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COVID-19 and your insurance

April 14, 2020

As Canadians continue to wage war against the spread of COVID-19, you may wonder what it means for your home and auto insurance.

On March 23, Ontario announced the closure of non-essential business. “We’re prepared to extend the order if necessary,” Ontario Premier Doug Ford said at the time. The closures took effect March 24 at 11:59. Quebec has also shut down business until at least April 13.

RELATED READING: Ontario's list of 'Essential workplaces'

Ontario, however, said in a news release that teleworking and online commerce are permitted at all times. But that still may leave clients with some questions regarding their home insurance.

Q. My employer has set me up to work remotely from home. Should I tell my insurance company I’m doing that?

A. If you’re temporarily working from home it’s not mandatory to let your insurer know. Generally speaking, home insurance will cover your personal belongings including some electronics and personal liability, should you be sued for an injury sustained on your property.

That being said, your home policy may not be adequate to cover expensive company you might use for work. In that case, it would not hurt to talk to your broker and check if to see if extra coverage is necessary.

Given that we are all supposed to be practising social distancing, visitors to your home for business purposes should not be taking place. If that was required for some reason, you should also consider verifying with your provider if there are any endorsements to consider.

According to the Insurance Bureau of Canada (IBC), a home insurance policy offers a small coverage limit for books, tools and instruments necessary for a business, profession or occupation. If you operate a small business from your home on a more permanent basis, however, you should inform your broker and obtain additional coverage.

Car insurance options

As COVID-19 keeps more people working from home, would it make sense to just park your car and save some money on premiums by cancelling your auto insurance? One recent CBC News story out of B.C., said many people who were cancelling their insurance had lost their jobs. But there are some things to consider before you do this:

  • Coverage is the law If you’re driving a car in Canada, having car insurance is not optional. It’s the law.
  • Cancellation fees possible If you cancel your insurance before its expiry date, you may end up paying a cancellation fee.
  • Coverage gaps may hurt Gaps in your coverage may end costing you higher premiums because insurers do consider this when arriving at what you pay
  • Don’t risk the penalties If you are caught driving without car insurance you could face a fine, licence suspension of up to a year or having your vehicle impounded.

One option to reduce costs may be to remove certain coverages if you’re not driving the car and just have a basic level of insurance. This can help reduce the monthly cost significantly.

Whatever you decide, don’t just stop paying your car insurance, because this may result in your policy being cancelled.

If you’re facing financial hardship or worried you won’t be able to make your premium payments due to the impact of COVID-19 IBC recommends contacting your broker or insurer to discuss possible solutions.

“Canada’s home, car and business insurers are here for Canadians. We know Canadians are navigating a new world with changes occurring rapidly within our communities and beyond. Insurers are committed to working with Canadians during these uncertain times,” said Don Forgeron, president and CEO, IBC in the news release.

According to CBC, as of March 29 more than 1.6 millions Canadians have applied for Employment Insurance. If you are directly affected by coronavirus because you are sick or quarantined, caring for someone who is sick or quarantined, you are eligible for benefits. You must have worked a certain number of hours in the previous year, depending on where you live to be eligible. The usual one-week waiting period and requirement for a medical certificate to access these benefits have been waived.

If you have been laid off, or face reduced hours as a result of COVID’s impact are eligible for the federal government’s new Emergency Support Benefit which will provide a taxable benefit of $2,000 a month for up to 4 months.

Starting in April, workers who aren’t typically eligible for EI, such as the self-employed and freelancers, can also apply for the benefit. The benefit will be accessible through a secure portal starting in early April as well as by phone.

The bottom line is if you’re facing financial hardship or worried you won’t be able to make your premium payments due to the impact of COVID-19 the Insurance Bureau of Canada recommends contacting your broker or insurer to discuss possible solutions.

“Canada’s home, car and business insurers are here for Canadians. We know Canadians are navigating a new world with changes occurring rapidly within our communities and beyond. Insurers are committed to working with Canadians during these uncertain times,” said Don Forgeron, president and CEO, IBC in the news release.