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The information in this quiz is for the most part applicable to most auto and home insurance policies. However, insurance policies vary from company to company. Therefore it is important for you to check with your insurance representative to understand your own coverage. |
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1. Do you have to insure a car kept in storage? N.
| No. Insurance is required only for cars that are being used on the road. However, you may want to purchase Comprehensive insurance coverage for your stored vehicle. This provides coverage for damage caused by fire, theft, vandalism and/or a falling tree, for example. |
2. Does the government approve auto insurance prices? Y.
| Yes. The business of car insurance is actually highly regulated by provincial governments, who set the minimum coverage levels. Governments keep tabs on how much insurance companies charge for their products. Insurance companies cannot change the basic coverage or premiums without government approval. |
3. If a washer overflows and damages your hardwood, is it covered by home insurance? Y.
| Yes. Home insurance usually includes coverage for damage arising from sudden and accidental escape of water from an indoor plumbing, heating, sprinkler or air-conditioning system; from an indoor or outdoor domestic appliance (defined in your policy) on your premises; or from a water main. |
4. If a roof collapses under heavy snow, is it covered by home insurance? Y.
| Usually, yes. Home insurance typically covers this type of damage, but be sure to check with your insurance representative. Cottages are a different story, however. If your cottage roof collapsed due to the weight of snow it would not be covered. To prevent a collapse, make sure that snow does not accumulate on your cottage roof in winter. Your insurance representative can explain further. |
5. Will home insurance cover flood damage in a spring run-off? N.
No. Home insurance does not cover damage arising from floodwater such as that from an overflowing creek or repeated or surface water run-off resulting from a storm. Because certain areas are prone to floods, damage caused in this way is considered predictable and therefore uninsurable. Talk to your insurance provider to learn more.
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6. Does your home insurance cover you for theft? Y.
| Yes, depending on your policy. Check with your insurance representative. Generally, home insurance reimburses you for financial loss arising from mishaps that are “sudden and accidental” and, therefore, hard to predict and prevent. Theft falls into that category. It’s always a good idea to have a security system installed, and some insurers will offer a discount depending on the system you use. |
7. Does home insurance cover fire damage caused by an unattended candle? Y.
| Yes, home insurance policies cover accidental fire damage. |
8. Will home insurance cover the loss of family photographs? N.
| No. Family photos are truly “priceless.” Despite their tremendous sentimental importance, family photos have no monetary value and are therefore irreplaceable and uninsurable. Be sure to protect these precious items: store negatives outside your home or keep copies of photos on a computer disc so you can duplicate them, if needed. |
9. Are damages caused by tornado covered by home insurance? Y.
Yes. Tornadoes are very dangerous windstorms, and home insurance covers damage from wind. This applies to the outside of a building (except for antennas, satellite dishes, etc.). The interior of a building and its contents are covered only if the storm has first created an opening.
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10. Will home insurance cover damages caused by a hurricane? Y.
| Yes. Home insurance covers damage from wind. This applies to the outside of a building (except for antennas, satellite dishes, etc.). Damage to the interior of a building and its contents is covered only if the storm has first created an opening. |
11. Does home insurance cover damage caused by hail? Y.
Yes. Home insurance covers damage caused by hail. This applies to the outside of a building (except for antennas, satellite dishes, etc.). Damage to the interior of a building and its contents is covered only if the storm has first created an opening.
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12. Does home insurance cover damages caused by an earthquake? N.
| No. If you want to be protected against damages caused by an earthquake, you must purchase this coverage separately. Earthquake insurance generally covers loss or damage to your property caused by the actual shaking of the earth. Cost varies according to location and type of construction. Check with your insurance representative to learn more about earthquake coverage. |
13. Will home insurance replace trees and landscaping damaged by weather? Y
| Yes, depending on your policy. To repair damage to trees and landscaping, most home policies will allow you to apply up to 5% of the amount of insurance on your dwelling. |
14. Will home insurance cover flood damage caused by melting or moving ice and snow? N.
| No. This is not covered; nor is damage from waves or heaving frost. |
15. Should every home have a survival kit with provisions to last 72 hours? Y.
| Yes. Every family emergency plan should include the creation of a disaster safety kit. A disaster kit can help you get through the first 72 hours following a major disaster. For more information about what should be in your kit, click here. |
16. If you’re injured in a collision, will auto insurance pay for your rehab? Y.
| Yes. That is what your insurance is there for – to help you get better following a collision. All drivers are required by law to have a minimum amount of coverage to protect themselves and others. Amounts may vary depending on what province you live in. To learn more, click here. |
17. Will auto insurance pay for lost income due to a car accident injury? Y.
| Yes, to the extent provided for in your policy. (Check with your insurance representative for your policy’s specific details.) Also, depending on what province you live in there may be variations – but all policies have a provision for lost income or income replacement. To learn more, click here. |
18. Are your auto insurance rates affected by where you live? Y.
| Yes. If you live in a bustling city, for example, accidents and vehicle theft are more likely, which may translate into higher premiums. Also, depending on what province you live in, your insurer may consider the claims history of the group to which you belong as a driver – for example, a group of drivers of the same age and in the same geographic location. If you belong to a group that is more likely to make claims, your premiums may be higher. To learn more, click here. |
19. Will my auto insurance policy cover me if I drive my car outside Canada and the United States? N.
No. If you take your car to another country, you will need to arrange insurance in that country. Ask whether your insurer is an international company that is licenced to write business in the country into which you plan to take your car.
For some European countries, a type of auto insurance called “green card” may be available. If so, your insurance company can amend your policy to include the European countries you will be visiting and list them on the “green card.” |
20. Do you pay higher insurance rates if your vehicle is red? N.
No. The colour of your car does not affect your automobile insurance premium. You will not be asked to specify the colour of your vehicle on your auto insurance application. However, many other variables (such as your driving record, how expensive it would be to replace your car, and government regulations) are considered when setting auto insurance rates. Click here to learn more about how auto insurance rates are calculated.
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21. Do you pay higher insurance rates if you take vacations by car? N.
| No. Travelling by car for vacations doesn’t affect insurance rates. Insurers look at how a car is used over time. Generally, the more time a car consistently spends on the road, the higher the chance of an accident. That means higher premiums if you drive a lot, if you drive long distances or if you drive to work every day. |
22. Are insurance rates affected by a car’s origin, either foreign or domestic? N.
| No. There are many variables (including your driving record and how expensive the vehicle would be to replace) that factor into insurance rates, but a car’s origin is not one of them. |
23. Are home insurance rates higher if your appliances are gas? N.
| No. The types of appliances in your home do not affect your insurance rates. |
24. Are home insurance rates higher if your appliances are electric? N.
No. The types of appliances in your home do not affect your insurance rates. |
25. Do you pay higher auto insurance rates if you take your car to work? Y.
| Yes. The more time a car spends on the road, the higher the chance of an accident. That means higher premiums if you drive a lot, if you drive long distances or if you drive to work every day. |
26. Do the types of pipes you have in your home affect your insurance rates? Y.
Yes. Galvanized or lead piping usually means that the plumbing is older and therefore more likely to crack, leak or cause other problems. Insurance companies generally offer lower rates for homes with copper or plastic plumbing.
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27. Does the type of heating in your home affect your insurance rates? Y.
| Yes. Oil tanks can cause costly environmental hazards (the age and condition of your tank are important factors). There is far less risk with forced-air gas furnaces or electric heat, so you may pay more for your home insurance if your home is heated by oil. |
28. Does auto insurance cover the damage to my vehicle if I hit a deer? Y.
Yes, if you have Comprehensive coverage. If your vehicle hits a deer, or any other animal, any damage is considered to be a “collision loss.” Most companies cover this type of collision under the Comprehensive section of an auto insurance policy. Usually, your policy premium will not be affected.
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29. Should I base the amount of insurance I buy on the resale value of my home? N.
No. Your home should be insured for the amount it would cost to rebuild it in the event it was destroyed. This is called the replacement cost and refers to the cost of replacing the building alone, excluding factors such as location, land value and the amount paid for surrounding homes. This amount may be very different from the resale value.
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30. If I make changes to my home, can I wait until the renovations are finished before advising my insurance provider? N.
No. As a homeowner, it is your responsibility to advise your insurance professional right away of any material changes to your home because it affects the cost of rebuilding. Even if you haven’t renovated, you may need to report expensive contents that you’ve purchased. To be sure, always check with your insurance representative.
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31. Can the replacement cost of my home exceed what I originally paid for it? Y.
Yes, for many reasons. Upgrades, renovations and other improvements can make rebuilding your home more expensive than the original cost. Construction on your home may need to meet newer, more demanding building codes. The price of building materials can increase rapidly; in the last three years, some prices have increased by as much as 27%. As well, the cost of demolition and preparing the land to rebuild is included in the replacement cost.
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32. I haven’t updated my insurance policy in a while. Will the amount of coverage available for my possessions be affected? Y.
Yes. Most home insurance policies cover contents up to a specific percentage of the total insured value of the home. If your home is not properly insured, you may not have enough insurance to cover your possessions in the event of serious damage. |
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