Buying a home is likely one of the biggest investments you will make in your life. Whether you opt for a condo, single-family dwelling or townhouse, you’re going to want an extensive insurance policy to protect your greatest asset. Although home insurance is not mandatory in Ontario, if you are applying for a mortgage it is likely a requirement set forth by your broker. There is plenty that can go wrong when it comes to owning a home, and this type of insurance is not a one-size-fits-all solution.
The right coverage will likely go beyond the basics, and we have compiled a list of items your home insurance plan should cover:
Property Damage
No matter the type of property you own, exterior and interior damage can come in all shapes and sizes. From natural disasters to leaky pipes, a lot can go wrong when it comes to your home. Your insurance policy should spell out the types of perils you are protected against, and the ones that are omitted will have to be dealt with out of pocket. This can include regular wear and tear, like needing a new roof, or pest damage caused by rodents. Check with your insurance company to determine what types of damages your home is protected from, and review the likely dangers in your area to decide if you require further coverage. Don’t forget to consider additional structures on your property such as a detached garage or shed.
Loss or Theft of Contents
Within your home, your possessions such as electronics, clothing, and furniture should be covered under your insurance policy. Just like property damage, unforeseen circumstances like a fire can ruin your belongings. There is also the possibility of theft or vandalism in the event someone breaks into your home. Each insurer sets its own policy and limits when it comes to covering costs of replacement for these items, so be sure you are comfortable with the value that is quoted. You might also consider purchasing additional coverage for expensive pieces such as jewellery or art.
Personal Liability
In addition to the interior, exterior, and contents of your home, there is one more variable to consider with home insurance coverage: yourself. As a homeowner, you are responsible for keeping your residence safe. But, there is always the chance someone could be injured on your property, whereby you could be liable for legal and medical costs. This type of coverage can also cover lawsuits resulting from damages you cause negligently to someone else’s property and is worth reviewing to ensure you have an adequate policy in place.
Additional Living Expenses
If you are unable to live in your home due to extensive damage from an insured peril (i.e. fire, wind, sewer backup, or otherwise), this type of coverage will reimburse you for the living expenses required to stay in a hotel or home rental. You may also be reimbursed for a partial amount of the meals you eat in restaurants, depending on the relative costs of your grocery bill. Although it would be a catastrophic event, it is important your insurance policy covers additional living spaces if something were to render your home unlivable.
Replacement and Reimbursement
You have a choice between replacement value and actual cash value for reimbursement claims filed under your home insurance plan. The differences are as follows:
- Replacement value means the home insurance plan will replace the damaged goods with a new item similar to the one lost. This can include rebuilding an entire home or replacement of a single-window damaged by kids playing street hockey.
- Actual cash value is not as desirable as replacement value, as reimbursement factors into the depreciation of each item. For example, a 20-year-old building that is completely destroyed by fire will not receive as much reimbursement as a five-year-old building if they are of a similar size and layout.
Your home insurance plan should factor in these details in order to make it easier to get your life back on track following a disastrous circumstance. At Rowat Insurance, we will work with you through every step of your home insurance plan to ensure you understand your coverage and provide solutions if you feel you need more. Contact us today to learn more about our plans.