What You Need to Know About Home Insurance in Canada

Having your own home is a big deal because it is one of the largest, if not the largest, investment you will ever make. This is why you need to make sure you protect it with adequate insurance coverage. However, you have to make sure you have an understanding of the type of insurance you are buying, what it covers, the limitations of the policy, the exclusion, the amount of coverage it provides, and how to make a claim or report a loss.

If that’s not enough to convince you as to why you need home insurance in Canada, here are more reasons:

Any time you experience a financial loss due to vandalism, water damage, a fire, or another accidental loss, home insurance makes sure you have monetary protection against lawsuits against you when another person is injured in the event. You can also protect your property so that it can be replaced in th case of a loss. When taking out a mortgage with a mortgage company or a bank, they will insist, if not make it a requirement, for you to purchase home insurance before lending you the money to buy the home.

If you are not purchasing a home and are renting an apartment, house, room, or condo, there is coverage called tenants insurance. Tenants insurance comes in two different forms: Contents and Liability. Contents coverage will reimburse you for damage to your belongings or when your belongings are lost due to theft, fire, or smoke. Liability coverage protects you from such events as lawsuits when someone is injured on the property you are renting.

What Home Insurance Policies are Available to You?
There are three types of home insurance policies. They are:

• Basic – This package is the perfect package for those looking to save a little bit of money. This package provides you with protection for the contents within your home, your home itself, and gives liability coverage. All perils that may occur must be named individually in the policy to be covered.

If this coverage doesn’t seem like enough, it is possible to upgrade to the Broad Homeowners Package. This package covers all risks and individually named perils for the contents in your home. This does come with a higher price than the basic package.

• Comprehensive – This is the most inclusive package, but it is also the most expensive insurance coverage you can purchase for your home. All risks are covered under this type of policy and applies to both your home and its contents.

No matter what type of coverage you purchase, it is imperative that you read the policy carefully because there are some situations that may not be covered.

What is covered by Home Insurance
Detached Structures and Buildings – Home coverage will vary based on where you live. If you’re a homeowner, your home insurance policy will cover your home and detached structures, such as a garage or shed, will be covered.
Personal Property – Electronics, jewellery, clothing, appliances, and other contents within the home will be covered.

Additional Living Expenses – If the police or civil authority has deemed your home unsafe due to a fire or another event, your home policy will take care of additional living expenses. This means that you’ll be reimbursed for expenses incurred while living away from the home, such as having to rent a hotel room while your home is being repaired.
Legal Liability – If someone is injured on your property, such as in a slip and fall accident on your sidewalk because you failed to shovel the snow, the legal liability section of your policy will provide you monetary protection against a lawsuit.
How is Home Insurance Cost Determined?

There are a number of factors considered by the insurance companies when deciding what premiums to charge each individual for their home insurance. The factors that are analyzed to determine what your cost will be include:

• The location of the home
• Type of heating
• Type of electrical system
• Types of pipes and their age
• Age of the roof
• The main use of the home
• Past home insurance claims
• How close the home is to a fire hydrant and fire station
• If surrounding businesses are close
• Rebuild cost