The Financial Institutions Act requires that the information contained in this Disclosure Notice be provided to a customer in writing prior to the customer entering a financial transaction.

RE: Application for Insurance for Commercial General Liabilty? Program, Oasis Outdoor Adventure & Sports Insurance Solutions Inc.

RE: Application for Insurance for Equipment? Program, Oasis Outdoor Adventure & Sports Insurance Solutions Inc.

RE: Application for Insurance for Property? Program, Oasis Outdoor Adventure & Sports Insurance Solutions Inc.

1. Oasis Outdoor Adventure & Sport Insurance Inc. is licensed as a general insurance agent by the Insurance Council of British Columbia.
2. This transaction is between you and Lloyd's of London, Traveller's and Various MGA's.
3. In soliciting the transaction described above, I am representing Oasis Outdoor Adventure & Sports Insurance Solutions Inc. which represents Lloyd's of London, Traveller's and Various MGA's.
4. The nature and extent of my interest in Lloyd's of London, Traveller's and Various MGA's is none.
5. The nature and extent of Lloyd's of London, Traveller's and Various MGA's interest in me is none.
6. Upon completing this transaction, I will be remunerated by way of commission or other remuneration which will be paid to me by Oasis Outdoor Adventure & Sports Insurance Solutions Inc., the agency which I represent.
7. The Financial Institutions Act prohibits Lloyd's of London, Traveller's and Various MGA's or me from requiring you to transact additional or other business with Lloyd's of London, Traveller's and Various MGA's as a condition of this transaction.

I have read the above terms and conditions and agree to proceed with the application.

REPLACEMENT COST INSURANCE

If you have replacement cost insurance, your claim will cover the lesser cost to repair of replace the damaged property to their original condition or buying new items of like kind and quality to the ones lost; there will be no deduction for depreciation. This provides the highest level of coverage.

This means, if your property is totally damaged in a fire, the claims payment you receive will allow you to restore the property with materials and features as similar as possible to the damaged property. Your policy limit on the property must represent the cost of materials/items of similar kind and quality.

• Pro: With a replacement cost policy, the money you receive in a claims payment will allow you to adequately restore your lost property (New for old)
• Con: Premiums for replacement cost policies are generally higher than premiums for actual cash value policies as the limits have to be equal to brand-new materials and not reduced for depreciation.

ACTUAL CASH VALUE

If you have an actual cash value policy, your claims payment will be based on the cost of buying items in similar condition to the ones you lost; replacement cost minus depreciation. For example, if your building is damaged in a fire, we will determine the current value of that building in its condition and provide you with that amount as a payment.

• Pro: When calculating items at actual cash value, you’ll likely be charged a lower premium.
• Con: If you purchase new items to replace the ones you’ve lost, you’ll be on the hook for the difference between the insurance payout and the cost of a brand new item. Or, if you choose to replace with an older or used item, you may find it hard to find something satisfactory.

CO-INSURANCE Explained

The co-insurance clause is a common and often misunderstood part of property insurance policies.

As the property owner, you assume the responsibility of always maintaining the required amount of insurance. If you do not insure up to the percentage specified in the co-insurance clause (usually 90% of the total replacement value) and your limits are not adequate, you could be left responsible with co-insuring a large portion of the property. In the event of a claim, you become a "co-insurer" and share in the loss by having your payment reduced.

EXAMPLE: In A Typical 90% Co-Insurance Situation:

If the replacement cost value of the building / property is $500,000 the minimum amount of insurance that must be carried is $450,000 (90% co-insurance clause). Now, assume you carry only a $300,000 limit of insurance and you suffer a loss in that amount:

Since the amount recoverable is only $200,000, you (the "co-insurer") are responsible for the $150,000 shortfall.

If you insured the $450,000 no penalty would have applied, and you would have recovered your loss in full.

Insurance To Value - How To Choose Your Limit

To ensure that proper limits are in place and the proper cost per square foot to replace or repair your building or equipment with new materials is chosen, it is suggested to get a professional appraisal. This will take into consideration all the required elements that a replacement cost policy wording encompasses. A professional appraiser will determine items such as by-laws or demolition and salvage costs and take into consideration the frequent changes in building materials and labour that should be included in the value.