision coverage to recover your losses, subject to your deductible.
- If you are not-at-fault, DCPD will apply and you will still deal with your own insurance company. All insurers must offer a zero deductible option for DCPD.
- If you choose a deductible, this would help reduce your premium, however the deductible will apply to a claim, and you can’t recover the deductible amount from the at-fault driver.
- Fault and/or the degree of fault is now clearly outlined in the Regulation.
How will this affect my claim and my premium?
Because you are now dealing directly with your own insurance company, your damages will be handled more efficiently and without the complications of dealing with the at-fault driver’s insurance company. It also eliminates the costs involved with subrogation. That’s where insurance companies have the right to recover the vehicle damage costs from the negligent at-fault driver.
It is estimated that 42% of drivers will see a reduction in their premiums, 15% no change and 43% will see an increase of premium. These changes will more accurately reflect the cost to repair your vehicle. Owners of less expensive vehicles that cost less to repair will typically pay less for their insurance. Similarly, owners of more expensive vehicles that cost more to repair may pay more. It’s a fairer system for everyone.
Do you have to do anything with regard to your insurance?
No, as the DCPD legislation is automatically effective January 1, 2022. One word of advice, however. If you do not carry collision coverage in your auto insurance contract and you are at-fault for a collision, you will have to deal with your repairs out of your own pocket, just like you do today.
In Alberta, it is the law that you carry a minimum of $200,000 Third Party Liability, Accident Benefits, and soon DCPD coverage. All other coverage remains optional. However, it is important that you understand what the optional coverage includes and also what extensions of coverage you may need. Always speak to your insurance broker to review the options.
Heather Cournoyer, CIB, CIP, is a seasoned insurance professional specializing in serving the
needs of business in Alberta and BC. She believes that consumers need to understand their
insurance program so that there are no surprises in the event of an unfortunate unforeseen loss.
Contact her at heather@thinkinsure.ca or 587-597-5478 for further information.
by Heather Cournoyer | Oct 30, 2020 | Premiums
Many business owners are struggling with decreased revenue and increased costs as a result of COVID. They are asking themselves “Where can I reduce expenses?”
Should I cut staff, reduce wages, downsize my location, reduce marketing and advertising costs? What about insurance? I’ve never had a claim and the premiums keep going up?
When COVID hit in the spring, I was able to save a number of my valued clients money. Many were closed so obviously revenue was down. Because Commercial General Liability premiums are normally rated based on your Gross Revenues and the class of business, reduction in revenue equates to a reduction in risk.
Many business owners are now back in business albeit not at pre-COVID revenue levels. A review of your insurance can help you reduce premiums. Here are some of the things to consider:
- Have your stock levels decreased?
- When was the last time you had a replacement cost appraisal on your building?
- Are there optional add-on coverages that you could do without?
- Are your Gross Sales down considerably?
- Have you changed the use of your automobiles?
- Can you afford higher deductibles?
When and if you do reduce coverage, make sure that you don’t jeopardize your protection. It may be tempting to reduce the amount of coverage on your larger assets. However, remember that most if not all insurance policies have a co-insurance clause. https://heathercournoyer.ca/category/coinsurance/
The few hundred dollars you save could cost you thousands in the event of a claim.
I make it a practice to offer a comprehensive review of any business owners’ insurance at any time. It doesn’t have to be on renewal. In many cases, cancellation fees may outweigh any savings in premium. What I do provide are my recommendation on how to protect yourself by making changes to your existing policy. Because of the value-added provided, many clients choose to utilize my services at the expiry of their insurance.
Reach out anytime! Happy to help.
Heather Cournoyer, CCIB, CIP
587-597-5478
heather@thinkinsure.ca
by Heather Cournoyer | Aug 10, 2019 | Industry News, Premiums
In my May article “What’s going on with my Property insurance? Where’s my quotation?” we talked about increased premiums and the number of insurers no longer writing certain classes of business in property insurance.
Is pricing and availability for Liability Insurance any different? No – not really.
There are certain classes of businesses where many insurers who may have offered coverage are lapsing renewals and not offering quotations for new business.
And here’s news hot off the press. Insurance companies are in business to make a profit just like any other business owner. When a certain class of business is not generating enough revenue to pay for the claims, they will stop writing that class. It’s no different than any other business owner who can’t sell a product at a loss.
Is there anything you can do? Yes. Here are a few tips for you and some examples of classes of business that are prone to higher losses.
1. Know your premises. Are there areas that could lead to a slip and fall claim? Stairs, parking lots. Keep maintenance logs that record time, dates, conditions of inspections. Normally you will want to have one person or department responsible and keep those records for up to 5 years!
Lawsuits arising from slip and fall claims continue to increase both in frequency and severity. Building owners and snow removal contractors are feeling the pressure of increased premiums. As recently as six months ago, I was aware of several Lloyd’s Syndicates and a number of domestic insurers who were still providing coverage for snow removal. The premiums were increasing however coverage was still available.
Now there are fewer domestic insurers writing this class and many of the Lloyd’s Syndicates have pulled out as well. This is not the first time and it won’t be the last. In a Canadian Underwriter Article in 2002, https://www.canadianunderwriter.ca/features/snow-no-mercy/ they speak to some of the issues; under-priced premiums, increased claims for slip and falls and loosely-worded contracts.
2. Be careful when preparing or signing any contracts. Are their ways of limiting your liability or perhaps transferring that risk? Are you assuming a risk you shouldn’t be? Does a Hold Harmless Agreement work for or against you?
Recently I went to use the services or firm who wanted me to sign an agreement holding them harmless should they cause damage to my property, whether they were responsible or not? Do you ever read those agreements before signing them? Might be a good idea.
3. Obtain Certificates of Insurance. You want to ensure that all suppliers and sub-contractors carry their own Liability insurance. In some cases, you may wish to explore being an additional insured on their policy.
Whether you are a business owner or homeowner, anyone hired to work on your premises must carry insurance. Let’s take the example of the homeowner who decides to create that awesome “great room”. The contractor removes the bearing wall and without the proper support, the entire structure of the roof is compromised. Without insurance to back up the subsequent property damage, the homeowner can be stuck with a huge repair bill.
Hot Tar Roofing can not only cause fires but also bodily injury as evidenced by an incident at a school where two children were injured by dripping hot tar. https://globalnews.ca/news/4132444/children-injured-hot-tar-school-roof/
Be proactive in protecting yourself from liability claims. Insurance is not a “guaranteed product”. The inability to get affordable insurance coverage could put you out of business.
Heather is a commercial insurance broker with over 35 years of experience and welcomes any questions or comments you may have. Email her at heather@thinkinsure.ca
