How much is enough?

In November 2008, a robbery in the affluent and exclusive Forest Hill district of Toronto is making national news. The thieves manage to deactivate the homes high-end security system and make off with a 140-kilogram safe full of more than $2million worth of jewelry and $50,000 in cash. Included in that safe were two Stanley Cup rings, among other very valuable pieces of jewelry.

The home belongs to Paul and Judy Bronfman and their three children. Paul is a prominent film producer whose family fortune comes from The Seagram Company Ltd., and his father, Edward, co-owned the Montreal Canadiens from 1971-1978; a time when the Canadiens won four Stanley Cups.

At the centre of this sensational news is homeowners insurance.

As with all standard home insurance, the Bronfmans’ policy had limits; $10,000 for jewelry and $1500 in cash. Certainly, there is no argument that this was not enough coverage. The Bronfman’s maintain that their insurance broker failed to ensure the policy reflected their ‘standard of living’.  The insurance broker argues the couple was well aware of their coverage limits. The question of fact remains in the courts hands; how far must an insurance broker go to ensure policies contain adequate coverage?

As a general rule, insure your belongings for the full replacement value. For your home, your policy should cover you to entirely rebuild and furnish your home. You may have to pay a little extra, but it is worth the peace of mind.

TIPS

1.      Talk or better yet meet with your insurance broker. Have them review your     contents to make sure you are covered.  If you have valuables, family heirlooms, art, jewelry…ask your broker what should be appraised.

2.      Then ask for quotes to get the additional coverage. You don’t need to take the coverage, but if you don’t make a conscious decision to self-insure certain items.

3.      Sleep well knowing you have made a decision that you can live with.

So, what have we learned from the case of the stolen Stanley Cup rings? The courts haven’t decided and the jury is still out on this one – it is heading to the Ontario Court of Appeals – but we know the answer. Don’t buy insurance from a 1-800 number that might be in another province or another country! Meet with your broker face to face. Ask questions. Understand your policy and then sleep well!

How much is enough insurance? Call a professional broker at McDougall Insurance & Financial and have this discussion today.