Check your policy, know your policy & ask tough questions.

November 12th, 2014

You’ve likely heard about Stuart and Annie Brown, they’re the couple in Markham, Ontario fighting with Johnson Insurance over their insurance pay out. Almost a year ago, the Browns’ home was destroyed by a fire caused by Christmas tree lights. They settled on an amount for the loss of their house, but are still fighting over the value of the contents.

Unfortunately, this kind of story isn’t an anomaly. Following the Alberta floods, we saw insurance companies honouring policies for some homeowners but refusing neighbours dealing with the same damage. Please be assured that the feeling of disappointment and frustration is felt by those of us who understand insurance, as much as it is by those who don’t.

Regularly, we have people call on us to review and advise them on the state of their current insurance policies, both personal and commercial. And regrettably, we often identify major gaps and just how grossly misinformed they are about their coverage. But before we delve too far in, first let’s establish the difference between an insurance broker and an insurance company:

Insurance Broker (Rogers): independent of insurance companies, a broker has the ability to shop around on your behalf, with access to the best products for the greatest value. They take the time needed to ensure that you know and understand all of your options and receive the coverage you need. Your broker is your advocate for the entire insurance process, from new policy to claims.

Insurance Company (e.g.: Johnson Insurance): is just one company, offering only their products and pricing. In a claims situation, they’re both judge and jury. With this setup, you are left alone to advocate on your behalf.

For thirty years, the Browns paid their insurance premiums believing that they had taken the necessary precautions to safeguard their valuables (they insured their total household contents for $396,000.) However, the Brown’s found out after the fire, that there were limits on certain types of contents, such as art and antiques, and therefore they were only covered up to those sub-limits. As the majority of their possessions were in categories with sub-limits, only about a quarter of their contents were covered under their policy. These sub-limits were likely buried deep in the policy language, where few care to look and even fewer understand.

Tragically, if the Browns had known about this, they could have asked Johnson to increase or completely remove the art & antiques sub-limit for a very nominal premium. Now it’s still unclear whether this limit was explicitly communicated to them prior to the fire, but as insurance professionals, it’s our duty to know our clients and our products; to advise and to communicate what their policy entails in terms that they can comprehend. And it’s our responsibility to communicate it to them until they understand.

For many brokers, we work and live in the communities we do business in. We spend years building relationships with our clients, so when claims situations arise after years of getting to know people, seeing families grow and advising them through life changes, we develop a deep responsibility towards them. Following the Alberta floods, in instances where insurance companies refused to pay claims for our clients. In these situations we stepped in without question on our clients behalf and helped them get decisions reversed.

But we get it. Insurance can be boring and most people don’t know or necessarily care to know the differences between an insurance broker and an insurance company.

But we’re here to tell you that there are fundamental differences that you should know.

• We work for you, not the insurance company.
• We take the time needed to ensure that you know all of your options understand them and receive the coverage you need.
• And when the rubber hits the road, as in a claim situation, we’re there advocating for you, not the insurance company.

Regardless of whether you choose an insurance broker over an insurance company, the most important thing is to find a provider you trust and that has your best interests in mind.

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