Nova Scotia - Insurance Bureau of Canada

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INSURANCE 101When people buy insurance policies, theyput money into a pool with many othersto help the few who will suffer a financialhardship (house fire, auto collision,business interruption, and other types ofinsurable claims) in that year.A premium is based on how likely it isthat the purchaser might collect from thepool by making a claim in a given year.Insurers gather information that theyknow from experience will help them setfair and accurate rates.For example, when calculating yourhome insurance premium, insurersconsider factors such as age, size andlocation of dwelling.For auto insurance, some factors thatimpact premiums include claims history,driving record (and the record of otherdrivers in the household), vehicle make,model and year. Ask your insurancerepresentative about your policies at leastonce a year.Did you know?Both federal and provincialgovernments closelyregulate the insuranceindustry. Provincialgovernments oversee andmust approve auto insurancerates and coverages.Questions to ask your representative:HOME1. What does my policy cover?2. Is there a specific kind of insurancefor a house? A condo? An apartment?3. Are there risks for which I can’t buyinsurance?4. Is optional coverage available for risksnot normally included?5. What can I do to keep my premiumsdown?AUTO1. What does my policy cover if I’minvolved in a collision?2. What optional coverage is available?3. Should I have collision insurance onan older car?4. What size of deductible is recommended?5. What can I do to keep my premiumsdown?BUSINESS1. What kind of insurance do I need?2. Are there perils for which I can’t buyinsurance?3. If my business is home-based do I needspecial coverage?4. What does errors and omissions ormalpractice insurance cover?5. What can I do to keep my premiumsdown?5

LEADERSHIPON ADAPTATIONSevereweatherisn’tgoingaway. A 2012study by NobelPrize-winningclimatologist Dr. GordonMcBean, commissioned byIBC, says Canada can expectmore extreme weather inthe next 40 years. That meansmore floods, storms, wildfires,droughts and hurricanes.For each of the past four years, insureddamage from natural catastrophesin Canada has been near or above$1 billion. In 2012, damage hit closeto $1.2 billion.Helping Canadians AdaptThe insurance industry is taking the leadon helping Canadian communities tobecome more resilient to severe weather.Our work includes:• IBC’s municipal risk assessment tool(MRAT) which identifies storm waterand sewer infrastructure weaknessesto help governments allocateinfrastructure dollars. Halifax is oneof 10 municipalities across the countrythat is now helping test the MRAT.• Working with all levels of governmentand other stakeholders to ensure thatstorm water and sewer infrastructureis a priority in future spending.• A report on “the economic cost ofdoing nothing” about severe weatherrisks in specific regions, towns andcities in Canada, scheduled to becompleted in 2013.• Consumer education on how tominimize and prevent propertydamage. Examples include providingprevention tips on ibc.ca andpromoting the use of stormwatermanagement tools.6Heavy rain that hit Truro, N.S. inSeptember 2012 caused extensive flooding.

HELPING COMMUNITIESPREPAREThe McBean report warns that betweennow and 2050, Atlantic Canada is likelyto see more hurricanes, storms and stormsurges. Nova Scotia could see freezing rainevents increase by 20%.Along with assisting to rebuild in thewake of disaster, the insurance industry isactively helping Nova Scotians prepare forsevere weather and helping communitiesbecome more resilient:• During hurricane season in the Atlantic,especially in advance of HurricaneLeslie, IBC issued media releasesthat explained how to stay safe, howto prevent property damage and ifdamage did occur, what insurancepolicies would cover.• IBC partnered with the Ecology ActionCentre, Halifax Regional Municipalityplanners and Halifax Water Commissionengineers to develop a one-ofa-kindstormwater managementdemonstration site in Halifax. Thegroup retrofitted an existing buildingusing the latest techniques to managestormwater runoff and reduceinfrastructure damage and flooding.Learn more at the consumer websitehttp://www.stormwatercentral.ca.At the stormwater demonstration site at 5988 Robie Street in Halifax, home and business owners canlearn more about tools including rain barrels, an infiltration trench and permeable pavers to help themadapt their property, protect it from water damage and keep water out of aging sewer infrastructure.7

EMPOWERING CONSUMERSSavvy insurance consumers can betterprotect themselves, their families and theirproperty.When Canadians know how their insuranceworks and have the right coverage, theyprotect their financial security and thatof Canada as a whole. And when theyknow how to prepare for emergencies andprevent damages and injury, they are moreresilient. That’s why consumer educationis a major priority for the P&C insuranceindustry.Our work to empower consumersincludes:• Answering more than 60,000 inquiriesa year at five consumer informationcentres across the country.• Welcoming one million visits a yearto ibc.ca and getintheknow.ibc.ca, andmaking 10 million Twitter impressions(@insurancebureau) as of December2012.• Promoting injury prevention, roadsafety, climate adaptation andemergency preparedness to consumersand like-minded stakeholdersin Atlantic Canada via the@besmartbesafe Twitter profile.• Partnering with police forces andother organizations to fight fraudand other insurance crimes.• Creating a free iPad app called DryHouse Challenge to show homeownershow to prevent water damage.• Advocating for consumers byencouraging federal and provincialgovernments to include insuranceeducation in their financial literacyinitiatives.IBC stafferTanya Whiltshiredemonstrates theDry House Challengeat the Union of NovaScotia Municipalities2012 Fall Conferencein Halifax.8

GIVING BACKThe P&C insurance industry is committedto building strong communities andworking with like-minded partners toensure our region is healthy and ourneighbours are safe.An example of this commitment isIBC’s partnership with the AtlanticCollaborative on Injury Prevention(ACIP) to support community-based injuryprevention programs throughout AtlanticCanada. IBC‘s funding for this partnership,now in its second year, is approximately$120,000.In 2011 and again in 2012, IBC gave agrant of $15,000 to an injury preventionorganization in each Atlantic province tosupport its programming.In Nova Scotia, IBC’s support is helpingChild Safety Link (based at the IWKHealth Centre in Halifax) to promote itsinjury prevention website and helmetsafety information to families across theprovince.Sarah Blades, Interim Executive Director of ACIP, helps a young friend adjust his hockey helmet.9

INVESTING WISELYHome, car and business insurers are safeinvestors – they have to be in order tocover their consumers’ claims.Most of the P&C insurance industry’sinvestments are in secure bonds,making the industry far less vulnerableto stock market fluctuations. This iswhy insurers fared better than otherfinancial services industries during therecent economic crisis.BREAKDOWN OF NATIONAL INSURANCEINDUSTRY INVESTMENTS (2011)MortgageLoans0.6%Bonds*82.8%Shares12.2%OtherInvestments2.0%Term Deposits2.4%Source: IBC, MSA Research (preliminary estimate)* Mostly federal, provincial and municipal bonds.THE INSURANCE DOLLAR-WHERE DOES YOUR MONEY GO?The Insurance Dollar chart shows how insurers spend each premium dollar averaged overthe seven years from 2006 to 2012. In total, more than 90 cents out of every dollar thatour industry collects is reinvested in Canada’s economy, communities and people.Back toCommunities(Taxes)Source: IBC, MSA ResearchOperating andRegulatoryCosts16.2% 20.6% 54.0% 9.2%INSURANCE DOLLARBack to Policyholders (Claims)Profit11

Insurance Bureau of Canada is the national industry association representing Canada’s privatehome, car and business insurers. Its member companies represent 90% of the property andcasualty (P&C) insurance market in Canada.QUESTIONS? WE’RE HERE.If you have questions, please contact:Insurance Bureau of Canada’sConsumer Information CentreToll-free: 1-800-565-7189 ext. 227 or 228(Atlantic provinces only)Hours: M–F 8:30 a.m. – 4:30 p.m.or visit ibc.caFor additional copies of this booklet,please contact:Amanda DeanVice-President, Atlantic902-429-2730 x225adean@ibc.caNS/05/2013