However insurance companies found out that rating only based on horsepower is not correct and is not fair. Some automobiles with higher horsepower were less susceptible to be involved in losses (for example because mostly mature and established drivers drive particular types of cars with high volume of horsepower), or when involved, some cars with higher horsepower may have less replacement value and vice versa, cars with less Horsepower may have high replacement value.
Later Insurance companies came to a conclusion that rating vehicles based on MSRP has notable drawback. For example many claims require vehicle to be repaired rather than to be replaced. In this kind of cases MSRP factor does not have any connection to costs that put up actual loss amount. In addition to this, equipment like antitheft devices and airbags do increase MSRP of vehicle, making insurance premiums higher, even though that equipment will lower likelihood of claim or may dramatically reduce cost of claims.
Approach currently practiced by insurance companies in Ontario.
The property and casualty insurance industry gathers and analyzes statistics on the number and cost of collision, comprehensive, direct compensation property damage (DCPD) and accident benefit claims for the most popular Canadian models of cars, passenger vans, SUVs and pickup trucks. This information Insurance companies use as a Main factor for Auto insurance premium formation based on Type of Vehicle.
How it works?
Insurance companies with the Insurance Bureau of Canada assign each vehicle model four digit number and insurance companies submit claims data for each of these car codes. Information from every reported accident contributes to this database and helps determine risk factors for each vehicle model.
For those who are more curious and willing to explore CLEAR data for main types of vehicles driven in Canada, can go through the below link to Insurance Bureau of Canada webpage and download appropriate pdf. or xls. files.
Workers’ Compensation has no elimination period, thus benefits started to be paid just after insured event (disability) occurred.
Workplace Safety & Insurance Board (WSIB)
Workers compensation Insurance in Ontario is carried out by Ontario government agency WSIB. WSIB stands for Workplace Safety & Insurance Board. It used to be called the Workers Compensation Board.
Most businesses in Ontario that employ workers must register with the WSIB within 10 days of hiring their first full or part-time worker. WSIB works like this
If someone misses time from work because of a work-related injury or illness, WSIB pays for loss of earnings. This benefit starts from the working day after the injury or illness occurred. Currently WSIB pays 85% of take home pay. Some limitations are applied to wages that are above industry average for more than 175%.
Loss of earnings (LOE) benefits continue until injured no longer impaired by his work-related injury or illness, or until he no longer has a loss of earnings, or until he reaches age 65.
LOE payments are subject to be paid every two weeks. After 72 months, the LOE benefit be turned to permanent. It may be turned into a lump sum payment if the amount of the benefit is less than 10% of what injured would have received if he/she were unable to work at all. WSIB benefits are adjusted for inflation.
Alternatives utilized in Industry
With the high cost of WSIB many small businesses feel they cannot afford the coverage for all employees, this is why they sublet works they do and allow their subcontractors to opt out and purchase private coverage.
What options do subcontractors have when they have opted out?
Although #3 is actually an option, it is not recommended, because when a subcontractor opts out of WSIB, they still may sue the business. Although mandating a comprehensive alternative does not totally eliminate this risk of a lawsuit, it will drastically reduce their risk and exposure compared to having nothing at all. If you are selecting private coverage, don’t just look at the cost and benefits, pay close attention to the terms, limitations and exclusions of the policy. If you are accepting numerous different coverages, be sure to get a copy of the policy for your subcontractors. It is strongly recommended that you collect ongoing certificates of insurance from your sub-contractors to ensure coverage has been maintained every 90 days.
As an alternative, Disability Insurance has many options and variations, you should contact to your broker to get an advice for most appropriate coverage for you.
Pulling Out of WSIB (read more)]]>
Some companies over the time may offer up to 25% discount on their ordinary car insurance premiums, with 5% enrollment discount for signing up to the program. Premium discounts most Insurance companies provide in each renewal based on previous 12 months of data collected, upon the completion of initial assessment. Normally initial assessment period defined as 180 days.
Once you enrolled to the program Insurance Company mails you Device to be installed in your car. This is a small, easy to install device which is compatible with most of vehicles. Only few vehicles are not compatible with the device. Once you have connected the device, it starts to collect information about your driving behavior and send it via regular cell phone networks to secure servers.
1. Hard Braking
Hard braking increases the risk of being involved in an accident. Insurance company calculates the ratio of hard braking events on total km driven to determine your personalized hard braking factor. Insurance company may define a hard braking event as any decrease of speed for a certain amount of km/h or more in less than 1 second. For this purpose Insurers use around 12 km/h indicator.
2. Rapid Accelerating
Rapid accelerations increase the risk of being involved in an accident. Insurance company calculates the ratio of rapid acceleration events on total km driven to determine your personalized rapid accelerations factor. Insurance company may define a rapid acceleration event as any increase of speed for a certain amount of km/h or more in less than 1 second. For this purpose Insurers use around 12 km/h indicator.
3. Time of day
Driving at night (between 12 a.m. and 4 a.m.) increases the risk of being involved in an accident. Many elements, such as reduced visibility and fatigue, make this time of day the riskiest. Insurance company therefore evaluates the time of day that you’re driving to determine your personalized high-risk period factor. The less you drive at night the more you could save.
Can premiums go up because of driving habits? Most Insurance companies say “NO”, they assert that premiums may have reflected only by means of adjustments in discounts.
Many clients asking what if they have to brake hard to avoid an accident, and whether that will impact on premiums (i.e. reduce discount). Certainly the safety is the first: even the best drivers have to brake hard occasionally. Insurance companies look for the frequency of event and regular driving behavior. So one single case of hard breaking most probably will not have any impact on your UBI discount.
Most Insurance companies who offer UBI products give you access to your personalized website where you can regularly view your driving behavior.]]>
Umbrella policy is recommended to mature, financially stable individuals who have a need for a higher limit of liability than is normally provided under a primary policy. It is also recommended to Parents of Teen Drivers, Single Professionals, Retirees, dog owners, boat owners and etc.
Some notable Features that could be covered under Personal Umbrella Policy
Cases demonstrating why you need umbrella policy
18 year old son drove car and was involved in major at-fault accident with several injured claimants.
Investigation found that he was driving car with no Insurance.
An insured”s daughter hates math class including the teacher. The daughter made several “disparaging” and false remarks about her teacher online.
The teacher sued the parents for personal injury and $750,000 was paid.
One neighbor offered to help varnish the other’s living room floor.
Visiting neighbor went out on the porch for a ‘celebratory cigarette’
Massive explosion, damages neighboring property & results major injuries
Below are some significant advantages of Individuals insurance plans vs mortgage insurance arranged by your lender.
Even though from the first glance contractual risk transfer seems to be more preferable form the point of view of risk management it has several drawbacks:
Hold harmless agreement, known also as indemnity provision, is a contractual agreement where two or more parties sign and agree to transfer the liability from party it normally will lay to the other party. Above stated liability includes expenses for defense as well as satisfying the judgement.
A disclaimer is refusal to accept liability for damages. Due to the disclaimer the plaintiff loses right of recovery. Disclaimers we can see while entering parking lots, or on the back side of parking tickets. Here disclaimer denies any liability of parking operators and owners for damages to the cars and lost property form the cars while parked.]]>
Identifying and analyzing risk exposures:
To Identify and analyse the risk we need first to analyse the segment and the market of the economy we are analyzing with risk exposures and risk history of the particular segment of the economy. We need to identify the possible frequency and severity of risk exposures.
Considering risk management options for each exposure:
There several ways that could be implemented to manage each exposure. Also combinations of such measures could be implemented for the purpose of effective risk management.
Which option or combination of options is appropriate for particular exposure?
Based on the risk particulars such as; tolerance to risks, financial resources particular entity possess, business procedures it has and etc., there is necessity to choose from the above mentioned risk management techniques for each exposure. We need to consider how implementation of above risk management techniques will impact on risk frequency and severity as well as their economical effectiveness.
Implementation of the chosen technique or combination of techniques.
Monitoring the results and implementation appropriate changes to enhance more efficient risk management.
After implementation of appropriate risk management program (particularly insurance program), there is need to continuously monitor operations and loss experience, because circumstances may change through period of the time (production technology, equipment, materials used) and this could have significant impact on risk exposure, and risk management program’s re-evaluation may needed. Risk management program’s re-evaluation may needed, also in cases when the chosen risk management program is not enough effective and losses continue to happen.
The owner of the building can also be the builder or he can hire a contractor to do the work for him.
What does the form cover?
Wrap Up Liability
On larger builders’ risk project, the owner or general contractor arranges one blanket policy covering everyone involved in the project which is called wrap-up liability. The wrap up liability wording consists of the standard commercial general liability wording plus endorsements to named insured. This policy is written only to apply to the specific project.
There are several advantages that encourages builders to arrange this policy. Below are some of them:
Commercial General Liability (CGL)
For small to mid-sized businesses Commercial Property and Commercial General Liability Insurance comes in one single package.
Contractor’s Tools & Equipment
The Tool Floater is used to insure small, mostly portable tools such as hummers, saws, and small power tools.
These coverage designed for businesses that are:
The Equipment Floater is generally used to insure larger and heavy equipment such as that used for road building, excavation , building construction equipment, road maintenance, and snow removal equipment.