One of the most common clauses in any insurance policy is co-insurance.
Who thought it up in the first place? Co-insurance goes back over 100 years, and is meant as a means to persuade people to buy insurance to the full value of their risk being insured. Let’s take property insurance as an example. Underwriters develop rates which are applied to the amount of insurance you need, to come up with the premium they will charge. A lot of people will appreciate that insurance companies collect premiums from many policy holders, to pay the losses of a few policy holders. But we all know that only a small percentage of the losses are total losses. So, if it is far more likely that you will have a partial loss, why not buy insurance for an amount less than your total property? When an underwriter considers that policyholders might only purchase ‘partial insurance’, they realise that they will not get enough total premium to pay for the losses that do happen. So they would have to charge a higher rate and this could become a slippery slope, as policyholders consider purchasing even lower limits. Or... underwriters could put a clause into their policy, so they will not pay all of a loss when the policyholder has not insured to the full value of their property. They would essentially make the policyholder a ‘co-insurer’.
If you do not have the amount of insurance you should have, the amount you will actually collect from your policy can be estimated with a formula like:
Amount of Insurance I DID buy / Amount of Insurance I SHOULD have bought
X
The Amount of Loss/Claim
=
Amount you Collect.
There are different co-insurance percentages in different policies; such as a requirement that you must insure to 80% of the actual replacement value or 90%. And, there may also be some alternatives to this straight forward co-insurance requirement. You should discuss this with your insurance broker. Click here to contact us.
The Staebler Team got together for our annual Christmas Party celebration on Saturday, December 10th. Check out the pictures by clicking here and don't forget to tag the people you recognize!
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Have you heard about Kate’s Kause? It is a local charitable organization dedicated to inclusive community projects. Kelly Meissner, the founder, along with the rest of the Kate’s Kause team are fundraising to build an inclusive and accessible playground in Elmira, that will service all of the Waterloo Region.
Click here to visit the Kate’s Kause web-site to learn more and please register with the Aviva Community Fund to provide your support. You can access the registration on Aviva’s web-site by clicking here.
Don't forget to like the Aviva Community Fund and Kate's Kause pages on Facebook to receive regular updates! And if you haven't already, make sure you like Staebler Insurance on Facebook.
Ever wonder about the difference in gasoline prices between Canada and the United States? We've found an interesting article that explains the disconnect. Click here to read the article and find out more.
Don't forget to choose Staebler Insurance Brokers to be your trusted provider of insurance solutions and risk management advice.
'Tis the season for kindness, joy and giving
'Tis the season to also beware of credit card fraud and identity theft
Click here to learn more about how to avoid becoming a victim this holiday season.
Staebler Insurance Brokers. Insuring what matters to you most and wishing you a happy holiday season and good fortune in the New Year!
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Staebler Place
871 Victoria Street North
Kitchener, ON, N2B3S4
Canada
| Phone | 519-743-5221 |
| Fax | 519-743-7464 |
| Toll Free | 1-800-321-9187 |
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