Boost Your Insurance Literacy

Boost Your Insurance Literacy bb3 Nov 26, 2012

By Staff Writer

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Knowledge is power―and that holds true when it comes to insurance. The more you understand, the better able you are to protect your two most substantial investments: your home and your vehicle.

“It’s important to get an understanding of various coverages on your auto and homeowners policies,” said Pete Karageorgos, manager of consumer and industry relations for the Insurance Bureau of Canada (IBC), in Ontario. “Look at everything from deductibles to limits, and make sure you have the appropriate benefit levels.”

Through its Consumer Information Centre, the IBC fields more than 14,000 inquiries yearly from consumers with insurance questions.

Some of the most common questions the IBC gets:

Q: How does depreciation work, and how does it affect my roof damage claim?
A: If a storm damages a roof, when the insurer settles the claim they may deduct the depreciated value of the roof. If a roof is designed to last 20 years and is 10 years old when a storm damages it, there is a 50 per cent depreciation in the value.

Q: Why is my auto insurance priced the way it is?
A: Geography and driving history affect price. Pooling of risk occurs in neighbourhoods and territories, and premiums are driven by claims. So if you personally don’t have a claim, but others in your neighbourhood do, you (and everyone in your neighbourhood) may see a higher premium.

Have questions of your own?

Enhance your knowledge of your home and auto policies by taking advantage of convenient resources.

Your State Farm agent. Establishing an open dialogue with your State Farm® agent is the best way to address any questions you may have. “Don’t be shy. It’s best to have questions answered before a situation arises,” said Karageorgos.

The IBC Insurance Literacy Quiz

Take the IBC’s Insurance Literacy Quiz to test your knowledge on home and auto insurance, and build a better understanding on topics such as how the colour of your car affects your auto insurance and whether you need insurance if you rent.

Have other questions? Reach out to the IBC’s Consumer Information Centre, and you’ll get a response from a Consumer Information Officer.

Because insurance protection is a contract, any coverage descriptions or scenarios described in this article are general only and are not statements of contract. All coverages are subject to all policy provisions, including applicable endorsements.