Replacement value, actual cash value, deductible, collision coverage, term and mortgage life insurance. These are relatively common-place components of modern-day insurance policies yet many Canadians don’t understand what these terms mean and don’t know whether they are adequately insured, reports by TD Insurance have found.
According to TD’s report on the state of insurance, while the majority of Canadians review their policies at least once a year, 52 per cent of them wouldn’t ask their insurance provider to clarify details they don’t understand in their policies because they think it is too complicated, they don’t have the time and are embarrassed by their lack of knowledge, or they simply aren’t interested in finding out.
Thirty seven per cent admitted they didn’t both to review or even skim over the fine print on their insurance policies. As a result, 23 per cent were upset to learn that they weren’t covered for something they thought was covered and 15 per cent were pleasantly surprised to find out they had more coverage than they thought.
David Minor, a vice president at TD Insurance, encourages people to regularly review their policies, particularly at renewal time or when they reach milestones in life and to talk to their insurance provider if there are things in their policies they don’t understand.
“If you come across conditions you are unfamiliar with in your policy there’s no need to feel embarrassed or daunted to seek help: Speak with your insurance provider whose job it is to clarify questions you have about your policy to ensure you thoroughly understand your coverage and rights and responsibilities as a policy holder,” Minor says.
“When you renew your insurance or reach a milestone in life like buying a new car, a home or completing major renovations, spend some time reviewing your coverage,” Minor suggests. “Your insurance needs may change from one year to the next and your coverage could change too, so call your provider if you have any questions about adjustments or if your coverage no longer reflects your lifestyle.”
Canadians’ lack of insurance knowledge even extends to minor car accidents such as fender benders.
TD Insurance found that although 89 per cent of Canadians are somewhat or extremely likely to know what they should do following an auto accident, only 31 per cent know the exact steps they should take.
“Fender benders resulting from drivers making sudden stops in intersections or pulling out of a parking spot without checking first happen every day, so it’s important to be prepared and know what steps to take afterward,” Minor says. “(They) can affect your insurance coverage, so be sure to review the steps with your insurance provider when you renew your policy each year.”
When speaking to the other party involved in the accident don’t accept money or admit fault for the collision and don’t agree just to forget about it. Accepting money or admitting guilt can affect the coverage their insurance company will provide for the accident.
Check to make sure everyone is safe and no one is injured. If someone is injured, don’t move them because this could make the injury(ies) worse. If you can safely move your vehicle out of the flow of traffic and protect it from further damage, do.
If someone is injured, if you believe there is major damage to your vehicle and if you think a criminal act has been committed, call 911. For non-emergency related collisions where no one is injured and damage is less than $1,000 you might call the police but they likely will refer you to go to your provincial collision reporting centre.
Take notes including details of the accident, identification of the vehicles and the people involved, including emergency personnel or witnesses. If possible take pictures or video and or draw a diagram of the accident scene to help with the documentation of a claim.
Twenty eight per cent of drivers incorrectly believe they only need to report the accident to their insurance provider if their car has sustained significant damage. Most insurance policies require you to report any accident involving loss or damage to people or property. If you don’t report an accident it may affect your coverage later. If the other party notifies their provider, they may contact your provider which could lead to cancellation or non-renewal of your policy if you have not reported the incident yourself.
“At the end of the day, insurance should give you peace of mind,” says Minor. “If you feel uncertain and have questions about the terms and conditions within your policy, ask your insurance provider for clarification before you sign on the dotted line.”
Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.
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