I’m going on vacation, what does my insurance cover?

The information below is relating to insurance policies within Ontario Canada only.

The information below is a general outline; each individual insurance company may have their own limits and rules. Contact your insurance broker if you have any questions.

To answer this we need to divide that question into two parts:

1. What does my home or tenants insurance cover?
2. What does my car insurance cover?

Home Insurance

Personal Liability

The most important coverage you need to worry about is your liability coverage. Most people know that they are covered for up to $1,000,000 liability (or whatever your limit is) if somebody were to injure themselves on your property and they sue you. What people don’t know is that it is called Personal Liability and not home owner’s liability because it also covers you against lawsuits anywhere in the world if you cause injury to a person or damage to a person’s property.

Example

I was given a case study a few years ago about a lady from Ontario who was in Europe. She was drinking on a restaurant patio and spilled her drink on the ground. Before somebody had a chance to clean the spill another lady slipped and hit a table on her way down. She suffered a broken neck.

The injured lady’s lawyer then filed a lawsuit and named the restaurant and the lady from Ontario who caused the spill as the two who were liable. The lawsuit was for $10,000,000.

In the end, the restaurant took the big hit for the lawsuit and the lady from Ontario had to pay somewhere around $500,000 (I don’t remember the exact number as I read this case study years ago). I do remember that her personal liability coverage covered the entire amount.

Contents

When you travel, you no doubt take clothes, cell phones, money, cameras, computers, iPads, etc… Your personal property when away from your home on vacation is still covered on your home insurance policy. With most companies this also includes property lost at the airport.

One exception to the rule is if you are traveling with a resident employee (live in nanny). You must inform your insurance company that you have the resident employee so that is noted on the policy. If you do this, they are covered as well.

Note

You should inform your insurance company of a resident employee even if you are not travelling. This could turn into a huge mess if the employee gets injured on the job.

Travelling for business is whole other story. Your personal property may still be covered but this is something you should discuss with your broker, especially when it comes to computers, cell phones, etc…

Dwelling (your home)

While you are away, your house is still fully covered. If you are away for more than one week, have somebody check on your house at least once a week. Some companies have this in their policy wordings but it’s rarely an issue when people go on vacation for a week or two.

Car Insurance

Your cars at home are still covered for theft while you are on vacation, but what happens if you rent a car?

Note

The information below is only relevant to renting a car within Canada or the United States.

Rental companies will charge you $15-$30/day for insurance on the rental car. You have the option to add this coverage to your car insurance policy and tell the rental company that you do not require their insurance.

The coverage is called OPCF27 – Damage to non owned vehicles. Although the coverage amount changes between companies, it is roughly $50,000 coverage for the rental car. This means if that rental car is in an accident or stolen while in your possession, you are fully covered up to $50,000 (or whatever your companies limit is).

The cost to have this added to your policy is around $40/year which works out to less than $4/month and can be used any time you rent a car without having to recall your insurance company every time.

Note

When you add this to your policy, you add it to a specific car. That car cannot be driven while you are driving the rental car.

Example

You have two cars and are on vacation. Your teenager is at home and still drives one of your cars. If OPCF 27 is added to car #1, you must tell your child they are only allowed to drive car #2 while you are away.

If you have any questions regarding your home or auto insurance while travelling, feel free to contact me any time.

Mike Leinwand
mike@icdinsurance.ca
www.mikeleinwand.com