Common insurance questions

Answers to common home insurance questions you may have are provided below. Also provided below is information on Square One and its home insurance underwriter. Should you have any other questions about your home insurance policy, Square One, or Square One’s home insurance underwriter, please feel free to call 1.855.331.6933 or email us.

How can I reduce my monthly home insurance bill?

Take a look at what you are insuring. Some people have insurance for more possessions than they actually own. By doing a proper home inventory, you can get a better idea of how much protection you should purchase. If you have been insuring an old sailboat that you know you wouldn’t ever replace if it were stolen, take a look at the premium for that item. On the other hand, make sure you have enough protection for the things that really matter to you. The other way to try to reduce your insurance premiums is to increase your deductible. This essentially means that you are taking on more of the risk. Ask your licensed insurance agent to tell you what the difference would be and decide how easy it would be for you to pay a higher amount in the event of a loss.

How do I know how much to insure my house for?

Insurance companies that offer replacement cost insurance on your house generally determine the amount your house needs to be insured for. They calculate the average cost in your area to rebuild a house to the same standard.

I have a lot of jewelry, do I need to get special insurance?

The amount of extra insurance you purchase for your jewelry depends on whether you would want to replace it if it were lost, stolen or damaged. Jewelry is definitely something that thieves target in break-ins.

Do I get a discount if I’ve had home insurance for more than ten years and I’ve never had a claim?

Every insurance company calculates their insurance rates a bit differently. Some like to offer customers all kinds of different discounts, including claims-free, age, number of years living at the same address, etc. At Square One, we take these factors into consideration when we are determining your monthly premium – it doesn’t show up as one price with a bunch of discounts. Our system calculates it all behind the scenes. Because each company offers different insurance protection and different ways of calculating their prices, it’s important to make sure you are comparing apples to apples.

How will a claim affect my insurance premiums?

In general, you will lose your claims free discount at renewal if you proceed with a claim. At Square One, this discount ranges from 5% to 20%. After you have been three years claims free, you will once again qualify for the discount. And, the longer you remain claims free, the higher your discount will be.

I’m planning on renovating my home. Will I need to change my insurance?

Each insurance company has different rules about renovations, so the best policy is to contact your insurance agent. If you’ve made extensive renovations increasing the value of your home, and you haven’t notified your insurance provider, your coverage may be limited in the event of a claim. If you have a condo, any renovations are usually considered “building improvements”, and require extra coverage on your condo owners policy to be properly insured.

I don’t have a lot of things to protect so why should I buy renter’s insurance?

When you start adding up what it would cost to replace your clothes, shoes, accessories, as well as the basics in your kitchen and bathroom, you’ll be surprised. Use our simple home inventory worksheet to get a rough idea of what your possessions are worth. And, one of the big things that renter’s insurance offers is protection for liability. If you decide to have a party and someone slips and falls on your throw rug, you may be held liable. We all like to think that our friends would never sue us, but is this a risk you want to take?

Do all home insurance policies exclude “Acts of God”?

It’s a common misconception that your home insurance policy doesn’t protect you against “Acts of God”. However, you do need to be aware that most home insurance policies do not protect you against coastal flood. If your home is damaged in a coastal flood, there may be other resources to help you. For example, British Columbians can apply to the provincial Disaster Financial Assistance Program for assistance in the event of loss or damage due to a coastal flood.

What’s the difference between an insurance agency and an insurance company?

An insurance agency (or brokerage) markets and sells insurance to customers on behalf of insurance companies (or underwriters) that actually offer and write insurance policies. In exchange for premiums paid, the insurance company agrees to pay resulting claims insured under the policy. For facilitating the sale of policies, the insurance agency receives a commission or fee from the insurance company. Square One Insurance Services Inc. is an insurance agency and its home insurance policy is underwritten by Pacific Specialty Insurance Company.

Are insurance agencies regulated?

Yes, agencies and insurers are indeed regulated in the US, generally by the Department of Insurance in each state. Consumer protection is provided by those same state DOIs, and that's where a customer would take a complaint.

Are insurance companies regulated?

The short answer is yes, insurance companies (or underwriters) are highly regulated. The type of regulator that supervises a specific insurance company (underwriter) depends on whether that company is registered and operates on a state-by-state or federal basis. In most cases, insurance companies are supervised by the Department of Insurance for each state in which they operate. You can to see if your insurance company is registered in good standing by visiting your state's Department of Insurance consumer website.

Are insurance companies rated by independent third parties?

Yes, there are several independent rating agencies in the industry. A.M. Best is one such agency and it issues the Best's Financial Strength Rating for insurance companies. This rating is an independent opinion of an insurer's financial strength and ability to meet its ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company's balance sheet strength, operating performance and business profile. Insurance companies are rated on a 16 level scale, with A++ being the best rating and F being the worst. Companies with ratings of A++, A+, A, A-, B++ and B+ are deemed to be secure. Anything lower than B+ is considered to be vulnerable by A.M. Best. Pacific Specialty Insurance Company, which is Square One's home insurance underwriter, has a Best's Financial Strength Rating of A.

How am I protected if there is a problem with my insurance company?

Although the failure of an insurance company is a rare occurrence, each state has a system in place to protect consumers. State insurance guaranty associations are funded by insurance companies to protect policyholders and claimants. If an insurance company fails, these guaranty associations will respond to valid claims as long as your insurance company is a participating member. Basically, these guaranty associations are much like the Federal Deposit Insurance Corporation, which protects your savings in case a bank fails. However, these guaranty associations only provide a limited amount of coverage for claims, so it's important that you choose a reputable insurance company with strong financial ratings.

Is it common for insurance companies to fail?

In Canada, it is uncommon for insurance companies to fail. In fact, only one Canadian insurance company has failed in the past 10 years. You can validate this information on the following websites:

In the Canadian market, if an insurance company fails, there is a national guarantee fund that steps in to fulfill the claims obligations of the failed insurance company. This national guarantee fund is called Property and Casualty Insurance Compensation Corporation. There is no national property and casualty insurance guarantee fund in the US; instead, there are state guarantee funds. Each state has its own guidelines as to the assistance they will provide. So, it’s important to ensure the company you are dealing with in the US is financially secure.