Home Insurance

Do I need home insurance?

If you are a homeowner, you are probably well aware of how important it is to have the house insured. From fire to burglary, there are dozens of dangers that threaten your house every day and having good insurance can give you peace of mind.

Depending on the coverage, home insurance will reimburse you for the loss of your home and belongings due to an accident or theft. No matter how careful you are, accidents do happen and insurance can help relieve the financial sting.

Even those who don’t own their own house would be wise to look into home insurance. Renters and condominium owners are also in danger of losing everything if they don’t have good coverage.

What kinds of coverage are available?

Everything from your fine china to the lawn tractor can be covered under some insurance policies. Others provide coverage only on the building itself. It’s important to know what kind of policy you have and what it covers if an accident should happen.

There are three basic types of home insurance:

Comprehensive coverage applies to both the building and its contents (excluding items named specifically in the policy).
A basic or named perils policy covers your property only against dangers that are named in the policy, such as fire, earthquake or flood.
A broad policy provides comprehensive policy on the building, and named perils on the goods inside. It is usually cheaper than a comprehensive policy.

What is a named perils policy?

Named perils policies are designed to cover accidental damages to your house. Policies can be bought for fire, explosion, water damage, theft, hail and electrical current.

Additional coverage can be bought for perils not normally covered in a home insurance policy. Theses include earthquake, sewer back up and furnace oil spills.

What about renters insurance?

Landlords are not responsible for the possessions of a tenant. If you’re renting an apartment or living in a condominium, it’s a good idea to get insurance. Even though it may not look like you have a lot of valuable belongings, the cost of replacing stolen or damaged goods could be quite high.

Renters and condominium owners can get coverage for both the contents of the apartment and for any improvements they have made.

Can I insure my cottage?

Cottages are a great place to relax and get away from it all. Many people consider their cottage a home away from home and should consider insuring it in the same manner.

Cottages can be covered within a house insurance policy or separately. However, there are a few differences between cottage insurance and home insurance. For example: according to the Insurance Bureau of Canada Web site, burglary can be covered, but not theft. This means that the owner must prove there was forcible entry in order to file a claim. Also, in winter, collapse of a roof due to the weight of accumulated snow will not be covered.

What about jewelry and other valuables?

Insurance can also be purchased for valuable items inside the house that are not always covered in a home insurance policy. Things like fine furs, jewelry and computers can be covered by added insurance.

How much will the insurance cost?

There are a number of different factors to consider when figuring out how much your home insurance will cost.

The policy itself makes a big difference in the price. A comprehensive policy will cost the most, but it will provide the most coverage. A named perils policy costs less but may not cover all the damages you could suffer in an accident.
Discounts may be available for homeowners who have installed smoke alarms, sprinkler systems or monitored burglar alarms.
Some insurance companies also offer discounts to customers as a reward if they have had a long relationship with the insurance company. Seniors or members of certain organizations may also be eligible for a discount.
The deductible your policy carries may also affect the price of coverage. House insurance deductibles can run anywhere from $200 to $5,000. The higher your deductible, the lower your premium.
The larger the risk your property carries, the more expensive it will be to cover. Rates can go up depending on the age of the house or if it has a wood stove or an underground oil tank. Location is also a factor. Building a house right under Mount St. Helen’s or on the San Andreas fault-line may increase the cost of coverage, as might a high crime rate in the neighborhood.
How many previous claims you have made may also have an impact on the price of home insurance. If your house has been broken into 15 times, you may find it quite expensive, or even impossible, to get the same coverage. However, if you have no claims in 3 to 5 years you may qualify for a discount.

One of the most important things to remember is not to under insure or over insure your house. If you are under insured, you could be out a lot of money should your property be damaged. Being over insured will cost more and won’t really make a difference in the coverage — you will not be able to claim more than the value of your property, no matter how much coverage you carry.

Do I know what I own?

If your insurance plan covers the contents of your home from theft or damage, it is a good idea to keep an up-to-date list of everything you own. A good way to do this is to videotape the contents of every room, including things stored inside furniture, jewelry boxes and closets. If you have a written list of your contents, make sure you include any identifying marks, such as a serial number. It may be a good idea to keep all the receipts of major purchases with this inventory.

Note: do not keep this list in the house. It will do you no good if your house burns down, taking everything with it. Keep the list at the office or stash it at the home of a friend or relative. You can even put it in a water-tight container and bury it in the yard if you want. Just remember where you put it.

Elliott Insurance Services Ltd.