Insurance - are you covered?

You know you need insurance, but with such a dizzying array of available options, how do you know what coverage is best for you? Here are some tips on insuring your property, your vehicle and your life.

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Property Insurance

“You should have property insurance, whether you own or rent,” says Chartered Accountant Richard Dowling, Chief Financial Officer with Jones Brown Inc. in Toronto. “Property insurance can essentially cover anything you own against a long list of perils. An all-risk policy covers virtually everything, but may also contain exclusions, so be sure to read it carefully.” If you are unsure how much property insurance you need, consult an insurance broker, contractor or appraiser. “When it comes to personal property, no one knows its value better than you,” advises Dowling. “Take some time to do an inventory of items in your home and remember to include both the current and replacement value.” Your property insurance should also cover you in case you are held liable for accidents that people have while on your property, or in case you accidentally damage other people's belongings either in your own house, or somewhere else.

Vehicle Insurance

“Ontario law requires you to carry third-party liability vehicle insurance,” says Dowling. “Although the law requires only $200,000 in coverage, it is wise to have $1 million or more, in order to adequately protect yourself.” Consider physical damage coverage if you have a higher-value vehicle or don’t want to be responsible for replacing or repairing your vehicle if it is damaged. “Keep in mind that it is almost always subject to a deductible,” Dowling cautions. To get the best deal on vehicle insurance, find a broker you trust who will work with insurers on your behalf. “A good deal doesn’t always mean the best price,” Dowling says. “There is always something to be said for building loyalty with insurance companies, and a good broker will help you get good coverage at competitive rates.”

Life Insurance

The amount and type of life insurance you need usually depends on your age, debt obligations, expenses and what would be required to replace your income. “People usually need more life insurance when they have a young family and less life insurance as they age, their obligations decrease and assets grow,” explains Dowling. There are different types of life insurance – including term, permanent/whole life and universal – so consult a broker to find out what is best for you. It’s also a good idea to talk to a Chartered Accountant before purchasing insurance for your property, vehicle or life. “A CA can help you determine the amount of insurance you need by assessing your financial situation, including your net worth and your future financial commitments,” says Dowling.