Insurance companies, regardless of what they insure, are always trying to portray themselves as giving loyal customers and new customers the best deal possible for their dollars invested. If you believe the pitch they make, let me assure you I have a carburetor that the oil companies bought to keep it off the market because it gives every gas engine a fuel consumption rating of 1L/100 km.

In the real world, insurance companies are out to do one thing: make money. Companies are responsible to their stakeholders (or in the case of crown corporations, your government) and have to give a decent return on the dollars invested.


That means when your broker says you are covered for something, the real answer is maybe you are and maybe you aren’t. The only way to know for sure is to actually have an accident and find out. The other way is to go to a lawyer and ask for an interpretation of the fine print. In most cases, what you think the contract says and what it says legally are two different things.

A good example is what is called non-owned vehicle coverage. Most of the polices will use terms such as “like and kind” which your broker may tell you that you can be covered for anything with wheels on it that you are licensed to drive. That is true to a point; you may legally be able to drive a 3-ton truck, but it is not like your car, nor is it the kind of vehicle you normally drive. Depending on your company, you may be denied coverage if you are in an accident with the truck. The same goes for motorcycles. You may be licensed, but they are not like your car or the same kind of vehicle as your car. In short, no coverage.

When you buy insurance on your car, you are rated on what type of car you have, what group you fall into and then how well you do within that group. A good example is a driver under the age of 25 driving a new sports performance car. It doesn’t matter what type of good driving discount the 25-year-old gets, his premium will be higher than a 45-year-old woman in her Lexus with the same driving record.

That’s not fair, you say? Insurance companies will then trot out actuarial studies (actuaries are the pinnacle of mathematical manipulators and reduce every bit of data to a statistical probability) that show the loss ratio for every type of vehicle on the road and for each age group of drivers.

Since the theory of insurance is to spread the cost over a large group so that what you pay is minimized, this theory sounds pretty good, but breaks down when bad driving habits are encouraged or someone scams the insurance company.

If you want to do something about your insurance, start by reading the fine print to make sure you have the coverage that you think you are paying for. When you find a broker or agent that you can work with, stick with them. Shop around every few years to see if you really are getting a deal and don’t be afraid to bundle your business. Putting everything together can really save some cash. Pay promptly, even before the due date if possible so there is no lapse in coverage.