Common insurance questions

Why do people buy home insurance?

Insurance is the best-known way to manage risks. Buying a home is expensive, so it’s a good idea to protect your investment while safeguarding against the risks your home presents. Insurance is also often required by mortgage lenders, like banks.

What type of home insurance is right for me?

The type of policy depends on your living situation. The three main categories of home insurance are homeowners, tenant and condo insurance, but Square One also offers specialized products for town houses, duplexes (or semi-attached), rental properties and vacation properties.

How do I get a quote for home (house, tenant, condo) insurance?

The easiest way to get a home insurance quote is online. You can get an online quote from Square One in as little as 5 minutes.

How do I value my personal property?

Try to collect receipts for more expensive belongings where possible and take a photo of them on your phone so you have a record. For a more comprehensive record, check out Square One’s home inventory worksheet.

What is a home insurance premium?

A home insurance premium (in fact, any insurance premium) is the amount of money you pay in exchange for coverage. Premiums are determined on a case-by-case basis and reflect the risk associated with the property. At Square One, we let customers pay annually, or monthly with no interest charges.

How are home insurance rates determined?

The insurance provider will take into account your personal details (like the age, condition and location of your home), as well as your claims history and the coverages and deductibles you have requested when determining your premium.

How can I get a discount on home insurance?

Increasing your deductible and not claiming for small losses are the easiest ways to get a discount on your premium. Square One also makes it easy to eliminate unnecessary coverages, and the impact of rate increases is reduced for long-term customers. For more tips, visit saving money on your home insurance.

Do I get a discount if I’ve had home insurance for more than ten years and I’ve never had a claim?

Every insurance company calculates their rates differently. Some like to offer customers all kinds of different discounts, including claims-free, age, number of years living at the same address, etc. At Square One, we take these factors into consideration when we are determining your monthly premium – it doesn’t show up as one price with a bunch of discounts.

Our system calculates it all behind the scenes. Because each company offers different insurance protection and different ways of calculating their prices, it’s important to make sure you are comparing apples to apples.

Why do home insurance premiums increase every year?

You may see an increase due to inflation, increased building costs or an increase in the number of claims in your area across the industry as a whole, as these losses must be paid for from your insurer’s only source of income- your premiums. That said, premiums do not always increase – they can decline as well, depending on how severe losses are (or aren’t) over a period of time.

What are the benefits of insurance history?

A continuous insurance history shows your insurance provider that you’re willing to manage the risks faced in owning or renting a home. Having no gaps in your coverage also means you’re never left unprotected. And, if you’ve held continuous insurance for a number of years without making any claims, this may entitle you to lower premiums – because insurance providers will see that you do a good job of managing your risk and preventing avoidable losses.

I’m moving, what should I do?

With Square One, you can transfer your policy to your new home online or over the phone. That way, there’s no gap in your coverage and your property is insured while in transit.

Can home insurance be written off on taxes?

In some cases home insurance can be written off on taxes, but be sure to double check with your accountant.

What’s the difference between an insurance agency and an insurance company?

An insurance agency (or brokerage) markets and sells insurance to customers on behalf of insurance companies (or underwriters) that actually offer and write insurance policies. In exchange for premiums paid, the insurance company agrees to pay resulting claims insured under the policy. For facilitating the sale of policies, the insurance agency receives a commission or fee from the insurance company. Square One Insurance Services is an insurance agency and its home insurance policy is underwritten by The Mutual Fire Insurance Company of BC.

Are insurance agencies regulated?

Insurance is one of the most highly regulated industries in the world. Home insurance is regulated both provincially and federally.

Are insurance companies regulated?

The short answer is yes, insurance companies (or underwriters) are highly regulated. The type of regulator that supervises a specific insurance company (underwriter) depends on whether that company is registered and operates on a provincial or federal basis. It’s probably no surprise that provincial insurance companies are supervised by provincial regulators and federal insurance companies are overseen by a federal regulator. In BC, the Financial Institutions Commission (FICOM), the regulatory agency of the Provincial Ministry of Finance, is responsible for ensuring companies are properly authorized. It supervises the solvency of companies, addresses market conduct issues and maintains a registration system for companies operating in the province.

Federally, the Office of the Superintendent of Financial Institutions (OSFI) supervises insurance companies. It has many of the same responsibilities as provincial regulators. In addition, OSFI also keeps track of broader issues that might have a negative impact on the insurance industry. Square One’s home insurance is underwritten by The Mutual Fire Insurance Company of British Columbia, which is a provincially registered insurance company serving BC, Alberta, Saskatchewan, Manitoba and Ontario.

Are insurance companies rated by independent third parties?

Yes, there are several independent rating agencies in the industry. A.M. Best is one such agency and it issues the Best’s Financial Strength Rating for insurance companies. This rating is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company’s balance sheet strength, operating performance and business profile.

Insurance companies are rated on a 16 level scale, with A++ being the best rating and F being the worst. Companies with ratings of A++, A+, A, A-, B++ and B+ are deemed to be secure. Anything lower than B+ is considered to be vulnerable by A.M. Best. The Mutual Insurance Company of British Columbia, which is Square One’s home insurance underwriter, has a Best’s Financial Strength Rating of A-.

How am I protected if there is a problem with my insurance company?

Insurance companies are required to have their own insurance; this is known as re-insurance. Re-insurance is designed to protect a consumer’s loss if an insurance provider is unable to pay a claim.

Is it common for insurance companies to fail?

In the Canadian market, if an insurance company fails, there is a national guarantee fund that steps in to fulfill the claims obligations of the failed insurance company. This national guarantee fund is called Property and Casualty Insurance Compensation Corporation. In Canada, it is uncommon for insurance companies to fail. In fact, only one Canadian insurance company has failed in the past 16 years. You can validate this information by visiting the PACICC webpage on the topic.

How do claims work with Square One?

If a crime has been committed, first make sure to report the crime to the police, then contact your home insurance provider. Your adjuster will record the details of your loss, advise you on your coverage and deductible, and work with you to determine the best way to repair or replace your damaged property. Most claims are settled through cheque or e-transfer.

Should I be worried about reporting a claim?

You should never be reluctant to contact Square One to report a potential claim. That’s why you have home insurance and why we’re here. It’s best that you contact us even if you ultimately decide not to proceed with the claim. That way we can help assess the situation and determine your best course of action.

What if I can’t provide all required information?

Speak with your adjuster if you’re unable to provide all required information. For example, if you don’t have original receipts or invoices as proof of ownership, the adjuster may accept product manuals or photos.

What is an insurance deductible?

A deductible is the amount of money you have to pay toward a claim before your insurance policy covers the rest. For example, if your home suffers a fire and there is $15,000 worth of damage and your deductible is $5,000, your insurance provider will cover $10,000 of that $15,000. With Square One, because you’re able to choose your own coverage limits and deductibles, the deductible is applied to the coverage limit rather than the loss amount when a claim exceeds the coverage limit.

Does a deductible apply to my claim?

Yes, a deductible applies to every claim. To determine the amount, you will need to refer to your policy declaration. It specifies what amounts you selected by loss type. For example, you may have a $2,500 water backup deductible and a $1,000 standard deductible.

What type of information will be required to settle a claim?

You’ll need to provide your adjuster with the details of your loss, including the value of the property that has been lost or damaged. In some situations, you may also be required to provide proof of value or ownership. Usually, you will be required to:

• Review and sign the Personal Information Protection and Electronic Document Act Consent Form.
• Prepare a written statement of loss, describing what happened in your own words.
• Complete the schedule of loss form, providing details about the lost or damaged property.
• Attach proof of ownership for lost or damaged items.
• Secure and provide quotes for replacement of lost or damaged items.

How do I know if my claim is covered?

Your adjuster will let you know whether your claim is covered or not during the claims process.

How long will it take to settle my claim?

Most home insurance claims are settled within 60 days. Your adjuster will work with you to record the details of your loss and determine the best way to replace or repair your property. Simple, small claims can be completed in a week or less.

How will a claim affect my insurance premiums?

Making a claim on your home insurance policy may cause your premium to rise when it comes time for renewal. Typically, you can expect an increase between 5% to 25%. For this reason, you may choose not to submit a claim for small losses, especially if your policy has a large deductible.

What happens if I have multiple claims?

Home insurance premiums are based on the assumption that the average person will have no more than one claim every 5 to 7 years. If you have more frequent claims, you will likely experience one or more of the following:

• A substantial increase to your policy premiums.
• A change to your policy terms and conditions.
• A notice of cancellation or non-renewal.

If you receive a notice of cancellation or non-renewal, you will have the difficult task of finding a new provider. You may end up having to insure with a specialty company at much higher rates.

Should I make a claim for a small loss?

Your policy has a deductible, which is the portion of the loss you’re responsible for. If your claim is less than your deductible, which is noted on the first page of your Policy Declaration, it likely doesn’t make sense to make a claim. When you apply for insurance, your claims history has an impact on the premium you are charged, so again, making small claims may not be in your best interest. That said, insurance is designed to protect you, so it’s up to you.

Can I change my mind when filing a claim?

Yes. Simply inform your insurance provider that you no longer wish to pursue a claim.

What’s the difference between a claims adjuster and an agent?

An agent is an employee of an insurance provider who advises clients on their insurance needs. An adjuster works with customers in the event of a claim to record the details of the loss and determine the best way to repair or replace property.

Do I have to use the contractor that the adjuster brings in or can I choose my own?

You are generally free to choose your own contractor, provided your adjuster is satisfied with the pricing that is offered and the ability of the contractor to perform the work that needs to be done.

What’s the difference between Actual Cash Value and Replacement Cost?

When your insurance provider pays a claim, they’ll first determine the cost to replace your property- the Replacement Cost. If your claim is being settled on an actual cash value basis, the value of depreciation will then be subtracted. So, Actual Cash Value = Replacement Cost – Depreciation. Square One provides replacement cost on personal property coverage and guaranteed building replacement coverage when customers insure to our suggested limits.

On what basis will my claim be settled?

In most situations, claims are settled on a “Replacement Cost” basis. That means the actual cost to repair, replace, or rebuild, whichever is less, with like kind and quality. If the exact item is no longer available, it would be replaced with a comparable item of similar kind and quality. If you’d like to upgrade an item, you can do so, but you would need to pay the difference.

Do I have to replace all lost or damaged items?

If you decide not to replace all the items, most policies will offer you the “actual cash value” for those items. “Actual Cash Value” is calculated as the replacement cost less depreciation. For older items, substantial depreciation will result in a low settlement. Square One policies, on the other hand, will apply “limited depreciation” of no more than 50% to most items that you choose not to replace.

I’ve experienced a break-in. What should I do?

First, call the police and report the crime. Then, call your home insurance provider and record the details of your loss while it’s fresh in your memory. Your adjuster will begin the claims process and work with you to determine the best way to repair or replace your property. If the break-in has left your home vulnerable to further losses, take reasonable steps to mitigate that risk.

How do I get homeowner’s insurance?

You’ll need to complete an application containing details of your home and your insurance history. If the insurance provider accepts the risk, they’ll issue you a policy, though sometimes you’ll need to meet certain conditions first. To get started, get a quote online quote from Square One in just five minutes.

How much is homeowner’s insurance?

The cost of your premium depends on a variety of factors, the most important of which are the type of coverage you select and the cost to rebuild your home in the event of a loss. If you own a condo, you can get insurance from Square One for about $40/month. If you own a detached house, you can get house insurance from Square One for about $75/month.

How much homeowner’s insurance do I need?

With Square One, you can choose your insurance limits. We provide a recommended limit based on how much it would cost to rebuild your home. If you insure to this limit, we include Guaranteed Building Replacement Coverage. This means we guarantee to replace your home in the event of a loss, even if it costs more than the limit of your coverage.

Is homeowner’s insurance required by law?

No… but there’s a catch. If you finance your home with a mortgage, chances are the mortgage provider will require you to have insurance before they’ll release funds. This is to protect their investment in your home. But, if you’re buying a house outright, you have every right to self-insure.

I’m planning on renovating my home. Will I need to change my insurance?

Renovating a home presents a different set of risks to your insurance company. Make sure to contact your provider and tell them about all the changes you’re planning on making before you start. There may be additional fees to pay.

What do home insurance inspectors look for?

Risks. A home insurance inspector may visit your property to check its condition and to check for any hazards which may increase the possibility of losses. With Square One, you can skip this process by uploading photos directly to your online account, thus saving on inspection fees.

What does condo insurance cover?

Condo insurance covers your personal property, personal and premises liability. Some policies (like Square One’s Condo Owner’s Protection) also protect against assessments made against your unit by your condo corporation as a result of covered losses, as well as any upgrades made to your unit by you or previous owners. (None of this is covered by the insurance provided by your condo corporation.)

What does my condo corporation cover?

Condo corporations generally provide basic insurance that covers the cost to rebuild your unit and any common areas to their original standard in the event of a loss. To protect your property, liability and any improvements made to your unit, you’ll need to purchase additional coverage.

How much condo insurance do I need?

That depends on the value of your personal property and whether your condo has any upgrades or improvements. (Renovations are usually not covered by your condo corporation’s policy.) As a rough guide, $30,000 in personal property, $25,000 Additional Living Expenses and $2,000,000 in liability should cover a studio or one-bedroom apartment.

Is condo insurance mandatory?

No. In fact, most condo corporations provide insurance for the building itself. However, owners have little/no control over the details of these policies, and they provide no coverage at all for the owner’s belongings, unit improvements or liability. You’ll need your own condo insurance for this.

What is Condo Owner’s Protection coverage?

Condo Owner’s Protection (COP) is Square One’s premium insurance offering for condo owners. COP includes Coverage for Upgrades and Additional Condo Owner Protections.

Coverage for Upgrades

If you live in an older building, upgrades may have been done before you purchased the unit. In the event of a loss, you may find that the condo corporation is only willing to replace your marble countertops with the Formica laminate of the original build. Square One will help you determine if upgrades have been made to your unit and make sure they’re properly covered.

Additional Condo Owner Protections

Condo Owners Protection also protects against any shortfalls in your condo corporation’s insurance which they decide to levy against you and amounts assessed against your unit for repairs to common areas of the building. Finally, if your condo corporation is forced to make a claim with their insurer, Condo Owner’s Protection covers you in the event that they decide to spread the cost of their deductible between the unit owners.