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FCAC unveils consumer insurance guide

Online resource helpful, but could go further, says IBAC.

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Just weeks after a national task force underscored the need for better financial literacy, the Financial Consumer Agency of Canada has released Understanding Insurance Basics, an online insurance guide for consumers.

The guide explains different types of insurance–life and health, property and casualty, and credit insurance–and outlines how premiums are calculated. It also offers an overview of how to maintain coverage and make claims.

“The main purpose is to help Canadian consumers understand that they should identify their insurance needs before buying insurance,” Ursula Menke, the  FCAC Commissioner, said in a statement introducing the guide.

“Insurance is an important part of financial planning, but the field may sometimes be daunting,” she said March 24.

Insurance ABCs

Can the guide be a good broker tool? The spokesman for the national broker association calls it “useful.”

“We are supportive of any means that tries to educate consumers on how to be better informed about insurance. In our view this goes in that direction,” Steve Masnyk, spokesman for the Insurance Brokers Association of  Canada (IBAC), told Canadian Insurance Top Broker. “However we believe it does not go deep enough explaining what the differences are between the various distribution channels.”

The guide points out the difference between an agent and a broker, but doesn’t cover direct or online options for coverage.

Find the Understanding Insurance Basics at http://www.fcac-acfc.gc.ca/eng/publications/insurance/uinsurance/uinsurance_toc-eng.asp.