Nov 12, 2013 | News
Nov. 12, 2013, aka 11-12-13, is expected to be a popular day for weddings. And as thousands of couples say I do – or commit to do so over the next few months (39 percent of marriage proposals happen between Thanksgiving and Valentine’s Day) – a new study shows many of these couples are ignoring important discussions about insurance.
A recent survey by the U.S. National Association of Insurance Commissioners (NAIC) cites notable discrepancies between what couples know they should talk about before tying the knot, and what they actually discuss.
The NAIC survey found that before the wedding, many couples had not fully probed topics that affect insurability. For example, while 71 percent of newly married couples acknowledged the importance of sharing beneficiary designations before marrying, nearly half never got around to addressing their life insurance needs before saying “I do.”
“This survey captures a sentiment we often encounter that consumers want insurance education, but often don’t know where to begin,” said NAIC President Jim Donelon.
The survey highlighted several trends common to young couples:
- Though 61 percent of couples ages 18-24 talked about combining auto policies before marrying, only 30 percent cited their spouse’s driving record a key factor in calculating premiums as an important topic to discuss before marriage. In fact, across all age groups, more couples viewed “where we will spend the holidays” as more important to discuss before marriage than their partner’s driving record.
- 84 percent of respondents ages 18-24 said it was important or extremely important to share details about pre-existing health conditions before marriage. But before the big day, only 73 percent had addressed the topic of whose health insurance to keep.
- 62 percent of engaged or newly married couples ages 25-34 rated designating a beneficiary as important or extremely important to discuss pre-wedding, but only 42 percent even broached the subject of whether or not they will have enough life insurance before tying the knot.
The data suggests older newlyweds are just as likely to put off important conversations:
- 85 percent of engaged or newly married couples ages 55+ said a pre-marital discussion about insurance beneficiaries was important, yet only 40 percent exchanged thoughts on life insurance coverage amounts before exchanging vows. In fact, 33 percent of recently married couples ages 55+ had yet to discuss life insurance as long as one year after the wedding.
- Before tying the knot, recently married couples ages 55+ were more likely to have discussed their entertainment budget than their life insurance coverage (50 percent vs. 40 percent, respectively).
To avoid misunderstandings, the NAIC advises couples to schedule a pre-wedding sit-down to directly address auto, home, health and life insurance. Key questions to consider:
- How’s your driving history? Finding out your spouse has a lead foot after saying “I do” can be a shock to your psyche and your auto insurance premiums. If your partner has a less-than-ideal driving record, consider a named-driver exclusion clause, or you may want to think twice about combining coverage.
- Can we afford to renovate our home? As couples merge households, consider what that starter home offers now and will offer in the future. A renovation investment of $5,000 or more can change a home’s replacement value and the house insurance coverage needed.
- Which health plan should we keep? The lowest premium isn’t the only consideration when deciding among health insurance options. To avoid a short-term decision that results in long-term increases in out-of-pocket expenses, review provisions related to cost sharing (deductibles, co-pays and coinsurance) and consider what is not covered by the plan.
- How much life insurance is enough? Now that “I” actually means “we,” couples should insurance needs revisit life insurance coverage. To arrive at a new amount, consider future income potential, the cost of raising children and any outstanding mortgage payments.
Are you prepared to guide your clients through these changes? ILScorp offers specialized continuing education for Life & A/S insurance agents as well as on line insurance training for general insurance agents.
Nov 8, 2013 | News
Alberta’s provincial government is proposing changes to province’s auto insurance system, to better protect consumers from rising premiums, while still giving individual companies more opportunity to make their case for increased pricing.
“Albertans have told us they want increased oversight in their auto insurance rates and we’ve listened. These reforms will set insurance rates that are fair for Albertans and make our already strong auto insurance system even better,” said Doug Horner, Alberta minister of finance and president of the Treasury Board.
The “Enhancing Consumer Protection in Auto Insurance Act” (Bill 39) would allow both mandatory and optional auto insurance premiums to be regulated by the independent Automobile Insurance Rate Board.
Alberta already has legislation regulating mandatory insurance premiums — like third party liability — these proposed changes would ensure optional premiums would also be regulated.
Heather Mack, director of Alberta government relations for the Insurance Bureau of Canada, said consumers should be pleased with increased regulations, which she said could keep premiums down.
“This is definitely good for consumers. But at the industry level, we want less regulation. We want more flexibility, more competition.”
Another proposed change could somewhat appease the industry, Mack said. A file and approve system is being proposed, where each insurer could apply for premium adjustments on an as-needed basis instead of an annual, industry-wide rate adjustment.
“Whereas IBC was the one to present before, just once a year, now companies can present individually at any time. That will increase competition, so that’s a good balance,” Mack told the Calgary Herald newspaper.
But Derek Fildebrandt, Alberta director for the Canadian Taxpayers Federation, told the Herald it could be dangerous to artificially reduce certain premiums through increased regulation.
“When the government tries to keep prices down artificially in one area, premiums might go up in another area. One group of drivers will have to pay eventually, and we don’t know which demographic that will be.
Other changes proposed for the auto insurance system would involve moves to ensure Albertans get improved access to health care after a collision. As well, the Insurance Act could be strengthened in the area of solvency requirements for insurance companies to improve general market conduct. Changes are not being proposed for other components of Alberta’s automobile insurance system, such as the definition of minor injury and the related cap on payouts for minor injuries.
Excerpted from the Calgary Herald
Are you an Alberta Insurance Agent? Have you registered with ILScorp for your online continuing education, insurance training and licensing? See what we offer today!
Nov 7, 2013 | News
November is Financial Literacy Month in Canada, and Canadians are keen to learn more about how insurance affects their finances, according to a recent Pollara survey commissioned by the Insurance Bureau of Canada (IBC). Half of Canadians want to better understand home and car insurance and how it fits into their financial plans and almost 90% think children should learn about home and car insurance at school, according to the survey.
Financial Literacy Month aims to empower Canadians with the knowledge, skills and confidence to make responsible financial decisions in their lives. BMO Financial Group recently released its third annual BMO Financial Literacy Report Card which gauges the personal finance knowledge and understanding of Canadians. The majority of Canadians (91 per cent) give themselves a passing grade for their level of financial literacy. That’s down slightly from 2012 (93 per cent), and up from 2011 (89 per cent). However, according to the report, many Canadians may have a false sense of confidence in their level of financial knowledge. As part of the report card, Canadians were quizzed on three questions related to common financial concepts. The report revealed:
- Nearly one-third (31 per cent) of those who give themselves an “A” were not able to answer more than half of the questions correctly.
- Moreover, while Canadians say they are most familiar with RRSPs, 66 per cent correctly answered that you only pay taxes on RRSP investments when they are withdrawn – down from 80 per cent in 2012.
- Younger Canadians have more trouble with these questions, with only 39 per cent of those under 35 passing the test.
“Understanding how insurance works and how it helps families manage risk is a very important part of financial literacy,” said Bill Adams, IBC Vice-President, Western & Pacific. “After disaster strikes is the worst time for people to learn what coverage their insurance provides. Financial Literacy Month in November is the perfect time for Canadians to increase their knowledge about insurance.”
The Insurance Bureau is urging Canadians to take the time during Financial Literacy Month to find out about their policies. Insurance agents: are you ready to answer these questions for your clients?
Home Insurance
- What does my policy cover and how much insurance do I need?
- Is there a specific kind of insurance for the type of home I live in (e.g., house, condo or apartment)?
- Are there risks I can’t buy insurance for?
- What optional coverage is available?
- Should I make a claim for every loss?
Car Insurance
- If I get into a collision tomorrow, what kind of coverage can I expect under my policy?
- What coverage is mandatory and what is optional?
- Should I purchase collision insurance on an older car?
- What kind of deductible is recommended?
- What factors affect my insurance (e.g. distance driven)?
Business Insurance
- What kind of insurance do I need?
- Are there risks I can’t buy insurance for?
- If my business is home-based, do I need special coverages?
- What does errors and omissions or malpractice insurance cover?
- How is my premium calculated?
Make sure your knowledge is up to date with online continuing education, insurance training and insurance licensing courses from ILScorp.com
Nov 6, 2013 | News
Young Ontario drivers may soon benefit from a new program aimed at cutting vehicle insurance costs for this high risk group.
Ontario parents and their teen drivers could have some relief for the high cost of car insurance, when a variation of a Quebec program by insurer Industrial Alliance comes to Ontario. While it won’t be run by Industrial Alliance, it will be loosely based on its Mobiliz program aimed at 16-to-24-year-old drivers.
The program involves installing a small wireless device in a car’s diagnostic port, designed to measure driving behaviours such as speed, time of travel and distance, hard braking, pace of acceleration and turn speed.
In the past 18 months, the program in Quebec has reduced accident claims by this high risk group by about 40 per cent, allowing Industrial Alliance to reduce the cost these drivers pay for its insurance by an average 23 per cent.
A 20-year-old male insuring his first car typically pays around $3,000 a year in the Greater Toronto Area, so reducing that by $690 is a significant savings.
An application is before the Financial Services Commission of Ontario (FSCO), to launch such a plan. Paul-André Savoie, whose Montreal firm Baseline Telematics is working with a large insurer to launch the program, told the Toronto Star that he hopes to have approval and a product available within three to six months.
“The savings for young drivers will be substantial,” Savoie told the newspaper. “It’s going to be a game changer.”
Savoie’s company developed software that allowed Industrial Alliance to introduce Mobiliz. These telematic products measure how you drive — and the results are available to you and your insurer online.
Suzanne Michaud, a vice president of client services with Industrial Alliance, says the Mobiliz program has exceeded expectations.
“Are we happy? Yes, very much,” she said. The company is a small player in the national auto insurance market and has no plans to bring Mobiliz to Ontario.
Quebec-based Desjardins Insurance introduced a usage-based plan in Ontario last spring. Spokesman Joe Daly says one-third of eligible new customers are trying its Ajusto program and it has 40,000 people in Ontario and Quebec using it.
Daly says the average savings is 12 per cent, though the company says you can earn up to 25 per cent by exceeding all its benchmarks. Unfortunately for many GTA commuters, the scheme penalizes those who drive more than 15,000 kilometres a year. These drivers cannot earn more than a 15 per cent reduction, no matter how well they drive.
Savoie has six projects underway with Ontario insurers, including the one he hopes to see available by the spring. He says insurers are eager to explore the potential of telematics. For example, it can help them target niche markets, whether it is the worst drivers, low mileage drivers or urban vs. rural drivers.
Applying for a Mobiliz policy is easy and quick. The online form asks for your age, gender, postal code and make of car and instantly returns a quote with the monthly payment. Mobiliz price adjustments are made monthly, rather than annually upon renewal. The instant reward is a powerful incentive for young drivers on tight budgets, Savoie says. It pairs good driving with immediate saving.
The use of telematics and usage-based insurance policies is only in its infancy. A recent article on industry website Property Casualty 360 notes that the global market share of usage-based insurance has doubled in the past year. One area where insurers see potential is wearable technology devices that can monitor your heart rate and blood pressure among others.
“Health Insurance companies are starting to take a long look at this type of technology,” says Carole Beatty with SAP Canada.
Excerpted from an article by Adam Mayers in the Toronto Star
Make sure you are up to date with the latest developments in Ontario Vehicle Insurance. Take the ILScorp Ontario Auto Expert Course.
Nov 5, 2013 | News
Your commute home will be extra risky over the next two weeks, as drivers adjust to the end of daylight savings time and changes in their sleeping patterns and driving conditions.
The Insurance Corporation of BC historically sees a 16 per cent increase in the average number of crashes in B.C. during the late afternoon commute in the two weeks following the end of Daylight Savings Time, compared to the two weeks prior to the change.
The biggest impacts can be felt on some of the key skills that affect the quality of our driving – concentration, alertness behind the wheel and reaction time to potential hazards.
“Safety is our top priority, which is why we’re asking drivers to recognize that the effect of the time change combined with increasingly challenging road conditions can increase your chances of being in a crash,” said Todd Stone, the BC Minister of Transportation and Infrastructure. “Make sure you’re well rested, give yourself plenty of time and focus your full attention on the road.”
“Drowsy driving is actually one of the leading causes [of accidents] in North America. It’s very much akin to regular impairment,” said Liz Peters of CAA Manitoba. “It’s like drinking and driving. You’re not focusing on the road in front of you.”
While the fall time change means we can get an extra hour of sleep, according to an ICBC survey, 30 per cent of drivers overcompensate for that extra hour by staying up later and therefore losing any potential benefit of the extra rest.
“We rationalize that extra hour of sleep – many of us think that we can stay awake longer, but we actually end up feeling more tired and less alert,” said Dr. John Vavrik, a psychologist with ICBC. “The time change is an opportunity to get some extra rest and it’s also a good time to think about how we can adjust our driving to the fall and winter road conditions.”
Another study from two researchers at Carnegie Mellon University in Pittsburgh in 2007, found that daylight time has a significant impact on the number of pedestrians killed by vehicles in the immediate aftermath of the time switch in the fall.
People walking during rush hour in the first few weeks after the clocks fall back in the autumn were more than three times as likely to be fatally struck by cars than before the change. There was no significant difference at noon, but there was around 6 p.m.
Here are some tips from ICBC to help you adjust to the time change:
- In darker, poor conditions, visibility is significantly reduced making it difficult to see pedestrians and cyclists on our roads. That’s why it’s important to give yourself extra time so you aren’t rushing and adjust your speed to the conditions you encounter. Always be on the lookout for pedestrians and cyclists – especially at intersections and near transit stops where pedestrians will be coming and going and may not use crosswalks.
- Prepare your vehicle for the change in weather. Clean your vehicle’s headlights and check that they’re all working properly, especially your rear lights. Make sure you have enough windshield wiper fluid and that your wipers are in good condition.
- Keep your regular sleep/wake cycle. Go to bed at the same time you normally would so you can benefit from that extra hour of sleep. Don’t assume you are more rested and alert on the road the mornings following the change as the time change can impact the quality of your sleep and affect your body’s internal clock.
ILScorp now offers two new ICBC Autoplan courses for BC insurance agents.
Nov 4, 2013 | News
Congratulations to the students who are starting a four week challenge today, participating in the ILScorp virtual classrooms. In just four weeks, students are enrolled in the ILS Introduction to General Insurance will complete their level 1 licensing programs. Students will also be ready to write their CAIB exams after taking the CAIB prep classes. ILScorp also offers the Fundamentals of Insurance exam prep as part of the virtual classroom program.
Along with ILScorp’s regular insurance training programs, the virtual classroom provides daily emails and quizzes, and a schedule the keeps students on track to complete the program in just four short weeks.
While this series of virtual classrooms is now under way, the training and licensing programs that it includes can be started anytime. Train at home, online, at your own convenience. The ILS IGI for example, has a more than 80% pass rate for first time licensees. The ILS IGI – Canada’s newest and most up-t0-date insurance licensing course – is accredited for agents working in BC, Manitoba and Saskatchewan. The IGI was written by Steve Hawrishok, original author of the Fundamentals of Insurance program and the Canadian Accredited Insurance Brokers program.
The next virtual classroom begins January 6. Start your new year off with a new career in insurance.
To find out more about our insurance training programs visit ILScorp.com or call us today at 1-800-404-2211.
