Buyer Beware Informed buyers carefully review their insurance policy and policy limits. Know what to look for when reviewing all sections of auto, home or business policies. 5 Tips When Reviewing Your Insurance PolicyAn insurance policy is a contract between you and your insurance company. When you buy or renew your auto, home and/or business insurance, take time to:Ensure the name and address of the insured individual or business is accurate. A policy cannot be transferred to another person. While typically a new application is required for issuance of a new policy, exceptions do exist.Ensure coverage is as required and that the limits are adequate.Check the location(s) listed to ensure they are accurate.Ensure the insurance company is properly identified.Read the conditions carefully. Many policies require the insured individual or business to comply with all policy conditions before claiming on the policy. Clarify any words that are unclear or undefined in the policy. Look up unclear words in a dictionary to understand their common meaning. If the word has more than one common meaning, ask your insurance representative how it applies to your policy.Utmost Good FaithInsurance contracts rely heavily on the information the insured individual or business provides. Deliberately misstating or excluding important information, or neglecting to inform the insurer of changes, could result in denied claims and policy termination.How to Read An Insurance PolicyHere are the four sections you can expect to see in an insurance policy:DeclarationInsuring agreementsPolicy conditionsExclusions and special limitsWhat risks are covered – a list of coverages purchasedPolicy limits – limits of insurance, and deductibles purchasedThe amount of premium dueOthers who have an interest in the policy (e.g., mortgage holders, lenders)A list of form numbers and endorsements that add to or alter the policyWhat losses are coveredThe subject matter of the insurance and description of the property coveredThe perils insured against – circumstances when the insured may receive the proceeds of the insuranceFor a claim to be valid, it must be covered under the insuring agreement and not stated as an exclusionRequirements the insured must fulfill to maintain coverage:If the insured breaches a condition, the policy can become void or the insurer may refuse a claim arising out of the breachStatutory conditions that the insured or insurer must comply withUnderstand how the law affects your policyCertain property and perils are excluded from coverage.Other insured property may be insured up to a Special Limit.Understand these exclusions and limits to avoid disappointment after a loss. Related ServicesHow Insurance WorksInsurers use a pool of many premiums to pay for the home, auto and business losses of Canadians unfortunate enough to experience a loss. You are covered for losses outlined in your contract only, not for predictable events.How Premiums Are CalculatedWithin reasonable limits, some of which are prescribed by law, your auto, home and/or business insurance premium is calculated to reflect the probability that you will suffer a claimable loss.Where Premiums GoThe premiums of many policyholders pay the claims of the few who suffer a claim. Insurers put premiums toward a mix of claims costs, investments and operational expenses.Insurance MythsLike any industry, a variety of myths surround insurance. Consumers of auto, home and business insurance may have misconceptions about policies and coverage as well as how the industry operates. Learn some key facts about the Canadian insurance industry.ReinsuranceLike other businesses, insurance companies, require protection against risk. Insurers buy insurance from another insurer to reinsure risks they assume. The additional insurer is known as a reinsurer. Useful LinksAuto InsuranceRequired by law across Canada, auto insurance covers the owner/driver, passengers, pedestrians and property affected by a vehicle collision.Buying Home InsuranceAs a homeowner, you need to insure your house for replacement costs so that in the event of serious damage or destruction you have adequate coverage. Be sure to keep your home insurance current by reporting material changes or upgrades.Business Insurance CoverageInsurance protects you from losses that may pose a significant threat to your business operations. A major loss to one organization may be a trivial loss to another. When selecting coverage, deductibles and policy limits, there are many factors to consider.Insurance VendorsInsurance is a significant financial investment so it’s worthwhile to learn about your buying options. You can buy insurance from a broker, agent or direct writer.