I hired a repair person to fix a bug in my state-of-the-art stereo system. However, while he was working on the equipment, it slipped out of his hands, fell on the floor, and smashed beyond repair. He was very upset, but I told him my insurance would cover it. Now my broker tells me that, if the repairman broke the equipment, he has to pay for it. I don't get it -- why isn't it covered under my homeowners policy, regardless of who was responsible? -- Turned Off and Tuned Out

Dear Off and Out:

Now that's a sour note! Your so-called repairman stops at the local burger joint for an order of fries, and the next thing you know, your expensive stereo equipment has slipped right through his greasy fingers! But your broker is right. Mr. Fix-it will have to take responsibility for his slip-up -- you cannot do it for him. In other words, NEVER tell the responsible party: "Don't worry, my insurance will cover it."

Your insurer will compensate you for your damaged property (as long as it was insured in the first place), but then it has the right to try to recover its money from the responsible party (who may have insurance to cover it). This is called "subrogation" -- the process by which one insurance company seeks reimbursement from another person or company for a claim it has already paid. In your case, your insurer can "subrogate" against your clumsy repairman, as long as you hold him responsible for the damage. If you don't give your insurer the opportunity to subrogate, it could backfire on you.

Take the case of college buddies Jack and Jill. Jill trips and breaks Jack's valuable figurine as she falls. Jack feels badly for Jill and assures her that his insurance will pay for it. But when Jack's insurance company tries to subrogate against Jill, she rightfully says that Jack "let her off the hook" by saying his insurance would cover any damage. Consequently, Jack's insurer may not be able to recover its money from Jill, and Jack could end up paying the price; his insurer might refuse to pay him the full amount he is owed for his claim, since he denied the insurer the chance to subrogate. It might also cost him his friendship with Jill.

So never let someone off the hook for any damage, no matter how honourable your intentions. Make your repairman fess up to the accident and you'll soon be singing a whole different tune!

Note: The preceding information is based on the Insurance Bureau of Canada's guideline wordings. Remember, policies vary, so when in doubt, consult your insurance representative.