August 30th 2021
Your Home Insurance Questions Answered
For millions of homeowning Canadians, home insurance is one of the vital necessities of owning a home. Home insurance helps protect millions of homes each year and offers a lot of protection in emergencies. Anything from damage, loss, theft, even covering hotel/ rent costs if you must temporarily leave your home, home insurance can cover it all! However, home insurance can be hard to navigate and can often be expensive or have you paying too much for the wrong type of coverage.
This article will address a couple of the most popular questions about home insurance. Hopefully, more Canadians can understand the importance of home insurance by answering these questions so more Canadians can take advantage of the benefits.
What Is and Isn't Covered by Home Insurance?
When you first apply for home insurance, you will 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 are on the list, your insurance covers them. However, some claims can be a bit trickier than others. Even though "water damage" might be outlined in your policy, it is often implied that it is sudden or accidental damage, so if a pipe bursts in your house, flooding your basement, you would be covered. Still, if the flooding happens because of a natural disaster, you will most likely be not covered unless 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, and other things.
Once an insurance company assesses your home, they will 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. Discerning the difference between expected and unexpected is vital because all expected events are not covered and can not be covered by an insurance policy.
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 agreed 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. Depending on the size and layout of your house, not forgetting the contents as well, the insurance provider would determine the total number of replacement costs and charge your premium accordingly.
The age of your house also plays a factor in determining the price of your premium. The age of your roof and your pipes can affect your premium because if it's older and more prone to cracking and leaks, your premium will rise. Old heating can also increase your premium rate as more old and archaic heaters are prone to fire hazards. What kind of electricity can also change your premium, whether you use breakers or fuses in your home, and the actual wiring of your house affects your insurance premium. Even if you have a pool, trampoline, or other structures on your property can affect the insurance.
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 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 system. 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 constitutes its price, you can now 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 live agents to help you look for these factors when searching for a home. By consulting an expert, you can find the best combination of your dream home and your dream price by reducing the amount you'll pay overall. Now you have the tools to march forward into the housing market and get a home insurance quote that will land you in a good spot for you and your family's future.
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