Understanding Payment Plans

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Insurance companies offer a variety of ways of paying for insurance premiums, from payments coming directly out of your account or credit card every month to paying your premium in four installments.

Each company has its own payment formats and procedures.

It’s important to remember when you secure insurance; you are entering into a legally binding contract. Insurance is not a commodity like merchandise.  Unless you have purchased an extended warranty on a product, or it has a 30 or 60-day warranty, the transaction usually ends at the point of sale.

Insurance, on the other hand, is an investment into a product, a service,  and a means of recovery when there is an insurable loss.  But there is a contract involved, between you and the insurance company. Payment and keeping payments in good standing is a condition of your contract.

Failure to pay means that you have reneged your end of the contract.  You are telling the insurance company you no longer require the insurance.

We find that many lack understanding why it is a very serious issue if you are delayed in paying or miss a payment.

It is not because insurance companies are unsympathetic or cold.  They have a responsibility towards the public, shareholders and their regulatory body to have proper accounting and money management procedures in place.

It’s crucial to realize that it is very costly when people default on paying their premiums.

To look at it in a straightforward way, insurance is a pool of money that comes from insurance premiums and investments into a pot to be there for people in the event there is a claim.

Ask yourself:  What happens to the pool of money if people are defaulting on their insurance?

Therefore it is vital to understand the terms of  agreement with payment plans.

What happens if I miss a payment?  Is there a fee? Does my bank charge a fee? Our insurers charge an NSF Fee if the payment comes back because there is an insufficient amount of money in the bank.  This may not be the case if an account is frozen.  And banks charge a fee.  Fees vary from company to company, but it can cost you close to over $100 if not more for a one time NSF event when you add up the fee a bank and the insurance company charges.

How much time does my insurance company require to change of bank information or if I need to change my draw date?  This all depends on the insurance company.  Calling in or visiting the office the same day as your payment comes out will not work.  Some companies need a week or two; some require a few days.

If I missed a payment, should I come in right away with the payment?  Contact your broker first; some companies will do a double the next month with an NSF fee; some have procedures in place where they will try to pull out the payment again.  Always contact your broker first.  

Consider the repercussions of cancellations for non-pay and missed payments on your insurance profile:

  • Insurance companies track how many times in your renewal term you have defaulted on your payment.  If you have exceeded the times allowable, it can result in the removal from the automatic payment plan option,  and you may have to pay the remaining premium in full to reinstate.
  • People who have a history of cancellations for non-payment will pay more for their insurance.
  • You may end up in a non-standard auto insurance market resulting in even more costly insurance premiums.
  • If you default and are cancelled by an insurance company and attempt go to another brokerage for insurance, the broker will ask for proof that you have paid any outstanding balances.
  • Any cancellations for non-payment of an insurance policy that you do not resolve will be noted in your insurance history.
  • Insurance companies can be stringent concerning defaulting on payments with property policies.  One NSF can result in a Registered Letter of Cancellation, and your broker may have to contact the company to see if they agree to reinstate your policy.

Contact our office if you have more questions about the terms of agreement of your payment plan.





Travel Insurance Tips!

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This winter in Ontario has to be the most precarious one yet with all the mix of rain, ice and snow!  No wonder people head off for warmer temperatures for a reprieve.  Or maybe you like the snow and head off elsewhere outside of Ontario to hit the ski slopes!  If you are travelling out of province, seriously consider purchasing travel insurance, even within Canada as your provincial insurance may not cover all the costs entirely.

With Travel Insurance you can purchase coverage for :


Trip Cancellation, delays, and interruption

Lost or delayed luggage

Extreme Sports/high-risk activities (that are otherwise excluded)

Here are seven tips on travel insurance from Secureglobe.

If you are looking for a quote on travel insurance, be sure to call them or visit them at their website!

Not convinced you need travel insurance?  Check out this article about the medical costs that can incur from a medical emergency.

Do you have winter tires? Don’t forget to call!

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Winter Tire Discount

Have you installed winter tires on your vehicle?  Be sure you contact us to see if you qualify for  Winter Tire Discount on your automobile insurance.

The discount is only for Winter Tires.  All Weather Tires, Snow and Mud tires do not qualify, regardless if they have the Winter Tire Symbol.

Also, the discount does not qualify if the winter tires are on all year. (not advisable)

They must be installed and then removed for the appropriate season, and all four wheels must be equipped with Winter Tires.

Give our office a call to see if you qualify for the Winter Tire Discount.




Twas the Day Before Christmas!

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Most people are familiar with the poem “Twas the Night Before Christmas” which was first published in the Troy Sentinel newspaper in upstate New York on December 23rd, 1823.  There have been many amusing renditions of this poem.  As such, we felt one should be written for all insurance brokers out there!  Merry Christmas!

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