Canadian Underwriter

Talk to home and auto clients about changes that may affect premiums

December 23, 2021   by Brooke Smith

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Canadians getting ready to ring in 2022 probably aren’t thinking about insurance coverage.

Clients are required to alert brokers to any changes that might impact their coverage throughout a policy period — regardless of the renewal date, said Anthea McFarland, senior vice president, personal insurance, HUB International Ontario.

However, clients may forget. So brokers might want to give them a gentle nudge about any home and auto changes they’ve made, or plan to make.


On the road
Ask clients about vehicle usage. They could be missing out on discounts or paying a higher classification on their cars than they need to, said McFarland.

“Are they working full-time remote or returning to the office one day a week?” she asked. Cushman & Wakefield reported current trends suggest most office employees globally will be able to return to the workplace in Q1 2022, although rapid spread of the Omicron variant could change that.

What’s more, consider new drivers — not only those with their G1, but those who now have their G2. According to Ontario’s Ministry of Transportation, 700,000 road tests were postponed due to COVID-19.

“We had a lot of clients waiting for their children or themselves to obtain their G2 licences,” said McFarland. “As soon as you do obtain your G2, your broker needs to be informed.”

Ask clients where they reside a majority of the year because that will affect auto premiums.

“A lot of our clients have changed lifestyles,” said McFarland. “They’re now working from the cottage, but their home is in Toronto, which is a much higher rating.”


Home sweet home

No matter where clients call home, residential renovations are on the rise. According to StatsCan, home reno spending from February to June 2021 rose 66%, and Statista found 54% of Canadians planned outdoor renos and 32% planned bathroom renos in 2021.

So, if a client’s done a recent reno, be sure to ask about the extent of that work.

McFarland said redoing a kitchen and remaining in the house, versus relocating because of a major reno, are two very different things.

“We need to insure the builders’ risk for you while your home is under renovation,” she said. “And we need to insure anything you’re taking with you as your personal property, while it’s outside of your home until you return.”

These details are important because clients aren’t necessarily savvy in this area. According go a 2013 TD survey, only 6% of homeowners looked into their policies before they began to renovate, and only 14% asked their brokers if they needed to update policies when renos were completed.


New year, new needs

A new year is also a good time to talk to clients about other insurance coverages, including water.

“Water coverage is very important right now in the homeowner’s policy,” said McFarland. “Ensure your clients are aware of it because it’s always in the event of a loss that there’s the ‘a-ha moment.’”

Liability limits are another. According to McFarland, $1 million in coverage is insufficient. “We’ve been enforcing this with our clients for many years now. We still see $1 million liability but we highly recommend $2 million — which is not a lot more premium for better coverage.”

And while clients may love their homes, they may want to begin vacationing in 2022, presuming COVID-19 risks truly abate. According to a recent World Travel & Tourism Council report, the U.S. travel sector is expected to grow 28.4% in 2022.

McFarland suggested asking clients about an umbrella policy on top of their primary coverages.

“It’s global coverage for them if [they] do decide to travel,” she said. 


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