Canadian Underwriter

Brokers must explain what’s included in homeowners’ policies

September 28, 2021   by Brooke Smith

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Home is where the heart is. But if your clients aren’t passionate about their home insurance policies, it’s your job to help them understand their coverages.

While one part of a homeowner’s policy covers the building itself and the belongings inside, another part is “designed to respond to defend you in the event you were to unintentionally cause harm to another person,” said Alex Gemmiti, service team leader with brokerage Mitchell & Whale.

Unintentional harm could mean a slip-and-fall incident on the property. Harm could also result from activities related to home additions, such as swimming pools and trampolines.

“There may be an elevated element of risk if [homeowners] have those on their property,” Gemmiti said. “Trampolines and pools are rarely used exclusively for homeowners and their families.”

Accidents happen. The Children’s Hospital of Eastern Ontario sees roughly 50 trampoline-related injuries per year. And, according to the 2018 Canadian Drowning Report, 87% of incidents occur in private swimming pools. In addition, 42% of pools had inadequate fencing (or no fence) and 70% had no self-closing gate (or no gate).

“There’s no standard [homeowner’s] policy in Ontario, so it’s really up to an insurance company if they want to provide that coverage [for pools or trampolines] or not. But the majority, and the major insurance companies in Ontario, do include it,” said Gemmiti.

“When it comes to liability insurance, I think the majority of the public doesn’t understand what is covered in it, or what they might need to buy it for. We often times use tools like Google Maps to get an idea of what the home might look like — does it have fences, does it have a pool? — so we can make recommendations, and usually our recommendation is to increase their limits.”

While most homeowner’s policies have a standard of $1 million for liability, Gemmiti generally recommends that clients purchase at least $2 million. “I would suggest that anybody have $2 million nowadays simply because the trends seem to be moving in that direction. Court settlements and lawsuits are oftentimes now exceeding $1 million.”

Gemmiti attributes that to the litigious nature of our society. “Our legal system is becoming more Americanized, where there are opportunities to make money in these situations for some people, and so we see more lawsuits for higher amounts of money,” he said.

However, convincing a price-conscious consumer to increase coverage means explaining the value.

“There’s a general resistance from most consumers when it comes to insurance because it’s already pricey enough,” Gemmiti said. “We try to show the value in what’s available. Oftentimes, increasing from $1 million to $2 million is doubling your coverage — but it’s never doubling your premium. You’re always looking much closer to somewhere under $100 a year difference, so you may be only changing your monthly payments by $2, $5, maybe $10.”

Websites can also go a long way in explaining and providing information for clients. “We’re very involved in blog posts and social media articles to get people questioning their policies and asking questions of their current providers,” Gemmiti said.

Training, too, can help. “All of our sales team members are looking to strike up that conversation with any new potential client because things can often change in the middle of a policy term. Someone may have started insurance with us and not owned a pool and since installed one,” he said. “We always encourage people to let us know when they’ve made changes to their property.”


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1 Comment » for Brokers must explain what’s included in homeowners’ policies
  1. Eldon Gaw says:

    Very good article, thank you for the reminder…

    Worth mentioning in addition to the above, … Decks, loose or missing handrails, or railings, poor or insufficient lighting, loose mats or floor coverings, extension cords and power bars, hot tubs, kids play/climbing structures, swing sets, fire pits, BBQ’s, any propane/electric or NG. appliance outside, antennas, dogs, even outdoor games such as lawn darts, horseshoes, or any number of sports for example tennis or basketball, poor housekeeping in and outside, exterior stairways, … fencing, snow removal or the lack thereof of either. Even food service, related liquor service, and any number of other issues can find a property owner, tenant and or occupier facing a lawsuit.)
    The thing is if it can pose any kind of risk, control the risk, make your company/guests aware of it, and avoid it in anyway possible.

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