When seeking insurance, you might realize you need answers to some important questions. After all, when you’re not an expert, there’s no way you will know all the nuances of how different types of insurance work. Insurance terms can be hard to decipher for non-professionals, which may make it harder for you to gain the understanding you need. Here are some of the most common insurance questions answered.

• What is the difference between an agent and a broker?
• What is an insurance deductible?
• What factors will affect my insurance rates?
• What is umbrella coverage?
• Can other people drive under my vehicle insurance policy?
• Are there different types of auto insurance?
• What happens if I drive a vehicle without auto insurance?
• Can I change my auto insurance coverage whenever I want?
• How much insurance do I need for my home?
• How is condo insurance different from home insurance?
• How can I reduce my home insurance premium?

What is the difference between an agent and a broker?

Agents and brokers are both insurance professionals who can help you find the right policy, but they function rather differently. An insurance agent usually works for one company, and so they will only sell insurance policies through that company. Brokers, like Northern, will have options with multiple companies and can help you make a more objective choice when comparing policies and coverages.

An agent can be seen as a link between you and the insurance company. They will process paperwork and policy forms for you and can answer any questions you have about your policy. You make an informed decision when choosing your policy and the agent puts it through.

A broker requires a license, has more qualifications, and has more specialized knowledge about types of insurance rather than the specifics of a particular insurance company. They can help you to make a decision about your policy by offering up all the best options that companies have to offer, instead of just one company.

What is an insurance deductible?

A deductible is an amount that you have to pay in the event you need to make a claim on your insurance policy. It is the amount of the loss that the individual will be responsible for before their insurance company pays for the rest of their loss. Once your deductible is met, your insurer will cover any additional expenses that are included in your policy.

What factors will affect my insurance rates?

Insurance is based on probability factors, with statistics being used to decide which rates should be imposed. For example, statistics show that female drivers generally have fewer car accidents than male drivers. Therefore, it makes sense for female drivers to pay a little less on their insurance. Other factors, such as age, location, marital status, vehicle, and claims record also affect rates.

What is umbrella coverage?

Umbrella coverage is a type of insurance that provides you with liability coverage over and above your current policy limits. For example, if you feel you don’t have enough coverage with your car or home insurance, an umbrella coverage policy will give you more liability coverage which can be used for your home or auto policy.

Can other people drive under my vehicle insurance policy?

Anyone can drive a vehicle on your insurance policy as long as they have your permission, are licensed to operate an automobile in Canada, and are not excluded from the policy. Though anyone can drive your vehicle if they meet these 3 requirements, we highly recommend adding any regular drivers to your policy as listed drivers. This is the best way to ensure all drivers in your household have adequate coverage and is a good way to build young drivers’ insurance history so that they can have access to lower premiums once they get their own vehicles.

Are there different types of auto insurance?

In Ontario, there are four types of mandatory auto insurance: Liability, Accident Benefits, Uninsured Automobile and Direct Compensation – Property Damage.

• Liability – protects you if you are sued after another person is injured or killed or if their property is damaged from an automobile claim in which you are deemed to be at-fault
• Accident Benefits – provides financial aid to yourself or your family if you are injured or killed in an automobile accident
• Uninsured Automobile – helps cover damage costs if you are injured or killed by a motorist who is uninsured, or from a hit-and-run
• Direct Compensation – Property Damage – lets you submit a claim for damage to your vehicle when another driver is deemed to be at-fault

At Northern Insurance Brokers, we can also help you find a policy that has optional coverages you need to keep your family and vehicle safe.

• Accident Forgiveness – If you qualify, your premium will not increase as a result of your first at-fault accident.
• Temporary Vehicle Replacement – Provides you with a rental vehicle if your vehicle is in the shop as a result of a covered claim
• Conviction Protection – Can help to keep your rate low in the event of a minor conviction, such as a speeding ticket.
• Waiver of Depreciation – Help protect the value of your brand new vehicle and ensure you’re reimbursed the full value in the event of accident
• And many more tailored to fit your policy

What happens if I drive a vehicle without auto insurance?

You can face serious fines and penalties for driving without it. You can risk a suspension of your license for up to a year, the impoundment of your vehicle for up to three months, and fines up to $50,000.

Can I change my auto insurance coverage whenever I want?

Yes, changes can be made to your policy at any time. There is no fee to change your policy unless your coverages are affected by your change. If you switch insurance companies or cancel your policy mid-term you may be charged a cancellation fee, but you won’t be charged this fee if you wait until the end of your policy term.

How much insurance do I need for my home?

Your home insurance should cover the cost you would need to rebuild your home – not its market value. This is known as your home’s replacement value. You should also cover your contents, which you can consider to be the items you would take with you if you were to move homes.

How is condo insurance different from home insurance?

When you purchase condo insurance, you are buying insurance for space where you live. It will provide coverage for any incident that happens in the interior of your living space. You are not responsible for anything that happens in public areas of the condo.

On the other hand, home insurance will provide coverage for the inside as well as the outside of your house. This includes the structure of your home, other structures on your property and all of your belongings inside and outside of the house.

How can I reduce my home insurance premium?

There are a number of ways to decrease your home insurance premium, including the following:

• Increase your deductible
• Improve the stability or safety features of your home
• Bundle your policies together
• Remove old structures, such as crumbling sheds or garages

Hopefully, this answers some of your questions about insurance. It never hurts to ask – if you’re not sure about another insurance question, send us an email, give us a call, or drop by one of our offices to get some clarification on your policy!

How often should I review my home or auto insurance policy?

Whenever you make a significant change to either your home or vehicle you should review your policy. Changes include:

Home

• Renovations
• Buying new high-value belongings
• Leaving your home vacant for extended periods
• Starting a home-based business
• Adding large structures such as a garage

Auto

• Changing your address
• Buying a new vehicle
• A new driver is using the vehicle
• Using your vehicle for business

If you haven’t made any significant changes, it’s still good to review your home and auto insurance every year.