“That’ll never happen to me!”When it comes to protecting your home and belongings, don’t get caught out! Whether you know the potential risks that you could come face-to-face with, or you simply want to be ready for anything unexpected, make sure you know what to consider when keeping what’s likely your biggest investment safe.Although home insurance is not legally required for homeowners in British Columbia, if you are looking at getting a mortgage to purchase your home, banks will require it to approve your financing. Wherever you are as a buyer in today’s market, we highly recommend being fully insured in the event of any damage caused to your home. That way you’re able to repair or replace what you need, when you need it.
What are some reasons you may need home insurance?In day-to-day life, every now and then something happens that we don’t see coming. Owning a home is no different, except on some levels the unexpected can often come in a greater form. Some of the top things to be aware of and prepared for include:
- damage or loss to your home
- damage, theft or loss of personal possessions
- personal property stolen from your vehicle
- damage or injury to others who visit your home or property
- accidental damage you cause to somebody else’s property
What are some things that might not typically be covered under home insurance?Sometimes referred to as ‘Uninsured Perils’, these are some exceptions to the (coverage) rule. In other words, there is likely to be a few things that your home insurance policy may not insure.Natural disasters happen. Unfortunately, damage caused by earth movements (earthquakes, landslides) or flooding and seasonal damage (water, snow) may not be included in your policy, as well as any pesky damage caused by our animal friends, such as birds, vermin, raccoons, or insects. ‘Predictable events’ such as winter temperatures causing freezing to pipes or snowfall damage to a car may also not be covered.Generally speaking, home insurance doesn’t cover regular ‘wear and tear’ that your home might develop over time. For example, your homes’ interior might show signs of mould, old roofing shingles might start to deteriorate or even wooden constructs might start to rot. A best practice is to have a home inspection done prior to any home purchase to get a ‘heads up’ on areas to consider. From there, other types of additional coverage could be worthwhile looking into for any specific concerns.Keep in mind, when talking through these concerns with your insurance company, and any items you think might not be covered, the more detail you can go into the better.
What does ‘coverage’ really mean?Coverage is the maximum amount of money your insurance company will pay you if you claim for a loss or an event, which is covered under your specific insurance policy.
Who is covered?Your home insurance will generally cover you and your family members, but always check when you’re setting up your insurance and make sure all necessary parties are listed on your policy. Say for example you may have roommates, friends or relatives that stay with you, in which case it might be worthwhile notifying your insurance company and having them added also.
What are some home insurance policies?
ComprehensiveThis will be your most inclusive option to cover both the building and the contents for all perceived risks (except for any of those exclusions we mentioned).
Basic (or ‘Named Perils’)Here you can pay based on perils that you explicitly state and want to cover specifically. By doing this you take on some financial risk yourself for some of the uninsured perils mentioned earlier but will still cover you for common inclusions such as fire, lightning, theft, and vandalism. See more inclusions here.
BroadHere’s something between Comprehensive and Basic. It will apply coverage for the bigger-ticket items like the building itself, but then will cover only the list of perils that you have specified.
No FrillsAt the lower end of coverage options, this is best for homes that don’t meet the usual standards for insurance. It may be that you save money in the long run by looking at how to repair or adjust any requirements (for example ensuring your chimney or fireplace is up to code) so that you can opt-in for one of the higher policies. Speak to your insurance company to find out exactly what your home can and can’t be insured for and what options you have.
Personal LiabilityWhether someone slips on your driveway or is hurt on your property, it’s always a good idea to look at coverage for any bodily injury or unintentional damage caused to others.
How much does home insurance cost?Your premium (the amount you pay to buy insurance) will vary based on a few different factors, because, to put it simply, no home is the same. Some factors that an insurance company will consider when quoting the price of your policy are:
Age of the homeDepending on when the house was built, insurance companies may assess a higher risk to the property.
LocationYour postal code will have historical data around whether it is prone to flooding, vandalism, crime rates and other claims previously made in the area. In addition, the proximity of your home to certain services such as a fire station or fire hydrant might also affect the level of risk associated.
Building materialsThe materials used to construct your home might also affect pricing, as each will also have its own risk factor (based on historical durability)
Your personal historyNever made a claim before? You might find that this makes you a valid candidate to receive a discount on your premium (this will however be at each insurance companies’ discretion).
Your deductibleThe amount that you set to pay personally before the insurance company pays out the difference will also be taken into consideration. An assessment of these factors (plus potential others) will be considered when providing you with the most accurate pricing. Keep in mind that premiums will differ from insurance company to insurance company, so it’s a good idea to spend some time researching your options and finding one that best suits you. We recommend consulting with an insurance broker who can find you the best policy based on your individual needs.
I own a condo. Is this insured differently to a house?Short answer, yes. With home insurance, you are covered for the building. With condo insurance, you’re not paying to cover the whole building, but rather your little slice of the building pie – your units interior and your belongings. Most often, condo owners will pay a ‘strata fee’, of which a portion goes towards a separate Commercial Strata Insurance policy that covers the building. For this reason, you’ll often find that costs for condo insurance are lower than home insurance.
When should I start my insurance cover?If you have found the Havn of your dreams and have signed the contract’s dotted line to move forward, now is the time to start shopping around to find your best home insurance policy. This gives you time to sort out the details and ensure you’re fully covered for everything you need before the closing date on your home.
A Helpful Checklist:
- When you’re moving forward in the purchase process with, book a home inspection. This way you’ll have a heads-up on the wiring, plumbing, furnace, roofing and other internal factors that could influence your insurance policy and premium
- Do your research into local insurance companies, ask friends who they’re insured with and make time to go in and see someone to talk through your options and their pricing for your home and situation. Give yourself time to talk to a couple of different companies and compare
- Create a list of the home’s history to provide the insurance company also. Things such as how old the house is, the square footage, the number of bedrooms and bathrooms. Why? This will help an insurance company know what is within your home for replacement or repair cost evaluation
- Whether buying new or a resale, make sure you’re across any repairs that are still pending and/or underway
- Consider what else you might need coverage for. Things such as personal possessions or your vehicle might not be covered under your home insurance policy but could be worthwhile taking additional coverage out on
- Take photos of the items in your home – from the walls to the bathrooms to the kitchen. Having recent ‘documentation’ of your home will make making a claim a much easier process if it comes to it. The proof is in the pudding, so to speak!
- Additionally, keep an inventory of all your homes contents, from what you start with to all the extras you buy as time goes on. Make sure to remove anything off your policy if you sell it or no longer keep it inside the home as this could adjust your premium also.
- Stay on top of maintenance and repairs because something small can lead to something big. If it’s something you can nip in the bud earlier, nip it, because insurance claims can sometimes be denied if it’s deemed as a long-term issue that was left and not managed