An insurance guide for your first home
Learn the different types of coverage.
The insurance industry gets wordy sometimes, but a) dwelling, b) personal property, c) liability and d) additional living expenses coverages are straightforward. The key is to know any exclusions or limitations there may be in your policy.
Dwelling coverage means coverage for the house and, likely, any connected building like the garage. It probably even includes other structures like a shed, gazebo, or bunkie, but you’d best ask. It does not cover personal property, such as the possessions you keep in and around your dwelling, from jewellery to bicycles.
Personal property coverage means coverage for all those objects you keep in and around your home. (See above and below re exclusions, though!)
Liability coverage, meanwhile, covers you in cases of bodily injury or property damage related to your property. Meaning? Say a huge limb from your oak tree cracks and falls through the shed next door … the mail carrier slips on your icy walkway, tweaking her knee … or your dog bites your neighbour. If these people sue, Liability is for the legal fees.
Living expenses coverage includes the costs you incur while temporarily relocated, like hotel charges or rent for an apartment.
Know your coverage limits.
That’s the maximum amount your insurance pays for a loss that’s covered. Do your limits pay enough to start over should you suffer a major setback? If not, consider extra insurance to help provide coverage for your home or belongings.
Not to be confused with exclusions and limitations.
Your policy likely defines what sorts of damage, accidents, and catastrophes it doesn’t cover. These probably include the fallout from earthquakes, floods, and types of water damage. If you live in an earthquake zone or a flood-prone area, be sure your home insurance policy provides adequate coverage.
What are your deductibles?
This simply means how much you must pay up front before the insurance covers the rest. Generally, the higher the deductible, the less you pay in premiums (the monthly charges for coverage). Choose an amount that fits your budget and risk tolerance. That is, be sure you can afford your deductible in case you ever have to make a claim.
Replacement cost is not the same as actual cash value.
Replacement cost covers repairs or outright replacement of your possessions or dwelling. Cash value means what those items were worth after depreciation, and usually pays out less.
What’s good now may not still be appropriate.
Life is a series of everchanging stages. Be sure to review your home’s coverage regularly, taking into account the latest changes to yours. Have you done any home improvements or renovations that your insurance no longer adequately covers?
Ask about discounts and bundling.
Some insurance companies offer discounts for advantages in their favour. Examples? Say you install a new security system in your home. You’re less likely to need to make a claim. Or maybe you bundle your home insurance with other policies like auto insurance. In both cases, they may reward you. Taking advantage of available discounts can help lower your insurance premiums.
Consider a broker like PC® Insurance.
PC® Insurance deals with some of Canada’s trusted insurance companies, reviewing and selecting only the best value in home insurance. As a broker, we compare quotes and suggest the best policy for your needs and budget. Get a quote now.
General information not about PC® Insurance home and auto coverage is provided for your reference and interest only. The above content is intended only to provide a summary and general overview on matters of interest and is not a substitute for and should not be construed as the advice of an experienced professional. PC® Insurance does not guarantee the currency, accuracy, applicability or completeness of this content.
