Working with a Home Insurance Agent or Broker

Woman meeting with an insurance agent or broker

 

What's on this page?

 

What is a general insurance agent or broker?

 

Home insurance comes under the financial sector known as Property and Casualty (P&C) Insurance. In Ontario, general insurance agents, also known simply as insurance agents, are people who are licensed and regulated by the Financial Services Commission of Ontario (FSCO) to sell a variety of insurance products including home and auto insurance, and they are employed by one insurance company. To see if an insurance agent you want to work with is licensed, visit FSCO’s Agents Licensed in Ontario database. Alternatively, ask an insurance company for the name of an agent authorized to sell their products.

 

An insurance agent is different from an insurance broker. An insurance broker may sell insurance on behalf of more than one insurance company and works to find you the coverage that best suits your needs from any of the companies they represent. Insurance brokers are licensed by the Registered Insurance Brokers of Ontario (RIBO). To learn more about insurance brokers, visit the RIBO website [New Window].

 

What is a P&C insurance company?

 

A property and casualty insurance company, also known as a general insurance company, issues and sells home and auto insurance to individuals through its agents or brokers, and promises to pay benefits to holders of those policies. In Ontario, insurance companies are licensed and regulated by FSCO. For a list of licensed companies visit FSCO’s Licensed Insurance Companies in Ontario database.

 

FSCO’s role

 

FSCO licenses and regulates insurance agents and companies in Ontario to ensure consumers are protected and to enhance their confidence in the insurance sector. If an insurance agent is licensed and regulated by FSCO it means that they had to meet certain requirements that are in place to protect you.

 

As well as checking that the general insurance agent or company you want to work with is licensed by FSCO, you should also check FSCO’s Enforcement Online database to see if any enforcement action has been taken against them in Ontario. Enforcement actions like having their licence suspended, or being fined (Administrative Monetary Penalty) means that there have been some issues in regards to compliance with the law that resulted in these sanctions. You might also want to check out the Canadian Insurance Regulators Disciplinary Actions [New Window] database that offers public access to regulatory decisions issued by insurance regulators across Canada. 

 

Insurance agent and company responsibilities

 

General insurance agents, brokers and companies have obligations and responsibilities to you, the insurance buyer. Visit the RIBO website[New Window] to understand a broker’s responsibilities.

 

Insurance agents and companies are required to:

 

  • be licensed by the Financial Services Commission of Ontario to sell property insurance in Ontario;
  • comply with the Ontario Insurance Act [New Window];
  • make treating you and other consumers fairly a core component of their governance and business culture;
  • have policies and processes in place to handle your complaints in a timely and fair manner;
  • protect your private information and immediately inform you of any breach;
  • if an agent, have successfully passed the qualifying examination conducted by the Insurance Institute of Ontario (agents are exempt if they have a Chartered Insurance Professional designation); and
  • if an agent, must disclose to you in writing any conflicts of interest that they may have.

In addition to licensing requirements, insurance agents and companies should follow industry best practices. They should:

 

  • act with due skill, care and diligence when dealing with you and when recommending home insurance policies to you;
  • promote home insurance policies and other related products in a manner that is clear, fair and not misleading or false;
  • recommend suitable home insurance policies by assessing your property, content and liability, taking into account your disclosed personal circumstances and financial situation;
  • provide continuing service to you until all obligations have been met;
  • ensure that a licensed insurance agent is always available for consultation during business hours;
  • provide their contact information, licence number, and other information that you request; and
  • draw your attention to all relevant information before you buy a home insurance policy.

Your rights and responsibilities

 

When you purchase a home insurance policy, you enter a contract which gives you the following rights and responsibilities:

You have the right to:

  • understand your policy, and to receive explanations in plain language from your insurance agent or broker.
  • receive clear information about the claims process.
  • file and resolve any complaints.
  • protection of your privacy.

You are responsible for:

  • paying all premiums as outlined in the policy.
  • disclosing information about the value of your home and contents. If you undervalue your home or contents when buying the policy, you might not have enough coverage. If you overstate the value when making a claim, your policy may be cancelled or voided.
  • disclosing information about renovations or home-based business activities, no matter how small.
  • disclosing full and complete information on your home insurance application, including previous home insurance claims.
  • reviewing the application thoroughly before signing and submitting.

Questions to ask an insurance agent or broker about home insurance

 

When purchasing a home insurance policy, use these questions as a guide when speaking with a home insurance agent, broker or company.

 

  1. What does this home insurance policy cover and to what extent?
  2. What does this home insurance policy exclude? Can you give me an example of when an exclusion would happen?
  3. I have the following valuables: [list off items you consider valuable]. Does this home insurance policy cover these valuables? If not, how much would it be to get an endorsement for the valuables? Do I need to get appraisals done for these valuables when they’re insured?
  4. I have a locker/storage unit/shed/garage. Is it covered under this policy?
  5. What liability does this home insurance policy cover?
  6. How much are the deductibles in this home insurance policy?
  7. Does this home insurance policy cover replacement cost or actual cash value?
  8. Do I qualify for any premium discounts?
  9. Are there any discounts you offer for making my home more disaster resistant?
  10. If I combine my home and auto insurance, is there a discount?
  11. Are the premiums paid monthly or annually?
  12. When does the policy coverage begin? For how long?
  13. If I need to make a claim, how do I do this?
  14. I’ve heard floods are on the rise. Does this home insurance policy cover floods, also known as overland water?
  15. Am I covered for sewer backup? If so, to what amount?
  16. Do you have any tools or resources such as a home inventory document that can assist me in making better decisions and protecting my home?
  17. Do I live in an area that is more prone to risks? Is there anything I can do to protect my home against these risks?

What to do if you have a complaint

 

If you have a question or complaint about a service or product that you purchased, you should speak with your insurance agent, broker or the insurance company first and see if they can resolve the issue.
If you want to file a complaint about an insurance company or agent, you can follow the three steps on FSCO’s website: How to Resolve a Complaint about Insurance. Keep in mind the following when asking FSCO for assistance:

 

  1. FSCO reviews complaints for non-compliance with the Insurance Act and its regulations. FSCO cannot adjudicate claims, review contractual disputes or impose a settlement. We also cannot assist in obtaining compensation.
  2. FSCO does not deal with concerns regarding claims, interpretation of policy coverage and policy processing and handling. For these concerns, please contact the General Insurance OmbudService (GIO). GIO is an independent organization who assists consumers in resolving concerns or disputes with their home, auto or business insurers. They may be reached at 1-877-225-0446 or through their website at www.giocanada.org [New Window].
  3. FSCO cannot review consumer concerns regarding insurance premiums. Like many insurance products, property insurance is sold in a highly competitive environment. Each insurance company has its own unique set of underwriting guidelines which outline the risks it will insure and will not insure. As a result, the premiums companies charge and the coverages provided will vary from company to company. If there has been a change in risk, or if a risk has had a number of claims within a certain period of time, an insurer may use discretion when deciding whether to renew or cancel a policy, and what the premium would be. 

If you have a complaint against an insurance broker, visit RIBO’s website [New Window] to learn more about their complaint process, or contact a complaint officer at 416-365-1900.

 

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