In this installment of Ask Adam:
- Home day cares and insurance
- Working from home and insurance
- Choosing an insurer for a home-based business
- High-rise water coverage
- Insurance from moving companies
- Home insurance and moving company damage
- Rental car accidents and your personal policy
I run a daycare from my home, do I have coverage under my home insurance?
Sandra from Toronto
No, if you’re running a daycare out of your home, you don’t automatically have coverage. One of the basic questions that we ask in our application is if there are there any business operations in the household. You could get a quick endorsement for a few kids in a small business; otherwise, you’d need a stand-alone commercial policy.
If my employer makes me work from home, is that considered home-based business?
Kurt S. – North York
No, working from home isn’t considered a home-based business. There are two pieces of potential liability that can come in to play that a home insurance company would be concerned about: One is if you’re an independent contractor that doesn’t have any coverage for your liability as a professional: if somebody sues you, it’ll come into your personal name, and then your house policy will have to respond, and they’re going to have trouble with that. The second piece is clients visiting your house: if you’re cutting hair or doing massotherapy, for example, a client could slip and fall, and then there would be physical damage or bodily injury on top of the professional liability.
If I have a home-based business, do I have to get business insurance from the same company as my home insurance?
M Shaheen – Cornwall, Ont.
No, you don’t have to get your business insurance from the same company. You could pick a different company for example, if there’s some discounted rates or packages available. That being said. it can be really smart to align your two coverages, because then at claims time you don’t have two different insurance companies fighting over whose claim it actually is—both trying to pass the buck to one another. If you have your home and commercial with the same insurer, then it’s going to be really easy to hand the claim to them and say
I don’t care which department pays this, you guys pay the claim.
Do I need any type of water coverage if I live in a high-rise?
Annie in Toronto
Yes, there’s a few applicable coverages for water damage in a high-rise:
- There’s the basic burst pipe and overflowing bathtub that comes with most policies–and every comprehensive home insurance policy
- There’s sewer backup, which is an interesting one, because if you’re on a very top floor with nobody above you, then technically you have a very low risk of sewer backup
- Overland water would protect you from water damage coming in off your deck or balcony, but, if you have no balcony and no one above you, you can certainly choose to take that risk on your own
I think personally, I would still take sewer back up because of the risk for anybody who’s not on the top floor your risk of sewer backup is the drain clogging below your unit and all the units above you flushing into your unit.
If you’re moving, do you have to purchase insurance from the moving company to cover your contents or your furniture?
No, all of your contents are covered while either temporarily in storage, or while you’re traveling throughout the world. For example, if you’re on a trip and you bring your laptop or your camera, and they fall overboard, that would be covered the same way as if they were stolen from your home.
If I hiring a moving company and they drop a desk or something like that, would it be covered by my home insurance?
Valerie L. – Brooklin, Ontario
Yes, it is covered by your home policy, but you might consider, if the rate was affordable, taking out the insurance from the movers so that you could keep your home policy claims free. It’s a similar idea as renting a car; you might consider buying the rental car insurance just so you can keep your own policy clean. If you do hire movers or contractors do make sure they are insured and ask for a certificate of insurance to make sure they won’t disappear in the night if they do serious damage.
If you rent a car and you buy the car rental insurance, and then you have an accident, does that count as an accident when you go towards your personal policy—either on your driving record or your insurance history?
Kiko from Scarborough
That’s a really good question. I don’t think it’s going to automatically affect your insurance, because it’s considered a damage waiver you are buying, not insurance. The private party (the rental car company) agrees for a fee to waive damage you may cause. They won’t report back to your auto plus (your insurance permanent record of accidents), because it’s not an insurance company that you’re buying the waiver off of. Now if you charged in that accident, or there was another party involved, that very well could end up on your record and change your rates if your insurance company looked it up. Also, if you were applying for insurance again, you would need to declare the event on the application, as it reads
Give details of all accidents or claims arising from the ownership, use or operation of any automobile by the applicant or any listed driver during the last 6 years.
Note: The information above is for general purposes and does not constitute legal advice. Be sure to talk to your broker if you have more specific questions about insurance, and especially if you need answers that are specific to your circumstances.