Home insurance is one of the most important requirements in ensuring that any home owner has peace of mind and assurance that no matter what unforeseen factor impacts their property, there will be a level of coverage to help restore the previous condition. That is why virtually every single mortgage lender in Canada requires a legitimate comprehensive home insurance policy to be in place on any property they have a lien on.
Home insurance is generally structured in the form of a package policy covering not only the structure of the building(s), but also the contents. Another important coverage is the liability from a third party injuring themselves on your property and proceeding to sue you. Properties with swimming pools are a source of a surprising number of liability claims, as the presence of the pool considerably increases the probability of a claim against the home owner.
Home Insurance Cannot Cover Everything
Home insurance is not a panacea for all ills, thus it cannot possibly cover you for any and all disasters. It is important that a home owner understand not only what the policy covers, but more importantly what it does not cover. These are exceptions to the coverage and are generally referred to as exclusions. These exclusions may be applicable in case of your negligence, such as if you go off on vacation in the winter and leave insufficient fuel in the heating furnace tank so that the water pipes freeze and burst; or by what is commonly termed "acts of God" which includes the possibility of a flood, storm, or earthquake which damages your property.
Many of these unforeseen problems can be insured with additional policies but with common sense exceptions. If your property is located on an active seismic fault or a flood plain which is regularly inundated, you may find that the cost of obtaining such a policy is completely unaffordable if it is available at all.
Questions You Should Ask Your Home Insurance Agent
In order to fully understand your home insurance policy's coverage and limitations you should always ask your home insurance agent these questions:
- What type of policy do I have and exactly what and who is covered by it?
- What are the exclusions whereby damage and liability is not covered?
- What is my replacement cost, and is it guaranteed?
- What are my policy limits on specific assets such as computers, jewellery, and silverware?
- What storm and water damage coverage does this policy offer?
- What are the types of optional coverage I should consider given the type of property and the location?
- What is my current deductible and how would it impact the premium to increase or decrease that deductible?
- What security, policing, exclusion, and alarm features can be installed on the property to increase protection and bring down the premiums?
- Is the claims service available 24 hours a day including holidays?
Any responsible home owner should be completely cognizant of all aspects of their policy and work with their insurance agent to ensure that the optimal balance of coverage vs. cost is achieved.
