Insurance
Insurance is a tool for protecting yourself from financial loss. It’s a contract in which you pay a fee to an insurance provider, and in return, you receive a payment in the event of an insured loss. It can help reduce financial hardship and cover the cost of unexpected events such as theft, illness, property damage, and death.
Insurance basics
You pay a fee called a premium (often a monthly payment), and in exchange, the insurance company agrees to pay you a certain amount of money or replace some or all of your loss if an event covered by your policy happens during the term of your policy. The insurance policy is a contract between you and the insurance company. It includes the details of insurance protection, such as exactly which events are covered and for how much. For example, automobile insurance could pay the cost of repairs to your vehicle if you have an accident, and life insurance could provide your family with money to support themselves when you die.
It’s all about minimizing risk.
The risk of illness, theft, damage, fire, accident, or death is real. Many New Brunswickers choose to minimize the chance of a resulting financial hardship. If you think you may not be able to afford potential financial loss or damage from an unexpected event, then you may consider buying insurance.
Types of insurance
There are many types of insurance available to cover different types of risks. Automobile insurance is mandatory if you own a vehicle. Most other types of insurance are optional. Home insurance is not mandatory; however, most banks will not issue you a mortgage without proof that you have the property insured. You may consider having life insurance needs assessed by a professional advisor, especially if you have dependents or outstanding obligations that would need to be covered even in the event of your death. Similarly, if you travel outside of your province of residence or Canada, you may want to consider travel health insurance.
Tips for buying insurance
Before buying insurance, make sure you fully understand the policy so you know what is and what is not covered. When comparing policies, look at how much coverage the insurance offers, not only the premiums you have to pay. Lower premiums may sound good, but if you do not have enough coverage it could cost you much more in the long run.
Make sure you get the right insurance to meet your needs. Evaluate your situation from time to time—you may need to update your policy after major life events like starting a family, buying a home, starting a business, or buying a new vehicle.
Ask about discounts for buying more than one type of insurance policy from the same insurance company. For example, you may get a discount if you buy your home and auto insurance from the same insurance company.
Get enough insurance. If you make a claim, your insurer won’t pay more than the maximum amount insured by your policy. When deciding how much insurance you need, consider the value of the item you are insuring and the full financial impact of paying for the loss or event yourself.
How to help protect yourself
Any insurance intermediary in New Brunswick, whether they are a resident of the province or not, must have a valid licence issued under the Insurance Act of New Brunswick.
An insurance intermediary includes:
- agents (which includes brokers)
- adjusters
- agencies (which includes brokerages)
- adjusting firms
- restricted insurance representatives
Before you decide which insurance company and insurance intermediary to work with, check our insurance licence databases or email insurance.licensing@fcnb.ca to confirm that the Commission has licensed the insurance company and the insurance intermediary to do business in New Brunswick.
Beware of any email message that claims to be from your insurance company that asks you to confirm or give certain personal information. This could be a scam to obtain information about your personal finances and could lead to identity theft. If you are unsure, contact your insurance company directly.
Do not pay your premiums through a money transfer, cryptocurrency (like Bitcoin), or money wiring service. This is not a normal practice and could be a scam to get you to buy fake insurance.
Maintaining your coverage
To maintain your insurance coverage, make sure you pay your premiums according to the payment schedule. Otherwise, the insurance company may cancel your coverage. If your premiums are not being paid you may not be covered and you should follow up with your insurance provider.
Tell your insurer as soon as possible about any change in your circumstances that may affect the insurer’s ability to cover your loss. For example, your automobile insurer will need to know if you have convictions for driving offences. To renew your policy, you may need to tell the insurer about any changes within a certain period before your current policy ends. Your policy will list the specific procedures you will need to follow to renew your policy.
Making a claim
When you make a claim, you are officially asking the insurer to pay you for a loss or event covered under the terms of your insurance policy. Before submitting a claim, check your policy’s terms and conditions, as well as any exclusions, to see if your loss is covered. Insurance companies will pay only for the specific losses described in your policy. Your insurer will review your policy and advise you whether your claim is eligible under the terms of your contract.
Most insurers have time limits within which you must submit your claim. The limit usually varies from 90 days to 12 months from the date of the loss or event. You should check your policy or speak with the insurance company to verify this. The insurer may investigate the circumstances surrounding your claim to confirm that no fraud was involved.
Cancelling your coverage
If you buy life insurance and have second thoughts, you can check your policy for your options. Most insurers will allow a 10-day review period from the time you received the policy, during which you can cancel the policy. If you choose to do so, the insurance company will refund any premiums you paid. This option does not apply to home and auto insurance.
Typically, there is no penalty for cancelling a life insurance or health insurance policy early, you are only charged for the days the policy was in force. However, with auto and property & casualty (fire), if you cancel your policy before the expiry date, you may have to pay a cancellation fee. Make certain that your new policy is in force before cancelling your previous policy or letting it expire. Otherwise, you may not be covered while waiting for the new policy to come into force.