melloInsurance

Serving our clients, Serving our community

Lyndon Block

Do I need to worry about flood insurance?


“It’ll never happen to me!” – A common expression by many; until it does. I’m pretty sure most residents in Calgary and High River would have said similar statements prior to the flood in 2013. That flood amounted to over $5 billion dollars in damages. There have been other major disasters in Fort McMurray ($10 billion), Slave Lake ($850 million), High River & Lloydminster. 

As much as we like to think that we are out of harm’s way, anything can happen. It is important to be as prepared as possible. You won’t predict everything, but you can do your best to be prepared. 

The Saskatchewan Government had a disaster relief program called PDAP, that steps up to help relieve people in times of disaster. However, this doesn’t mean you can cancel your insurance policy because the government will pay for everything. Quite the opposite. PDAP doesn’t respond to every type of disaster and there needs to be government funds available. Also, to be an eligible claimant under the PDAP program, the claimant needs to prove he took all measures possible to protect their property – this includes insuring the property. If you have coverage available and you decline it, the PDAP program may not respond as you had the option to purchase the coverage.

Why am I talking about this?

Well as of this year, Flood Coverage is now available with most insurance carriers. Some companies offer full coverage – policy limits. Other companies have a capped amounts varying from $10,000 to $100,000. Some carriers have tied the coverage directly to the sewer backup coverage and have named it “Water Protection Coverage.” If you had sewer backup coverage this coverage was automatically added into your policy. It is important to check with your broker and see if you have this coverage on your policy. We understand that due to geographic location that this coverage may not be needed by you or it may be unavailable to you. Whichever case, we strongly suggest you look into the flood plains in your area, either through the water security agency or through the flood map. Flood Smart Canada is also a good resource for flood prevention.  

With this information you can make an educated decision, and not just a guess. We have seen many disasters happen overnight in areas that there “shouldn’t” have been a problem. Don’t be one of those headlines. If you opt out of the insurance coverage, and a disaster strikes, PDAP will ask for a copy of your insurance and if it shows you had the option to purchase Flood Coverage but you declined it, they have the ability to reject your claim for disaster relief. So again, it’s important to check with your broker.

There are different types of flood scenarios & coverages: 

  • Flood – the rising of, breaking out or overflow of a body of water or watercourse whether it is natural or man-made.
  • Surface water – water that is above ground on the surface where it doesn’t usually accumulate under ordinary circumstances. 
  • Ground water – water that is in the soil beneath the surface of the ground. Coverage is provided only when it’s sudden and accidental, and related to a flood or surface water event. 
  • Sewer Backup – Water or sewage that backs up, escapes or overflows from the sewer, sump or septic tank. 

Disaster can hit at any moment. Being located in the prairies has its advantages to avoiding earthquakes, tsunamis, avalanches and mudslides. However, this does expose us to high winds, hail, floods and forest or grassfires. Our job is not only to manage and insure those risks, but to make sure everyone is prepared and safe for when disaster strikes. If you have any questions about this coverage or any other concerns, please contact our offices and we can help you out.

Thanks for reading! Stay safe and take care!

The New PST – Who doesn’t love tax policy changes?

If you are like me, there is nothing more relaxing than sitting by the fire and reading of the annual provincial budget; either that or filing my income tax. Tis the season! 

In the 2018-19 provincial budget, the Provincial Government decided to remove the exemption of PST on used light vehicles and restore the trade-in allowance.  As a result all vehicles are now taxable. They have also removed the $3000 PST deduction and replaced it with a $5000 exemption. As an SGI broker we collect tax on behalf of the government. So please don’t shoot the messenger!

These changes were made effective April 11, 2018. We will have a few Q&A answers below to help you understand what these changes have done and how they will impact you.

Are there still exemptions for PST on used vehicle sales?
Yes, if you have purchased a used vehicle at a value of $5000 or less, PST will not be collected on this sale. However, we have seen instances where the red book value has overruled the bill of sale value and you are required to pay PST on the red book value. For example: You purchase a 2010 Chevrolet 1500 for a price of $4995. You got a good price on the truck as the body is beat up and the vehicle needs some definite work. However, when you come in to license the vehicle, the red book values that truck at $10,000. You will be required to pay PST on $10,000 = $600. We have discussed this with Sask Finance and although we don’t agree on this process, this is currently the practice in place. Sask Finance has an appeal process in place to try and recover your money. However, you need to talk to the Ministry of Finance directly on how to do that.  

So which vehicles, exactly, does this exemption apply to?
This applies to all non-commercial used vehicles registered for personal or farm use, including:
 – cars, SUVs, light vans & trucks (1 ton and less)
 – motorhomes and buses
 – heavy vehicles
 – campers
 – motorcycles & mopeds
 – snowmobiles
 – class T and F registered trailers

If I bought a vehicle for $10,000; does that mean the first $5000 is PST-exempt? (This is how the $3000 deduction worked. ie. first $3000 of the purchase price was PST-exempt.)
No, PST would apply to the full $10,000 or the red book value, whichever is greater.

What is the Red Book value?
This is an industry valuation of vehicles 10 years old and newer; it is used to determine the wholesale value of vehicles.

How does the trade-in allowance work?
With this change, the PST is calculated on the value of the newly purchased vehicle (new or used) less the trade-in value. For example, You purchase a vehicle at $20,000, but you trade in a vehicle worth $8,000. You’ll pay PST on the difference of $12,000.

If I bought a vehicle prior to the April 11th, 2018 deadline, and was unable to register it, do I have to pay PST?
Yes, for private sales, the deadline applies regardless of the date on the bill of sale. For more information visit the Ministry of Finance website or call 1-800-667-6102.

Are the rules for gifting vehicles to family members changing?
The current rules allowing vehicles to be gifted to qualifying family members (provided tax has been paid previously) is now extended to light vehicles as well. “Qualifying family members” are defined as: Spouse and common-law spouse; parent or step-parent; child or step-child, grandparent and step-grandparent; grandchildren and step-grandchildren; brothers, sisters, step-brothers & step-sisters; legal guardian; foster-parent; father-in-law, mother-in-law; son-in-law and daughter-in-law.

If you have a Provincial Sales Tax (PST) question:
Phone: (306) 787-6645   Toll-free: 1-800-667-6102  
Email: sask.tax.info@gov.sk.ca

As this can be a tricky subject and each situation may have different circumstances, we encourage you to give Sask Finance a call to help you out in your situation as they have more knowledge on the changes at hand. You can also contact our office and we would gladly help you out as best we can.

Farmers, Are You Really Ready to Go?

The oil is changed, fuel is topped up, seed tank is full, Spitz are in the cup holder, and the Coop bulk delivery truck just topped off your anhydrous.  Time to turn the key and crank that sweet John Denver on that opening headland right?  Country roads, take me home…..

Wrong.

You traded off your drill last winter and upgraded your tractor.  You meant to call the staff at Blocks Agencies to have these items updated on your insurance policy, but those Toronto Maple Leafs decided to keep on playing hockey into the spring and you haven’t been able to do that yet.  You had the best intentions of getting this done, but in the end (to borrow an old saying), good intentions didn’t build the streets of Rome did they? Now it’s time to get going and you are second guessing whether you added these items or not.

Don’t fear- this can be taken care of very quickly.  Anyone at our office locations can check your policy documents, review the items you have insured and make the corrections in a matter of minutes.  Hitting the field prior to doing this could prove to be a costly mistake if you are under insured, as you could be looking at coinsurance penalties (see our blog on coinsurance) or worse yet, you could lack the coverage entirely and be paid nothing for a claim should one arise.  There are plenty of #tractorfail videos and pictures where the operator either fell asleep while the autosteer was doing its thing, or just couldn’t get their hand out of that bag of Doritos in time to make the turn at the headland.  Whatever the case may be, you need to ensure that you have these situations covered so that you can recover quickly, mitigate downtime and maximize efficiency during the claims process.

Reviewing your machinery is just the tip of the iceberg. Fertilizer, Chemicals & Seed Coverage. Loss of use, fire fighting, or adding new buildings that were constructed are all things that should be reviewed as operations change all the time.

It is important to make sure that the “I” is dotted, and the “T” is crossed before heading out this spring.  Give us a call to double check your policy- we will be happy to talk to you and to assist in any way needed to put your mind to ease that everything is done right.

From all of us at Block’s Agencies, have a great seeding season and stay safe.  Slow down, Check twice and be careful.  We look forward to seeing you all after the spring rush is over!

Keeping your family secure with an Auto Pak.

There isn’t anything more important than family. That’s what I tell myself, when my newborn is screaming at all hours of the night or my Grandfather tells me that “I had it easy.” “Life was so much harder back then.” He’s not wrong. I just wish I didn’t have to hear about it all the time. I think today is easier in the sense of a “physical demand” on our bodies. However, with the online world, it brings its share of struggles as well. #CyberBullying #FailVideos – You make one mistake and you will relive it for the rest of time.

That is all completely unrelated to what today’s topic is about, other than the word family. We’re talking about “Family Security.”

What is Family Security?

It is a coverage that is usually included on every Auto Pak Extension Policy. When you purchase an auto pak and have this endorsement, it extends to your family in your vehicle while you are in operation. It covers you if you are a pedestrian and are hit by a motor vehicle, and it also covers you while you are riding in another persons vehicle.

What this coverage does is protect you in the event you are hit by an uninsured motorist or an underinsured motorist. For example: A drunk driver or someone with a suspended license.

If you are hit by someone like that, they will not have any liability coverage to pay for the damages you suffer. You will be taken care of by SGI, if you have the no fault coverage for injuries, but any additional income or pain and suffering would have to be collected through civil court, which may amount to nothing. This is where Family Security steps in. If you carry an auto pak with 2 million liability, you will have $2 million of Family Security coverage to pay for the additional costs incurred for you and your family as your recover from this accident. Any additional costs for trips to the doctor, medications, loss of income or other expenses in excess of what SGI, Workers Compensation or Disability plans would be covering can be claimed under this plan.

When you buy a package policy, you will automatically obtain liability coverage to extend to your vehicle operation in case you were ever negligent. The family security coverage matches the limit of liability you carry, up to $2 million.

This is something that is not “sold” to the customers who carry an auto pak. But it is a needed coverage if you are involved in an accident with a person who shouldn’t be on the road. This is a simple way to protect yourself and your family from potential costs that are not in your control.

Talk to us about adding a package policy to your vehicles. A liability/family security policy on your vehicle can be as little as $4-5 per month. It’s a small cost that could pay big benefits if something tragic were to happen.

Co-Insurance. Why share the claims burden?

How many times has it happened to you where you thought you were entitled to a certain return on an investment, and it was laced with hidden costs and fees?  Whether it is a RRSP, GRC, Mutual Fund or another type of financial initiative, it always seems like there is a hidden cost involved in claiming your investment on your own terms.  Insurance policies, at times, can feel the exact same way.  Whether it is a deductible that wasn’t properly explained, or a settlement that is reduced by a clause in the contract, it can feel like there is a battle at claim time.  Co-Insurance is one of those types of situations in a claim that can also cause frustration and confusion.


Where did Co-Insurance come from, and why do insurance companies enforce such harsh penalties?

The answer stems back to the early 1800’s back in London.  Insurance companies back then were trying to understand how to fairly adjust a partial loss where a building had been inadequately valued.  For example, there would be an instance of a large barn catching fire, and that fire being put out prior to total destruction of the building.  The front half of the barn was almost destroyed with $30,000 worth of damage, while the back half of the barn suffered little to no damage.  This presents the question in valuation.  If the entire building was worth $100,000, but only got insured for $50,000, which half of the building was the insurance purchased on?  The insured would insist that the insurance was purchased on the front half (of course!), and the insurer would insist that the insurance was purchased on the undamaged back half of the building (classic!).  This would result in frustrating court processes to determine where the insurance started, and ended. 

To rectify this situation, the courts along with the insurance companies came up with a relatively simple system to eliminate these long arguments and questions of insured property.  This was called the “Co-Insurance Clause.” They concluded that the insured (policy holder) and the insurer (the company the policy was purchased from) would co-insure the loss.  This clause is derived from a notion that the policy holder would take partial responsibility for under insured property on a partial loss, and that the insurance company would also step up, and take partial responsibility. 

The solution would save the people, and insurance companies abroad, tons of legal costs, and would go on to reduce insurance premiums as a result.


The co-insurance clause is applied to partial losses only, and it encourages policy holders to carry adequate limits of coverage on property.  The clause completely revolves around one simple formula to determine the appropriate amount of shared responsibility between a policy holder and insurance company to co insure any type of situation.  The formula used for these settlements is as follows:

What did the affected property get insured for?      X   Amount of the loss  =  Settlement
What should have the property been insured for?

Using this formula with our previous example on the $100,000 barn; the amount of responsibility shared in the partial loss between the policy holder and the insurance company would be calculated as follows:

 $50,000     X    $30,000    =    $15,000 Settlement
$100,000

This formula ensured that the co-insuring of the partial loss was equally shared between the policy holder and the insurance company in a way that was fair, and easy to calculate. 

So here’s the rub

Why suffer a co-insurance penalty?  The good news is that there is no reason to.  The simple way to avoid these situations is to ensure that you carry proper limits of coverage on your property so that this clause doesn’t even become a factor.  Talk to your broker at Block’s Agencies today to ensure that you are carrying adequate limits of coverage for your property.  You will sleep better at night knowing that you are adequately insured, and that you don’t have to worry about a nasty co-insurance surprise!

Peace, Love & Unity this Easter Season

Easter is coming up this weekend. Winter has dragged on for so long that it’s hard to believe it’s almost April. During this holiday season, we need to remind ourselves of what’s important in our lives.

Our slogan for this holiday season is – Peace, Love and Unity. With all the turmoil in the world today, it seems like we need this more than ever. Whether it’s news about our own government, or daily information about Donald Trump or what is happening in all other countries of the world; our news feed is filled with anger, pain and animosity.  What happened to all the love and laughter in the world?

Well, here at Block’s Agencies, we are a firm believer in Love and Laughter! Every one of our staff members have an attitude of compassion, empathy and gratitude. We treat every customer the same, no matter how their day is going. We strive daily, to be a place of business that attends to your needs in a way that leaves you feeling encouraged and looked after. Maybe if we’re lucky, you’ll leave with some good jokes and a few stories.

This season, we encourage you to spend time with your loved ones, but to also reach out to people outside your normal circle. Maybe there is someone who could really use a helping hand, whether it is doing a physical project, going through an emotional strain or struggle or maybe they are having a tough time with their health. Sometimes, we feel too busy to be bothered with such tasks, but in the end, we will all be better for it.

Peace, Love & Unity. Three words that have a ton of weight to them. In order to obtain Peace, we must love one another. Love takes work, a lot of work. We all have differences and sometimes we don’t agree on matters, whether they are political, religious or we just disagree on the choices others make. It doesn’t make us any better than them.  All we can do, is look into the mirror and be the best person we can be, for today. Once we get to that level, where we put others before us (which takes great sacrifice), then we can be unified.

The world pounds its chest about individualism. “What can the world do for you!” That is the wrong attitude. Our perspective should be on “What can I do to make the world a better place.” It sounds cliche, but it makes a lot of sense. If we flip that switch, and make the extra effort to “pick up the trash that some guy threw out his window” or “give the homeless guy a subway gift card” or “encourage a co-worker who’s going through a difficult time,” the world will become a better place. It will not happen overnight, but “it takes time to move a mountain” – as Anne Murray would say.