In Canada, mortgage companies require that you buy home insurance to cover the balance of your mortgage in the event that your home needs to be replaced or repaired due to fire or other damage. Here are some tips to help you find home insurance that is right for your family and you.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
A home insurance policy covers the cost of replacing your home and things in it, in the event of fire, damage or theft. It also covers your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home.
All risks to your home will be protected with a comprehensive home insurance policy; other than those which insurance policies do not normally cover, such as natural disasters.
Basic home insurance only covers the specific perils that are set out in the policy. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. Broad home insurance is a mix of comprehensive insurance and basic insurance policies.
What amount of coverage is sufficient?
If your home were wiped off the map, your home insurance policy should cover enough to entirely rebuild and furnish your home. Ask a home builder to walk through your home and give you an estimate of what it would take to rebuild; that figure should be the basis for how much replacement coverage you'll need. Remember to note all the expensive/unique details that would drive up the replacement cost. After you know your home's replacement cost, you choose the type of coverage.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
If something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged, liability coverage protects you.
What will it cost?
Depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors, the cost of your home insurance policy will vary. Generally speaking, more coverage means more cost.
The amount which you are required to pay against the full cost of the damage or repairs is called the deductible. The deductible amount can be chosen at the time you purchase your insurance policy. As a rule of thumb, your monthly premiums are lower with a higher deductible. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
A home insurance policy covers the cost of replacing your home and things in it, in the event of fire, damage or theft. It also covers your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home.
All risks to your home will be protected with a comprehensive home insurance policy; other than those which insurance policies do not normally cover, such as natural disasters.
Basic home insurance only covers the specific perils that are set out in the policy. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. Broad home insurance is a mix of comprehensive insurance and basic insurance policies.
What amount of coverage is sufficient?
If your home were wiped off the map, your home insurance policy should cover enough to entirely rebuild and furnish your home. Ask a home builder to walk through your home and give you an estimate of what it would take to rebuild; that figure should be the basis for how much replacement coverage you'll need. Remember to note all the expensive/unique details that would drive up the replacement cost. After you know your home's replacement cost, you choose the type of coverage.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
If something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged, liability coverage protects you.
What will it cost?
Depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors, the cost of your home insurance policy will vary. Generally speaking, more coverage means more cost.
The amount which you are required to pay against the full cost of the damage or repairs is called the deductible. The deductible amount can be chosen at the time you purchase your insurance policy. As a rule of thumb, your monthly premiums are lower with a higher deductible. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
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