What is insurance

Insurance is a contract entered into by a person or entity with an insurance company. The contract is represented by a policy. The contact (policy) is an agreement that states that the individual or company will receive financial protection from the insurance company.

Example: You pay vehicle insurance to an insurance company (insurer) and your car is damaged. You have insurance so you will not have to cover the whole cost yourself, your insurance protects you financially. This type of insurance is called auto insurance. As a Saskatchewan resident you pay for basic insurance through the SGI Auto fund.

Why you need insurance

People and businesses need insurance because they own things they do not want to, or cannot afford to, fix or replace themselves if they are damaged. Purchasing insurance is transferring the cost of a potential loss from you to an insurance company. The cost of transferring this risk is called an insurance premium.

Example: The company you own is sued when someone falls down the stairs at your office. If you lose the legal case, you could owe the person that sued your company money, instead of having to pay this out of pocket, your insurance will cover it. This type of insurance is called liability insurance.

Example: a tree falls on your house, causing hundreds of thousands of dollars in damages. Your insurance would cover the cost of to repair your house as opposed to you having to pay for it yourself. This type of insurance is called property insurance

Where to buy insurance

Insurance of any kind should be purchased through an insurance broker. An insurance broker is a licensed professional, educated on different products and the rules involved into entering an insurance contract. A broker will guide you through the insurance purchasing process, provide you options with different companies, price points and coverage options.

Purchasing Insurance Online

Both individuals and business are cautioned when purchasing insurance online. What is often missing from online insurance sales is a broker. Insurance contracts are legally binding investments in your financial wellbeing and which product to purchase is not a quick and easy decision to make. Rules and circumstances involved in an insurance policy can be hundreds of pages long. To ensure you have the best coverage for you, your family, your business and your possessions, a qualified insurance broker is your best option.

Common Terms

Insurance Policy

An insurance policy is a type of contract between the insurance company (insurer) and the customer (person or entity). Insurance policy contents are highly regulated in Canada and must contain certain elements to be legally binding.

Insurance Premium

A premium is the price you pay to have insurance coverage. The price of a premium is based on the type of item you are insuring and the risk of something happening to it. The higher the cost to fix/replace something and the higher the risk of something happening to it, the higher the premium.

Deductible

If something happens and an insurance claim in made, there is often a sum of money that needs to be paid to the insurer, called a deductible. This is the portion of the loss that you pay for before the insurer pays the rest. 

Risk

The changes of something happen that leads to a financial loss is called a risk.

Peril

The thing or occurrence that causes a loss is called a peril. Examples of peril include fire, water, collisions, falling objects etc.

Notice of loss

When the person or entity that purchased insurance notifies the insurance company in writing that a loss has occurred.

Personal Lines

The types of insurance that cover a person and their possessions such as home and auto insurance.

Commercial Lines

The types of insurance that cover businesses and their operations such as restaurants and farms.

Auto Fund

The SGI Auto Fund is Saskatchewan’s compulsory auto insurance program, it operates the driver’s licensing and vehicle registration system in our province.

Insurance Broker

Insurance brokers work for their clients, not any particular insurance provider. Brokers can offer clients products from a variety of companies, allowing them to address client’s specific needs. Brokers are educated, licensed and regulated in Saskatchewan, ensuring the upmost ethical standards and service levels are being met. Through the buying and claims process, a broker will assist and advise their clients on their legal obligations under the insurance contract (policy).

FAQ

What should I do if I need to make an insurance claim?

1. Contact your broker immediately
2. Follow your brokers instructions carefully
3. If speaking to a broker immediately is not an option, contact the insurance company directly

How do I find a broker?

There are brokers in 250 different communities in Saskatchewan, you can find one near to you here: https://www.ibas.ca/cgi/page.cgi/find-a-broker.html

I don’t own much; do I still need insurance?

Yes. It may not appear you have anything worth insuring but consider the cost of losing even all the clothes you own in a fire – it would take considerable amounts of money to replace those items. Everyone who drives a vehicle requires insurance by law in Saskatchewan. While your plates do come with basic insurance, additional insurance is almost always required to adequately protect you and your family from risks such as law suites (liability).