Your Home Insurance Questions Answered

By Urvee

Home insurance is one of the absolute necessities of owning a property. Every year, home insurance helps protect millions of property-owning Canadians from accidental damage and emergency-related costs. Anything from water damage to theft (and even hotel costs if you have to temporarily leave your home) is covered by good insurance. 

But finding the right home insurance policy can be complicated and expensive. To help, we’re addressing some of the most popular home insurance questions below.

What is and isn't covered by home insurance? 

When you first apply for home insurance, you’ll be given a homeowners' insurance policy. This policy dictates the terms of your insurance and identifies what will and won't be covered. The policy will outline a list of events or coverages that you agree should be covered. The most common examples are vandalism, theft, fire damage, weather damage, and vehicle damage. These are all relatively straightforward; if they’re on the list, your insurance covers them. 

Some claims can be a bit trickier than others, though. Even if "water damage" is outlined in your policy, it’s often implied that it’s sudden or accidental damage — so if a pipe bursts in your house and floods your basement, you’d be covered, but if flooding happens because of a natural disaster, you’re unlikely to be covered unless expressly specified. 

Another distinction between home insurance policies is expected and unexpected events. 

Unexpected events are similar to the policies mentioned above: natural disasters, sewage backup, weather incidents, theft, or vandalism. Expected events are defined as rusting outside metals on your house, roof tiles eventually failing and falling off your roof, etc. 

Once an insurance company assesses your home, they’ll be able to point out the specific expected versus unexpected claims on your home. From there, you can determine what kind of coverage is best for you, whether it's comprehensive, broad, standard, or no-frills.

What is my home insurance premium — and how can I reduce it? 

Your home insurance premium is the total amount you pay to an insurance company to insure your home. There are several ways to pay your home insurance premium, and you have the option to pay it all at once, fronting the entire cost throughout your stay in your new home. You can pay your insurance premium in increments, either monthly or yearly, or at whatever rate you and your insurance company agree upon. 

How much you pay in home insurance premiums can vary as well. For example, where you choose to live can affect your insurance premium. If you live in a neighborhood with historically high break-ins and theft, or if you live in an area close to a large body of water, you may have to pay more for insurance. 

Speaking of theft and break-ins…another factor that affects your home insurance premium is the total replacement cost of all valuables and goods in your home. Based on the size, layout, and contents of your home, your insurance provider will determine the total replacement cost and determine your premium accordingly.  

The age of your house also plays a factor in determining the price of your premium. If, for example, your roof and your pipes are older and more prone to cracking and leaks, your premium will increase. Old heating can also boost your premium rate as more old and archaic heaters are prone to fire hazards. The type of electricity you use (i.e. breakers or fuses) and the actual wiring of your home can change your premium as well. And if you have a pool, trampoline, or other structures on your property, expect those to affect the insurance rate too.

With all these factors increasing your insurance premium, it's time to talk about what you can do to reduce it. 

You may get cheaper insurance if your home is newer. You can also save on heating, electricity, the roof, the pipes, and others factors mentioned above by buying a newer home. However, not everyone has access to a more recent house, so another way to save on your insurance premium is by making sure your house has a properly working fire alarm. You can also save if you have a security system installed on your property to help reduce the risk of theft. Many insurance providers also offer higher deductibles to reduce the cost of your premium.  

There are certainly more questions about home insurance that can be answered, but these are the most popular and a great place to start. By understanding what home insurance is and what determines its price, you can take conscious steps when touring homes to look for these issues and imagine the insurance cost if you purchase it. 

The best advice when looking at home insurance is to consult an expert and ask questions. At Properly, you can consult local agents to help you look for these factors when searching for a home.