Paul Martin and Colin Rooke discuss New Year’s resolutions and tips for insurance in 2022.
Paul Martin:
Welcome to Risky Business, commercial insurance with Butler Byers. Paul Martin here, the business commentator on CKOM, and joining me, Colin Rooke, commercial risk reduction specialist with Butler Byers. Colin, Happy New Year, first of all, and trust that the holiday season treated you well.
And because it is so early in the new year, it’s one of those things that, you know, it’s just a day on the calendar, but psychologically it’s a big thing, right? We start a new year and it was like, maybe I can rethink the way I do things. I put resolutions out there. I try and become very saintly for at least the first week of the year. I’m just curious, when the calendar turns over to January 1st, from the insurance industry’s perspective, I mean, what are the things we should be thinking about there? Are there New Year’s resolutions about insurance? Are there tips and ideas, things that I should be checking on? Should I be, you know, I guess there’s that day in the year when we’re supposed to check our smoke detectors, right? Is there something that, January 1st comes along, what bells go off in your head as the risk reduction guy?
Colin Rooke:
Yeah, it’d be really interesting to see how many people include insurance-related items as part of their New Year’s resolution.
Paul Martin:
Yeah, probably not many. But you know, here we are, we have a chance to actually add ourselves to the list. So here’s your chance. Shine.
Colin Rooke:
Yeah. No, it’s a good point. And with a new year, I think it’s just a good time to sort of reevaluate and talk about kind of the industry as a whole. And these topics will be pretty broad in nature. It’s just things to really think about. And I do want to discuss a few global trends, like what’s going on, for example, in insurance fraud or vehicle claims, changes, or just addressing, why is my insurance, why do the premiums keep going up? Like in 2022, am I going to see an increase? And this isn’t just for commercial insurance, this is for everybody. And again, and also just a few things to think about. You know, we’ve just gone through the gift giving season. So just a good topic to talk about, okay, if you had a particularly successful holiday season and amassed a bunch of stuff, have you remembered to let your broker know? And I’ll talk about the consequences of sort of forgetting to do that.
And then if we have time, I want to have a little cyber jab and talk about the prevalence of phishing scams and how the problem doesn’t seem to be going away and how easily Canadians are being tricked.
Paul Martin:
Well, you raised an interesting point about the holiday season and gift giving. And that’s certainly, you express some gratitude to the person who gave you the gift or whatever, but I would never have thought that I should add that to an insurance policy or flag it with my broker. That perhaps I got a, say somebody went to an art show or something and picked up something by a local artist, that I should be, you know, what should I be doing with that? If I got a piece of art, for example.
Colin Rooke:
Yeah, exactly. And sometimes, like using the art example, it’s certainly considered rude if, Paul, you give me a painting and I say, “Hey, Paul was this pricey?” But on some level, you should know that. Because depending on the value of the art, and I don’t want to turn this into just a home insurance policy discussion, but you may not have coverage for it under your home policy. And you think about, maybe you get an aunt’s wedding ring or jewelry from a family member, or your significant other goes all out and buys you an expensive watch, really expensive watch, that sort of thing. It’s really important to remember to just call your broker or review your policy to say, do I need to add this? Is it covered in the blanket limit? What do I need to do if anything?
And from there, you want to make sure that you’ve got proper documentation. So for example, you get an autographed jersey of your favourite your athlete. Well, one, if you have an appraisal, you want to make sure you have that, but you want to have some sort of documentation that you actually do have it. So we talk about taking photos, taking videos, an inventory, that sort of thing. Because in the event of a loss, you are going to be expected, required, to prove it was yours. And then from there, prove the authenticity. And so on the extreme, there is a recent case where a piece of art worth over $14 million U.S. was not added to a policy because the individual that received this piece of art was unaware of its value. And then there was a large, there’s a property, a claim, there’s a loss, major loss. And the individual that had donated that piece of art said, well, is this thing okay? And I hope you have it insured. The individual did not realize that they needed to. Which really prompted this discussion. That significant gifts, you want to make sure you are covered, that they’re added to your policy, that they are listed if need be. And it’s just a good time to really take inventory. Have you been spending too much time on Amazon and filled your home full of stuff? Well, just make sure you’ve got the appropriate coverage.
Paul Martin:
You know, one of the questions that comes up periodically, I mean, I guess the notion of sports memorabilia is pretty common stuff, and so that is not out of the ordinary. The piece of art might be more the unusual one. But sometimes you’ll get cash. If you’re sitting on cash, I mean, what’s the story around that?
Colin Rooke:
Yeah. I mean, if it’s sitting at your house you’ll certainly want to make your insurer aware. I mean, on certain policies, there is a small limit, emphasis on small, for valuable papers, items, and including cash. But you know, that’s an important one that you’d want to reference, that I do store a lot of cash in my home. And in the event of again, an incident, is that cash covered? And of course you would have to have some sort of documentation that it’s there. You know, there’s the joke that home burns down and, oh, I had 15 Picassos in there. Well, you have to prove that you had them in the first place. So it’s not as simple as just saying you’re out $120,000 that you’d been keeping under a mattress.
Paul Martin:
Well, you never end the ability to learn on this stuff. I mean, it’s really quite remarkable. And when we talk about it and you lay it out like that, it just seems self-evident, but on the other side is we never think of it. So that’s the very reason for the conversation today, I guess.
Colin Rooke:
Yeah. And just with the same vein of going through tips, I do want to talk about vehicles. So if you’ve tried to buy a new one, a used one, or frankly need any major repair, I mean, everyone knows there’s a shortage and we have markups all over the place, delays, chips are delayed. But I do want to talk about a rapidly rising trend now. And so vehicle theft, re-vinning has always been an issue, but now it’s skyrocketing. Because the value of stolen vehicles is shooting through the roof. I mean, if you drive any sort of truck, you’re at risk. And not only are you at risk, I mean, it’s going to be re-vinned in a minute and it’s going to be off to the United States and you’ll never see it again.
And so it’s very important that you’re doing your part to, well, one, make sure it’s properly insured. Two, make sure that you’re keeping your valuables out of it. Three, the vehicles are locked, and you’re parking those vehicles in the safest, I guess, place that you can. Try not to leave a vehicle overnight at a strip mall where there’s very little traffic, that sort of thing. But the other kind of rising major issue is, again, related to vehicles, is catalytic converters going missing. And with the increase of the production of hybrid vehicles, the catalytic converter in a hybrid vehicle is worth about five to seven times that of a regular vehicle. So most don’t know this, but just in a regular vehicle, I mean, you can get about 250 bucks for a catalytic converter. And I hope I’m not educating thieves right now, but on a hybrid vehicle, like $1500 for the metals contained within.
And on the commercial side of things, I mean, whole fleets of vehicles are getting the catalytic converters cut out. Buses, especially. Or any large actual trucks that are sitting around. They’re showing up in the morning, they’re flipping a sensor and they’re realizing that, yeah, this has been cut right out. So again, make sure you’re checking for this stuff. Properly lit areas, video if you can. And just, again, something to be cognizant of, that in addition to now more than every year stolen vehicle is worth more than it’s ever been, as is the value of the parts on the vehicle, like rims and catalytic converters are going missing all the time.
Paul Martin:
Very insightful stuff, Colin. Thanks. I’ve just got to take a break here. We’ve got to take a little break. So we’ll come back. We’ll pick this up with maybe couple other tips. You’re listening to Colin Rooke, commercial risk reduction specialist with Butler Byers. This is Risky Business. Back after this.
Welcome back to Risky Business, commercial insurance with Butler Byers, Paul Martin, your host here and joining me Colin Rooke, commercial risk reduction specialist with Butler Byers. And Colin, before the break we were talking about things that should come to mind because it’s the start of a new year, and sort of some of the trends that are out there. I’m really intrigued by the way COVID is changing supply chains, all of those kinds of things. And it’s pushing prices for some products, like vehicles in particular, pushing them up. Used cars are worth more than they were when they were new. I mean, it’s really quite remarkable. And I hadn’t thought about that becoming a commodity that would become a target for thieves. But you’re saying this is something we’re really seeing a big increase in.
Colin Rooke:
Yeah. I mean, there’s a rapidly rising trend of the Canadian car dealer selling the used and some new vehicles to the States. I mean, you trade in your model, it goes right to the States for the, because they’re taking advantage of course, of the exchange and the supply issues. No different for thieves. When you can’t get any used cars on your used car lot, you start to ask fewer questions. And so vehicles are going missing and getting re-vinned and stolen at a higher rate. And I’ve followed these statistics for quite some time. And I know I said every truck, which is true, but it always surprises me that Honda Civic is just like consistently the number one stolen vehicle. I’m not sure why. I mean, there certainly are a lot of them, but if you’re in a Civic, watch it pretty close.
Paul Martin:
Well you know, it wasn’t that long ago, there was a campaign going on about don’t leave your keys in your vehicle. I mean, this probably just reinforces that.
Colin Rooke:
Yeah. And the speaking of keys, another trend is that they’re able to connect to the signal from your digital key, come into your car remotely, that an app is the actual key, and then get into the vehicle. So that’s getting worse. I haven’t seen a remedy to it, but it’s certainly becoming easier with digital key fobs and also app-based keys to then get into a vehicle. So I assume a solution is coming, but again, just be cognizant of that.
Paul Martin:
Well, we’re talking here more about personal lines, but I guess it still affects commercial property owners too. But really you’re talking in a grand way about property claims going up and that’s translating into higher premiums, I’m thinking right across the board, right? Whether that’s commercial or for your personal property.
Colin Rooke:
Yeah. You know, we spend a lot of time talking about premiums increasing. And that’s commercial and personal lines. And it’s been each and every year for quite some time. And I do want to shed just a little bit of light on some of the reasons for your home insurance that you may not have considered. And two of which I think if you spent some time thinking about, you’d get there yourselves, but urbanization and also, strangely enough, solar panels. So you’ve got people living closer together in smaller spaces, more stuff. So then a hailstorm comes in, it affects a lot more individuals than it normally would. Plus inside every unit there’s more. And if anyone’s ever looked into purchasing solar panels, very, very expensive. And so that is one of the factors that’s driving up, you know, you look at like, for example, downtown Calgary, getting hit with hail. Well, the more people in downtown Calgary, the claims just rise.
The opposite of that though, is urban sprawl. So you’ve got urban sprawl where, in some areas 10 years ago that’s a farmer’s field. No damage to anyone. Suddenly you’ve got a new development, new suburb full of houses. I mean, you look at Ontario, well, just the way Saskatoon is growing, and Regina in this province. And so you have urban sprawl also saying, okay, well now these areas are larger. And homes are being damaged where there never was a home.
But I think this one is going to really make people think. The number one component is social media. And it really does make sense. I post on Facebook that I got a brand new roof and it was all due to an insurance claim. And I’m so happy all I had to do was pay my deductible because a new roof would’ve been X amount of dollars. Well, people see that. And they say, I wonder if there’s any damage to my roof that I could put in a claim for. And that happens. It’s happening at an alarming rate, where people are noticing on social media, the, and I’m not suggesting this is fraudulent in any way, but it’s reminding people to maybe look into a claim. And then when you’re brag-posting, people say, you know what? I’m going to see if I can get a new roof out of my insurer. And it’s working.
And I don’t really know what the answer here is, but I do know that if more people are putting in claims, it’s going to continue to impact pricing. And so, make sure you’re getting the proper advice before you go ahead with it. You know, certainly if you’re concerned about an issue, get it checked out, but don’t just, don’t follow the bandwagon and put in a claim because you think someone else did. Just make sure you’re getting the right advice and that you’re properly informed.
Paul Martin:
Listen, we’ve got about a minute and a half left here. I just wanted to touch on this point you had made at the very beginning of the show about some updates or some new things on cyber. We talk about this a lot, but I know there was a study that you’ve come onto that’s really quite intriguing.
Colin Rooke:
Yeah. You know, quick jab, I guess, at a few industries, but a study out of Quebec did a mock phishing scam recently, and they sent out one million emails to see not only who would open the email, but then who would go down the rabbit hole and keep clicking. And alarmingly, 20 percent of those that received the email opened it initially. And then 14 percent kept going all the way down. But there’s some industries, primarily finance and IT, now, you could argue that the IT firms were just trying to see what was going on, and maybe it was a secured environment, but we’ve got education, finance, I’ll have to admit it, insurance is on this list too, and IT, that really clicked at an alarming rate. And so again, just make sure you’re educating your staff around cyber and what to watch for, and if you notice anything suspicious at all, don’t open it first to determine what it is so then you can tell everyone else. Just leave it.
Paul Martin:
It’s a classic shoemaker’s kid story here, isn’t it?
Colin Rooke:
Yeah. Yeah.
Paul Martin:
That the ones that keep harping to us not to fall prey to the phishing scams are the ones that actually clicked on it.
Colin Rooke:
Yeah, absolutely.
Paul Martin:
Colin, thanks. We’ve run out of time. Really insightful and great tips for thoughts that we should be having as we enter a new year. So maybe we’ll revisit this a little mid-year or something and just see, you know, remind people again.
Colin Rooke:
Yeah.
Paul Martin:
You’ve been listening to Colin Rooke, commercial risk reduction specialist with Butler Byers. I’m Paul Martin. Thanks for joining us. This is Risky Business. Talk to you next time.