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COVID-19 and your insurance

April 1st, 2020  |  Insurance

As Canadians continue to wage war against the spread of COVID-19, you may wonder what it means for your home and auto insurance.

On March 23, Ontario announced the closure of non-essential business. “We’re prepared to extend the order if necessary,” Ontario Premier Doug Ford said at the time. The closures took effect March 24 at 11:59. Quebec has also shut down business until at least April 13.

RELATED READING: Ontario's list of 'Essential workplaces'

The province has said that teleworking and online commerce are permitted at all times. But that still may leave clients with some questions regarding their home insurance.

Q. My employer has set me up to work remotely from home. Should I tell my insurance company I’m doing that?

A. If you’re temporarily working from home it’s not mandatory to let your insurer know. Generally speaking, home insurance will cover your personal belongings including some electronics and personal liability, should you be sued for an injury sustained on your property.w

That being said, your home policy may not be adequate to cover expensive company equipment you might use for work. In that case, it would not hurt to talk to your broker and check if to see if extra coverage is necessary.

Given that we are all supposed to be practising social distancing, visitors to your home for business purposes should not be taking place. But if that was required for some reason, you should also consider verifying with your provider if there are any endorsements to consider.

According to the Insurance Bureau of Canada (IBC), a home insurance policy offers a small coverage limit for books, tools and instruments necessary for a business, profession or occupation. If you operate a small business from your home on a more permanent basis, however, you should inform your broker and obtain additional coverage.

Car insurance options

As COVID-19 keeps more people working from home, would it make sense to just park your car and save some money on premiums by cancelling your auto insurance? One recent CBC News story out of B.C., said many people who were cancelling their insurance had lost their jobs.

If you’re facing financial hardship or worried you won’t be able to make your premium payments due to the impact of COVID-19 IBC recommends contacting your broker or insurer to discuss possible solutions. Your broker has the ability to help you modify coverage or work with the insurer regarding payment options. Each situation is different and can be tailored to the individual needs of a client.

“Canada’s home, car and business insurers are here for Canadians. We know Canadians are navigating a new world with changes occurring rapidly within our communities and beyond. Insurers are committed to working with Canadians during these uncertain times,” said Don Forgeron, president and CEO, IBC in the news release.

Before you do anything, there’s a few other things you need to keep in mind:

  • Coverage is the law If you’re driving a car in Canada, having car insurance is not optional.
  • Cancellation fees possible If you cancel your insurance before its expiry date, you may end up paying a cancellation fee.
  • Coverage gaps may hurt Gaps in your coverage may end costing you higher premiums because insurers do consider this when arriving at what you pay
  • Don’t risk the penalties If you are caught driving without car insurance you could face a fine, licence suspension of up to a year or having your vehicle impounded.
  • Don’t just stop payingThis can result in your policy being cancelled.

But what if you and your partner (or family) have an “extra” vehicle that doesn’t have to be used? Here are some options that could save money:

  1. Temporarily suspend coverage on one vehicle Temporarily suspending coverage is what a number of Snowbirds do for the winter when they leave a vehicle in Canada while they are staying down south. This generally has a minimum time without coverage of 45 days. It could be an option if a person knows they won’t be using the other vehicle for an extended period of time.
  2. Reduce coverage on the second vehicle to comprehensive only. By doing that, however, you leave your vehicle open to theft, vandalism or fire. If the vehicle is stored in a garage, reducing one of them to just comprehensive could be an option for some. It is important to discuss this with your broker in order to be sure you are not exposed or underinsured.
  3. Increasing the deductible on a vehicle can reduce your premium. You can increase your deductible at any time which might reduce the amount of premium you pay. However, if you are involved in an accident after doing so, the savings might not outweigh the increased expense if you are involved in an accident.

The bottom line is, if you are thinking of doing anything talk to your broker first. They will help you navigate the process.

Below you will also find some other useful links to help you through the current COVID-19 crisis. Above all, stay safe everyone!

RELATED READING:COVID-19 and changes to Employment Insurance

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