Common insurance questions

Answers to common home insurance questions you may have are provided below. Also provided below is information on Square One and its home insurance underwriter. Should you have any other questions about your home insurance policy, Square One, or Square One’s home insurance underwriter, please feel free to call 1.855.331.6933 or email us.


How can I reduce my monthly home insurance bill?

Take a look at what you are insuring. Some people have insurance for more possessions than they actually own. By doing a proper home inventory, you can get a better idea of how much protection you should purchase. If you have been insuring an old sailboat that you know you wouldn’t ever replace if it were stolen, take a look at the premium for that item. On the other hand, make sure you have enough protection for the things that really matter to you. The other way to try to reduce your insurance premiums is to increase your deductible. This essentially means that you are taking on more of the risk. Ask your licensed insurance agent to tell you what the difference would be and decide how easy it would be for you to pay a higher amount in the event of a loss.

How do I know how much to insure my house for?

Insurance companies that offer replacement cost insurance on your house generally determine the amount your house needs to be insured for. They calculate the average cost in your area to rebuild a house to the same standard.

I have a lot of jewellery, do I need to get special insurance?

The amount of extra insurance you purchase for your jewellery depends on whether you would want to replace it if it were lost, stolen or damaged. Jewellery is definitely something that thieves target in break-ins.

Do I get a discount if I’ve had home insurance for more than ten years and I’ve never had a claim?

Every insurance company calculates their insurance rates a bit differently. Some like to offer customers all kinds of different discounts, including claims-free, age, number of years living at the same address, etc. At Square One, we take these factors into consideration when we are determining your monthly premium – it doesn’t show up as one price with a bunch of discounts. Our system calculates it all behind the scenes. Because each company offers different insurance protection and different ways of calculating their prices, it’s important to make sure you are comparing apples to apples. For example, all Square One home insurance policies include earthquake insurance, while most other companies do not.

I’m planning on renovating my home. Will I need to change my insurance?

Each insurance company has different rules about renovations, so the best policy is to contact your insurance agent. If you’ve made extensive renovations increasing the value of your home, and you haven’t notified your insurance provider, your coverage may be limited in the event of a claim. If you have a condo, any renovations are usually considered “building improvements”, and require extra coverage on your condo owners policy to be properly insured.

I don’t have a lot of things to protect so why should I buy renter’s insurance?

When you start adding up what it would cost to replace your clothes, shoes, accessories, as well as the basics in your kitchen and bathroom, you’ll be surprised. Use our simple home inventory worksheet to get a rough idea of what your possessions are worth. And, one of the big things that renter’s insurance offers is protection for liability. If you decide to have a party and someone slips and falls on your throw rug, you may be held liable. We all like to think that our friends would never sue us, but is this a risk you want to take?

Do all home insurance policies exclude “Acts of God”?

It’s a common misconception that your home insurance policy doesn’t protect you against “Acts of God”. However, you do need to be aware that most Canadian home insurance policies do not protect you against coastal flood. If your home is damaged in a coastal flood, there may be other resources to help you. For example, British Columbians can apply to the provincial Disaster Financial Assistance Program for assistance in the event of loss or damage due to a coastal flood.

What’s the difference between an insurance agency and an insurance company?

An insurance agency (or brokerage) markets and sells insurance to customers on behalf of insurance companies (or underwriters) that actually offer and write insurance policies. In exchange for premiums paid, the insurance company agrees to pay resulting claims insured under the policy. For facilitating the sale of policies, the insurance agency receives a commission or fee from the insurance company. Square One Insurance Services Inc. is an insurance agency and its home insurance policy is underwritten by Mutual Insurance Company of British Columbia.

Are insurance agencies regulated?

Yes, insurance agencies (or brokerages) and the sale of insurance are highly regulated in Canada at the provincial or territorial level. For example, the Insurance Council of British Columbia (the Council) is responsible for protecting the public on matters related to the sale of insurance products and services. The Council does this through authority granted to it in the British Columbia Insurance Act. And, it is responsible for ensuring minimum education and experience standards are met by those licensed to sell insurance. Where necessary, the Council is also responsible for disciplining licensees that breach the Insurance Act or rules. Square One Insurance Services Inc. is corporately licensed as an insurance agency and each of its insurance sales agents is individually licensed.

Are insurance companies regulated?

The short answer is yes, insurance companies (or underwriters) are highly regulated. The type of regulator that supervises a specific insurance company (underwriter) depends on whether that company is registered and operates on a provincial or federal basis. It’s probably no surprise that provincial insurance companies are supervised by provincial regulators and federal insurance companies are overseen by a federal regulator. In BC, the Financial Institutions Commission (FICOM), the regulatory agency of the Provincial Ministry of Finance is responsible for ensuring companies are property authorized. It supervises the solvency of companies, addresses market conduct issues; and maintains a registration system for companies operating in the province. Federally, the Office of the Superintendent of Financial Institutions (OSFI) supervises insurance companies. It has many of the same responsibilities as provincial regulators. In addition, OSFI also keeps track of broader issues that might have a negative impact on the insurance industry. Square One’s home insurance is underwritten by Mutual Insurance Company of British Columbia, which is a provincially registered insurance company serving BC, Alberta, Saskatchewan, Manitoba and Ontario.

Are insurance companies rated by independent third parties?

Yes, there are several independent rating agencies in the industry. A.M. Best is one such agency and it issues the Best’s Financial Strength Rating for insurance companies. This rating is an independent opinion of an insurer’s financial strength and ability to meet its ongoing insurance policy and contract obligations. It is based on a comprehensive quantitative and qualitative evaluation of a company’s balance sheet strength, operating performance and business profile.

Insurance companies are rated on a 16 level scale, with A++ being the best rating and F being the worst. Companies with ratings of A++, A+, A, A-, B++ and B+ are deemed to be secure. Anything lower than B+ is considered to be vulnerable by A.M. Best.

Mutual Insurance Company of British Columbia, which is Square One’s home insurance underwriter, has a Best’s Financial Strength Rating of A-.

How am I protected if there is a problem with my insurance company?

Although the failure of an insurance company is a rare occurrence, there is a system in place to protect customers. The Property and Casualty Insurance Compensation Corporation (PACICC) is a special program funded by Canadian property and casualty insurance companies to protect policyholders and claimants. If an insurance company fails, PACICC will automatically respond to your claim as long as your insurance company is a participating member. Basically, PACICC is much like the Canadian Deposit Insurance Corporation, which protects your savings in case a bank fails. Square One’s home insurance is underwritten by Mutual Fire Insurance Company of British Columbia, a participating member of PACICC.

Is it common for insurance companies to fail?

In Canada, it is uncommon for insurance companies to fail. In fact, only one Canadian insurance company has failed in the past 10 years. In comparison, dozens of American insurance companies have failed over the same period of time. You can validate this information on the following website:

In the Canadian market, if an insurance company fails, there is a national guarantee fund that steps in to fulfill the claims obligations of the failed insurance company. This national guarantee fund is called Property and Casualty Insurance Compensation Corporation. There is no national property and casualty insurance guarantee fund in the US; instead, there are state guarantee funds. Each state has its own guidelines as to the assistance they will provide. So, it’s important to ensure the company you are dealing with in the US is financially secure.