Insurance

Jan 28, 2010

By Susan Irwin, Executive Director / Lawyer, Rural Legal Services

Insurance is one of those things that we often don’t think about – until we need it! In fact many of us just tune out when it comes to this topic. After all, there are so many different types to consider: life, mortgage, fire, disability, automobile, wage replacement, critical illness and so forth. Then there is the seemingly endless advertising that assures us of the reliability of older drivers, or else starts with the question “Are you hard to insure?” Unfortunately some types of insurance cannot be ignored. A failure to have proper insurance for your automobile can result in serious and costly trouble, while failure to have insurance on your home can result in tremendous hardship and financial loss in the event of a catastrophe, such as a fire.

Many tenants do not take advantage of special policies that can cover their losses in the event their rental unit and possessions are destroyed. Although the landlord should have insurance on the building to cover his or her losses in the event of a fire, that insurance usually does not offer any coverage to assist tenants in replacing their lost belongings, or finding temporary shelter, etc. As a tenant, you may not think you have enough furniture and so forth to warrant spending $20 or $30 a month for “contents” or “tenants” insurance, but have you actually thought about how much it would cost to replace your property, including all your clothes and items like televisions and computers?

A recent fire that destroyed an 18 unit apartment building in Ottawa and left the tenants with nothing but what they could grab as the flames consumed their homes is a good illustration of the problem. When the CBC investigated the plight of these families, many with no insurance, it discovered that fewer than half of all renters in Canada bother with tenants insurance. For an average cost of $309 a year in 2008, according to Statistics Canada, it is something that every tenant should at least look into: you can’t buy it after the fire or flood! The article can be found at: http://www.cbc.ca/canada/ottawa/story/2010/01/19/ottawa-renters-insurance.html.

While tenants are not required by law to have insurance, automobile owners are, and sometime late this spring or early summer, they should start to receive information about changes to their policies. Reforms are coming to the nature of the mandatory basic coverage. The reforms are supposed to provide many improvements to benefit consumers, and they may actually help to speed up the payment of claims in the event of an accident, but drivers should be warned that benefits are being reduced in many areas dealing with personal injuries. In particular, automobile owners ought to be concerned that there will be significant cuts in coverage for such things as medical and rehabilitation expenses, caregiver payments, and in a whole host of other areas that are of great importance to people who are seriously injured in an accident.

When the information starts to arrive, we would encourage people to look beyond the premium notices, and ask questions about the coverage being offered in the event of serious injuries as the result of an accident. Most companies will likely be providing customers the opportunity to purchase additional coverage to bring them up to the existing minimum levels, and it’s an option worth considering. There are, as the annoying insurance advertisements point out, many things that are either not covered, or not covered fully, under our public health insurance scheme, especially in the area of rehabilitation and physiotherapy. Details of the proposed auto insurance reforms can be found at: http://news.ontario.ca/mof/en/2009/11/ontarios-proposed-auto-insurance-reforms.html 

Like it or not, insurance of one form or another is a fact of life for most people in our society. It is not a bad idea to give it some thought – before you need it.

Legalese is a column of general information and opinion on legal topics by the lawyers of Rural Legal Services, Box 359, Sharbot Lake, ON, K0H2P0, 613-279-3252, or 1-888-777-8916. This column is not intended to provide legal advice. You should contact a lawyer to determine your legal rights and obligations.