Six questions to test your insurance knowledge

1. Your daughter left the family home because the post-secondary educational institution she will be attending is too far away from your residence. However, after one semester she decides to keep on studying part-time.

• Generally, the insurance policy for your primary residence automatically covers your daughter's apartment and usually covers up to 10 % of the value of the property covered by your insurance. For example, if your policy covers your property up to $75,000, it will cover your daughter's property up to $7,500.
• Your insurance policy, however, will not cover your daughter's apartment if she is not a full-time student.

NB: Although apartment insurance is not mandatory, renter's insurance is strongly recommended.

2. A skunk invaded your home and left behind a whiff of its unique odour. 

• "Designated risk" insurance (or basic protection) only covers the types of damage specifically mentioned in the policy and consequently doesn't usually cover skunk damage.
• Only comprehensive "all risk" home insurance might compensate you for the damage to your property and for the required cleaning expenses since skunk damage is not specifically mentioned in the exclusions.
  • Comprehensive insurance offers peace of mind since it covers a wider range of losses (i.e. extending far beyond skunk damage).

3. You decided to rent a cottage and spend your weekends there for three months. You return to your primary residence during the week although you leave certain personal belongings in the rented cottage. While you returned to your primary residence, someone breaks into the cabin during the week.

• If the home insurance for your primary residence covers theft and breakage of your personal belongings, this coverage will also apply to property that you temporarily bring to the rented cottage but only if the loss occurs while you are residing in the cottage. Since the break-in occurred during the week, i.e. when you were at your primary residence, your home insurance will not reimburse you for property left at the cottage if you were not there at the time.
• If the event occurred during the weekend while you were temporarily residing at the cottage, even if you were temporarily away (e.g. eating dinner at a nearby restaurant), your insurance would cover the loss.

4. You borrow your brother's tent trailer for your holidays. You make sure to check with him as to whether it's adequately covered against damages**; he confirms this. So you merrily set off on your vacation only to damage his tent trailer during an at-fault accident.

(**This coverage is often known as two-way or comprehensive insurance)

• As your brother confirmed, his insurance will reimburse the cost of the damage because he took steps to take out coverage for his own damage (i.e. he had his own collision coverage).
• However, your brother's insurer might decide to ask you to reimburse the amount paid, i.e. the cost of the damage. In order for your insurer to cover the loss, you would have to add the FAQ 27 endorsement (specifying that residential trailers are covered). Otherwise, you would not be covered by your auto insurance and you would have to make restitution.

5. You are about to finalize the installation of your new swimming pool and your children can't wait to jump in. 

• It is essential to notify your insurer when installing a swimming pool or a spa. Your insurer might offer you an endorsement (rider) covering potential damage to your pool or spa.
• If your pool suddenly leaks and causes damage to your basement, your home insurance may compensate you for your basement since the pool leaked suddenly and accidentally (i.e. a facility or recipient containing water).

However, if you did not notify your insurer and consequently did not have a specific endorsement for swimming pools, the cost of repairing or replacing your pool would not be covered.

• Home insurance policies usually offer coverage for bicycles but apply certain limits in the event of theft. Therefore, your insurer may limit your compensation to $1,000 or more per bicycle in case of theft.
• If the value of your bicycle exceeds the amount offered by your home insurer, you must advise your insurer; your insurer might then offer you an endorsement in order to insure your bike's actual value.
• Keep in mind, however, that your insurance will not cover you if your bike is damaged during regular use, e.g. if the frame breaks due to impact or if the damage is caused by the road's poor state of repair.

However, if you're transporting your bike, e.g. on top of your vehicle, your home insurance will compensate you if the bike is damaged (e.g. automobile collision causing damage to the bike while being transported).