Reasonable Doubt: How sure is your insurance?

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      There were telltale signs from my childhood that I would grow up to be a lawyer.

      One time, my mom didn’t have time to run to the bank and I was flush with cash after receiving lucky red envelopes for the Chinese New Year. I lent money to my mom but, out of amusement, drafted a document for her to sign. I didn’t know it at the time, but it was a promissory note—a legal version of an IOU.

      Here’s another hint from my childhood: I was playing laser tag with friends at Planet Laser in Richmond. My friends signed the waiver without skipping a beat. They were far more concerned with what nickname to go by on the scoreboard.

      Meanwhile, I took my time with the waiver. I read it line by line and thought about what my signature on that document actually meant (I wasn’t a cool kid).

      Sure, my friends signed a legal document pretty quickly—but you can’t chalk that up to them being kids. Adults aren’t much different: they can’t be bothered with legal jargon either. When it comes to thick legalese, people sign their names and don’t think twice.

      I’m reminded of this regularly as a lawyer. People come to me asking for advice about damage to their home or interference with their business. I ask about their insurance policy and the most common answer is, “I don’t know—I just bought whatever the broker told me to get.”

      You can imagine the shock if someone believes they are insured for a loss but later gets refused coverage by the insurance company. From a legal standpoint, there is always the question of whether a particular loss is covered by a person’s insurance policy (and whether the insurance company itself is right to refuse coverage).

      However, people’s frustrations are often directed at the broker or agent who sold the insurance policy. This is because we rely on insurance brokers for advice when buying something as complicated as insurance.

      Can an insurance broker be blamed for bad advice? What is their actual legal responsibility and obligation? I reached out to the regulatory body for insurance brokers. That’s the Insurance Council of British Columbia (not to be confused with the Insurance Corporation of British Columbia [ICBC], which is an entirely different organization).

      The insurance council acknowledges that the insurance broker is the professional upon whom consumers rely for their expertise. “At the end of the day, the broker is the expert. Not only do they research options but they also provide advice for which product might be more suitable,” says Brett Thibault, director of governance and stakeholder engagement for the council.

      Flood insurance comes in handy for hurricane zones.
      Wikimedia Commons/Infrogmation

      So, yes, an insurance broker might be legally responsible for their advice. That said, the decision on buying any insurance policy is yours and not the broker’s. As the customer, you should know what you’re getting. If you don’t know the ins and outs of your insurance policy, you can run into some nasty surprises down the road.

      Thibault offers some practical advice: “Customers should take the time to make sure of what they’re buying. With that, ask questions. If you’re not certain or don’t understand because there’s a lot of jargon, ask questions about what’s covered and what’s not covered”.

      Thibault goes on: “What you want is the best product for a fair price. If there are differences, find out the differences. Don’t just focus on the price.”

      Buying insurance is about securing peace of mind. If you rush through the process, you could be setting yourself up for a disaster. To avoid that, be a well-informed consumer.

      After all, if you’re going through the trouble and expense of buying insurance, you should do it with a bit of care.

      A word of caution: You should not act or rely on the information provided in this column. It is not legal advice. To ensure your interests are protected, retain or consult a lawyer. The writer thanks Brett Thibault for his time and insight. Information about the Insurance Council of British Columbia can be found at their website.

      Kevin Yee is a trial lawyer a Hammerco Lawyers. He acts for people who have been injured or wronged. If you have topics that you’d like Reasonable Doubt to cover or if you have a general question for a lawyer, you’re welcome to send him an e-mail