- Home/Property Insurance

Homeowners Insurance

Homeowners’ insurance policies provide coverage for your home and contents, as well as liability (if someone is injured on your property) and loss of use coverage. Mortgage lenders require you to have homeowners’ insurance to protect their loan in the event that your home is destroyed.

Some policies cover a narrower range of perils than others. Typical perils that are covered include loss or damage due to fire, smoke and lightning, wind, damage caused by aircraft and vehicles, falling objects, malfunction of household systems and equipment such as plumbing, furnaces or air conditioning, theft and vandalism. You will need to take out additional coverage for loss and damage due to flooding or earthquakes.

Insurance companies will take many factors into account in calculating your premiums, including: the location of your home, its age and condition, construction materials, the square footage and number of rooms. Other factors include: how the home is heated, how close you are to a fire station and fire hydrant and whether you use your home for business or rent out part of it.

You can usually lower your premiums by agreeing to higher deductibles. Your insurance company may offer discounts if you hold multiple policies, are over 55 and retired, if you have been a policy holder for a long time, or if you have installed an alarm system, smoke detectors, fire extinguishers, sprinkler systems and deadbolt locks.

If your possessions are destroyed in a fire or other disaster, the insurance company will require you to provide documentation of your losses. The more proof you have, the better. It is a good idea to make an inventory of your possessions, room by room, including the manufacturer, brand name, serial number, date and place of purchase, and update this inventory regularly. You can make a video of the inside of your home, take pictures of open drawers, open closets and special items. Keep receipts, appraisals and warranty cards. Keep the inventory, home contents video and photographs off-site. Do not throw away badly damaged items until an adjuster has seen them.

For valuable items such as jewellery, fine art, collectibles, furs, camera equipment or other electronics you can add riders to your policy and pay additional premiums.

Be aware that different insurance policies will offer different types of reimbursement for loss and damage. “Guaranteed replacement cost coverage” will pay for structures and items according to what they cost today, even if this is above the policy limit, although some items may still be subject to depreciation. “Actual cash value” will cover you for the cost of replacement minus depreciation. Policies for older homes tend to pay for repair costs or actual cash value rather than for replacement cost.

Compare the coverage offered by different insurance companies as the rates, amount of coverage for different types of structures and possessions, exclusions and limitations will vary. You need to ensure that you have sufficient coverage in the event of total loss of the building and contents.