Helpful Information from the Insurance Broker Association of Canada (IBAC)

How Much Coverage

Much insurance e.g. auto and mortgage coverage is mandatory. There is however considerable variance in the amount of protection you choose to buy. Determining the right amount of coverage for a particular person is one of the things that a broker is trained to help with.

A broker’s experience and professionalism will help you strike the right balance between acceptable risk and the premium you’ll have to pay. You don’t want to overpay for coverage you’re not likely need, but neither do you want to be exposed to unnecessary loss in the event of a claim.

A broker will advise you how to identify the risks you want to be covered for and then shop on your behalf to find the insurance company that offers the best value for your particular needs.

Deductibles

Almost without exception, a deductible clause is included on all policies. A deductible represents the amount the insured is required to pay for each loss before receiving any payment from the insurer. The amount of the deductible is the amount the insured retains or contributes to the loss settlement. The deductible is considered to be a partial retention of the loss amount. For example, if the deductible stated on the policy is $1,000, the insurer is responsible only for those amounts over $1,000.

What deductibles accomplish

The higher the deductible, the lower the premium paid. In consultation with your broker you should aim to select a deductible that you can realistically afford to pay for in a loss situation. The application of a deductible therefore helps to make insurance more affordable. Insurers normally will provide you with deductible options depending on your tolerance to risk.

Claims

What is a claim or indemnity?

The law restricts payment under insurance contracts to only those amounts as are required to indemnify you for your losses. The proper application of the principle of indemnity ensures that people receive the actual amount of their loss, no more and no less.

One of the benefits of having a broker is that if you have an incident, the broker can help take care of all the arrangements on your behalf. Brokers ensure that the necessary steps are taken and information gathered and then file the claim reports. They will also serve as your advocate in the event of any dispute with your insurance company, improving your odds of a prompt and fair settlement.

Why Use A Broker

In Canada, you can purchase insurance a) directly from an insurance company; b) from an agent who represents only one insurer and can only offer that company’s products; c) on the Internet; through a group company or association purchase or d) through an insurance broker who can offer a choice of coverage from various insurance companies.

Insurance brokers do not work for an insurance company, they work for you. That’s the key thing that separates them from all other purchase options. It means you have more advice, more choice, better pricing and a representative that’s on your side in the event of a claim.

What Do Brokers Do?

Unlike other insurance providers, an insurance broker works for you rather than an insurance company. Brokers use their professional knowledge and experience to help you properly assess your insurance needs, shop for the best value in insurance coverage and help you in the event of a claim.

Many brokers will help you with a quote online or over the phone, but personal consultations are encouraged, to answer any questions you may have, ensure there are no misunderstandings and no detail is overlooked.

Their services include:

• Assessing your individual needs and obtaining quotes. Depending on the property, vehicle or business being insured, this might include performing an insurance valuation, taking photographs or obtaining an inspection report.
• Comparing the coverage of different insurers to get you the best rates and conditions in an unbiased manner and making recommendations.
• Searching for opportunities to reduce overall premiums by combining different types of insurance for discounts.
• Explaining premiums, terms, conditions and any small print that you don’t understand.
• Providing administrative follow-up, such as mortgage changes, certificates of insurance.
• Providing advice and revisions at policy renewal or mid-term if material changes are necessary, such as a move or the sale of an asset.
• Being available to answer questions after purchase. The vast majority of brokerages are well established in their community and insurance is their primary business.
• Ensuring claims are fairly handled. They help you with the process and ensure a fair and speedy settlement. Brokers make a positive difference to an insurer’s payout in a substantial number of claims.
• There is no extra cost to you for all the services that a broker provides. A broker is paid a commission through the insurance company that you place your business with, and believes in complete transparency in this regard.

The Broker Advantage

These days there are many different ways to buy insurance, but there are good reasons to consider using an insurance broker’s expertise to help you make the best-informed decisions.

Insurance brokers act as your personal advisor on insurance matters. They work for you, not the insurance company, to make sure your family; your possessions and your business are properly protected. If you have the misfortune of a loss your insurance broker will guide you through the claims process, helping to ensure a swift and fair settlement by your insurance company, to get you back to where you were before disaster struck.

Brokers provide expert, unbiased advice on your individual insurance needs. Unlike other providers who are focused on selling you something, with a broker your interests come first. It is this focus on customer needs rather than their own that sets the broker apart from all other insurance options.

Choice

Brokers have access to a wide selection of some of the best insurers in the country, most of whom do not sell directly to the public. Once a broker has properly assessed your individual insurance needs they do the shopping for you, to find you the right coverage at a competitive price.

Advice

Brokers are licensed professionals. They bring their experience and judgment to their role as your personal insurance advisor. Most important, they are free to make impartial recommendations. Their first and only responsibility is to serve your interests, so it’s advice you can trust.

Flexibility

Most people prefer to have a face-to-face conversation with a broker to discuss coverage, at least at the outset. For most of your dealings with a broker you can communicate in whatever way you are most comfortable with, or that fits into your busy life, such as telephone or email.

Trust

Insurance brokers work to a principle of utmost good faith. Your insurance broker puts your interests first, before those of the insurance companies they deal with. Buying from a broker means you can buy with confidence knowing that the recommended coverage is right for your particular needs. A broker’s advice is independent of any insurance company, so their recommendations are always in your best interests.

Advocacy

If you have to make a claim, your broker is there to ensure that you receive fair and prompt payment, to get you back to normal. In the event of a dispute, your broker will act as your advocate with the insurance company. Experience has shown that a broker’s knowledge and contacts can often help settle a disputed claim. The disappointment of a refused claim lasts much longer than the satisfaction of having saved a few dollars.

Knowledge

Brokers are a wealth of knowledge on all aspects of insurance and other preparedness. They know how to ensure that you get all applicable discounts on the insurance you buy. They are experts at risk assessment and how to properly protect you and your family’s interests with respect to Auto, Home and Business coverage. Professional education is ongoing and put to use on a daily basis, so you can rest assured that the coverage you receive is the coverage you need.

Transparency

It doesn’t cost you any extra to use the services of a broker. Brokers are paid a commission by any insurance company they place your business with, there is no financial incentive for them to pick one over another. What’s more, they are completely open about their transactions and encourage you to ask them about their remuneration.

Responsibility

Brokers act as a local resource centre for safety information and crime prevention. Brokers are part of your community's emergency response team. They will be among the first to respond to your needs in the event of a catastrophe in your community. Buying from a broker means you are investing in your own community.

Benefits

Peace of mind

With over 200 companies providing insurance to consumers in Canada and each offering its own unique coverage, comparing products can be a time-consuming job. A knowledgeable insurance broker can help you find the coverage that’s right for you, for your home, car or business.

Insurance brokers are licensed, but for many of them, insurance is not just a business, it’s a "calling": a deep-rooted desire to help people in their community. In the event of a claim, a broker will guide you through the settlement process. Brokers also advocate on your behalf to insurers, regulators, and government to ensure affordable insurance, choices and innovative products.

Protect Your Interest

Insurance brokers act as your personal advisor on insurance matters. They work for you, not the insurance company, to make sure that your family; your possessions and your business are properly protected. If you have the misfortune of a loss your insurance broker will guide you through the claims process, helping to ensure a swift and fair settlement by your insurance company, to get you back to where you were before disaster struck.

Brokers provide expert, unbiased advice on your individual insurance needs. Unlike other providers who are focused on selling you something, with a broker your interests come first. It is this focus on customer needs rather than their own that sets the broker apart from all other insurance options.

Behind the scenes, insurance brokers have been keeping consumer interests in the forefront of politicians’ minds for over 90 years with respect to access, fairness and affordability. Their integrity is respected by parliamentarians of all stripes.

Consumer's Guide

Your Best Insurance Is An Insurance Broker

As a consumer of insurance, it is in your interest to find a suitable broker to handle your business. You have a responsibility to provide them with honest information about yourself and your circumstances, so that they can make a proper assessment of your insurance needs.

Principles and Practices

Your Best Insurance Is An Insurance Broker

As a consumer of insurance, it is in your best interest to find a suitable insurance broker to handle your business. You have the responsibility to provide fair and honest information about your insurance needs, he or she is pledged to work on your behalf to find the best value for you and to represent your interests to the chosen insurer.