Owning a home may be your biggest investment, so how can you protect it? Well, home insurance is a form of property insurance that you can purchase to protect your property and your belongings.
Do I need home Insurance?
Before we get into the nitty gritty of all your home insurance questions, let’s start off by saying we strongly recommend that you have home insurance, simply for all the value it offers — even if home insurance isn’t mandated by law the same way that car insurance is. Keep in mind that if you’re looking to purchase a home, or if you’re a homeowner that has applied for a mortgage, your lender will likely require you to purchase home insurance first anyways. Having home insurance can protect you from having to pay a large lump sum to repair damages to your property and personal belongings if something happens to or in your home. So, although home insurance isn’t necessarily a requirement, it definitely plays a crucial role in protecting what may be your greatest asset.
What does home insurance cover?
Home insurance covers expenses that occur when something unexpected or accidental happens to your home and/or your belongings. That means that you’ll receive financial protection against losses due to theft, fire, wind damage and much more. Should anything happen to your home, your standard policy can include coverage for the structure of your home, coverage for your personal belongings, and coverage for additional living expenses (if you’re unable to live in your home while it’s being repaired due to a covered loss). Home insurance also covers more than just your home. It can also come to the rescue if someone injures themselves on your property, or if you damage someone else’s property or accidentally injure someone. This is where your liability protection will kick in which is also typically included in a standard policy.
Let’s take a look at a couple of examples of what you’re generally covered for. Let’s say you become a victim to theft and some of your big-ticket personal belongings are stolen. Depending on how your policy is set up, your home insurance will provide you with coverage based on either the Replacement Cost or the Actual Cash Value of your stolen items (subject to your deductible, of course). Or, let’s say you experience a loss due to fire — your home insurance will cover the repair, the reconstruction or the replacement of your home, depending on the extent of the damages and your coverage limits.
Are there different types of home insurance?
Although different insurers may have different names for their coverages, here are a couple of types/tiers of home insurance to consider:
1. Comprehensive form: This is the highest tier of home insurance and the most common of the three. Comprehensive (also referred to as “all risk”) coverage covers your home and belongings from all loss, with the exception of some exclusions which will be directly listed on your policy.
2. Broad form: This is the mid-tier level of home insurance which provides more extensive coverage on bigger items such as the building itself and will provide basic coverage on other items that are specified on your policy.
3. Basic form: This is the simplest level of insurance coverage offered, in which only certain items listed on your policy are covered and is usually suitable for those with seasonal cottages or camps. This option is cheaper than the two listed above; however, you do carry more financial risk should anything happen to your home.
What’s not covered under home insurance?
While coverage varies from policy to policy, it’s hard to determine the exact extent of what may not be covered. With TD Insurance, our home insurance offerings all follow comprehensive form/all risk coverage, meaning that all risks are covered, with the exception of specific properties and exclusions outlined in your policy. Regardless of who your insurer is, check your policy carefully to understand these exclusions. Should you find something you’d like/need coverage for that’s listed as an exclusion on your policy, you can always check to see whether there is an option to buy additional coverage for it through an add-on. If in doubt, talk to your insurance provider to get the information you need.
Keep in mind that some exclusions are outright, meaning that there are no options to add on coverage to include them in your policy. In these cases, you would be responsible for covering these losses yourself. These exclusions are common to most insurance companies and typically include wear and tear, damage caused by pests (such as rodents or insects) and acts of terrorism, to name a few.
Your policy is also likely to contain specific dollar limits and possible coverage restrictions on certain categories of items, such as jewellery or wine collections. If you have belongings of particularly high-value, you should check these limits and restrictions to ensure you’re properly covered. Should you need additional coverage, check out our Personal Valuables Coverage to learn more.
How do I choose the right coverage for me?
It can be difficult to find the best coverage that fits your needs, especially since there is no one solution that fits all. At TD Insurance, we’re here to help you find the coverage that’s right for you. We offer fully customizable packages that allow you to add extra coverages, ensuring your policy meets all your unique needs. Some examples of our add-on coverages include: earthquake, identity theft and damage due to water entering your home from the outside.
How much will home insurance cost me?
Well, just as how mortgage payments will differ from homeowner to homeowner, so will the cost of home insurance. What you pay for your home insurance premiums will depend on factors like how much coverage you want or even the location of your home, amongst many other factors. And since being a homeowner is already expensive enough, we know you may be considering some cheap home insurance options. But remember, cheaper may not always be better. Get a quote to get a better look at what home insurance costs may look like for you.