DO I REALLY NEED HOME INSURANCE?
The short answer is yes!
A house is often the single largest financial investment you canmake. Without insurance, your most valuable asset is vulnerable tofire, theft and other disasters.Home insurance can help you pay for big expenses you couldn’tafford after a disaster – for example, replacing your home andall your possessions after a fire. It also includes additional livingexpenses in the event you are temporarily unable to live in yourhome due to an insured loss.Unlike car insurance, home insurance is not mandatory by law.However, most banks or mortgage holders will insist that youpurchase home insurance – and show proof – before they’ll lendyou money to buy a home
BUYING HOME INSURANCE
Home insurance is more than just a policy guarding against fire, theft, hail orwindstorms; it represents peace of mind. Because coverage often varies from one
insurer to the next, it is important to select a policy suited to your specific needs.Here are some things to consider:Who is insured?Home insurance covers the property, contents and personal liability of you(the policyholder), your spouse or partner and your children (age limited).The policy also covers:è Dependents under the age of 18 Dependents under the age of 21, who are students either living in thehousehold or temporarily living away from the insured principal residence
Remember: If you share your home with a friend or relative, or rent out part of your residence, you must let your insurance representative know.
Who can sell you insurance?• Insurance brokers who deal with a number of companies and try to
find you the best coverage• Insurance agents who sell insurance for a single company
Do you qualify for discounts?
Before you decide on an insurer, shop around to compare prices, coverage
options and quality of service. Ask about available discounts for:
è Homes with smoke detectors and monitored intruder alarms
è Membership or employment with particular organizations
è “Loyalty” for existing insured clients (for example, if you choose to insure
both your car and home with the same insurer)
è People who have never had an insurance claim (“claims free”)
è Senior citizens
è Homes of a certain age
COVERAGE
Liability
Regardless of whether you own or rent your home, you could be held liablefor any bodily injury or property damage unintentionally caused to others.
The personal liability portion of your home insurance provides coverage in the event this happens on your property or anywhere in the world.For example, if a visitor were to be injured by slipping on a snow-covered walkway on your property, you may be held legally responsible. If you were
found negligent, the personal liability portion of your home insurance would cover the damages resulting from the injury up to the coverage limit. No
deductibles apply. Liability coverage does not apply to injuries sustained by you or members of your household.
PERSONAL PROPERTY
Know your stuff
To find out how much insurance you’ll need, you can make an inventory of all your possessions, noting the approximate replacement value of each item,
along with makes, models, serial numbers and other identifying marks. Draw up a list of all the items in each room and update it regularly. You can also
photograph or videotape your belongings. An MP3 player or Smartphone could be useful for making a list of collections – books, tools, stamps, etc.
Keep receipts for major items. Be sure to store your inventory records in a safety deposit box or other secure location away from your home. This will simplify things should you need tofile a claim.
What is not covered?
Business equipment is covered only while at your home, typically up to a
$2,000 limit. There is no coverage for samples and merchandise for sale.
If you plan to be away from your residence for an extended period, speak to your
insurance representative about any actions you need to take during this time,
particularly during the winter months when pipes may freeze. Insurance coverage
on your home and its contents may cease automatically if your home becomes
vacant without prior notification to your insurance representative.
Damage to your lawn is not covered although some insurers may offer extended
coverage.
Property of people who live with you but are not related to you (unless declared
legal dependents) is also not automatically covered by your policy. For more
information, speak with your insurance representative.
Work from home?
Be careful. Home insurance is not business insurance; thus, it is not designed toadequately meet the specific needs of self-employed individuals who work from
home. You are obligated to notify your home insurance representative of your home-based business. Failure to do so can impact your home insurance.
Be sure to let your insurance representative know if you store or carry business materials, tools or equipment to ensure you have the right coverage for your
professional activities. Regardless of the type of business you’re running from your home – for example, a daycare, hair salon or communications firm – you’re
obligated to notify your home insurance representative. Failure to do so can impact your home insurance.
THE BUILDING ITSELF
Know your home
If you own your home, your home insurance policy will cover the building, contents and outbuildings (shed, detached garage, etc.) on the property, with
some limitations. For insurance purposes, the amount required for your building corresponds to what it would cost to replace in the event it is completely
destroyed. The replacement value of your home reflects its insurance value which may differ from the market value and municipal tax assessment value.
To determine your home’s replacement value, your insurance representative will need to know basic information about your home: age, size or area (square
footage and number of storeys); type of construction; type and age of roofing; type and age of heating; number of fireplaces or woodstoves; any unique features
(custom built appliances, swimming pools); distance from the nearest fire hydrant and responding fire department (municipal or volunteer); any security measures
within your home (alarms or smoke detectors); and any other structures on the property (detached or attached garages, sheds, etc.).
With these details, your insurance representative can calculate your home’s estimated replacement value and ultimately, the building coverage limit on
your policy.
It is important to note that if you are planning to make any changes or renovations to your home (for example, installing a wood stove or fireplace,
adding a new bathroom or building a basement apartment), you mustcontact your insurance representative before any work has begun. Failure to do so may affect coverage, in the event of a loss. What is a peril?
A peril is a chance event that is unexpected and accidental as far as the policyholder is concerned. For example, if a garage door is spray painted with
graffiti and must be removed and cleaned, the damage is due to the peril of vandalism. However, the gradual deterioration of shingle roofing or the rotting of
wooden fencing is natural and expected, and therefore, not an insured peril. Home insurance policies offer coverage for either named perils, such as fire,
wind, theft, etc., except those excluded or a combination of both.
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