Your home is your most prized asset. With severe weather on the rise across the country, it’s more important than ever that homeowners review their insurance coverage.
Home Insurance
Understanding Home Insurance
Types of Home Insurance Policies You Can Buy and What They Cover
There are several types of insurance polices you can purchase. Please remember that the wording and what is covered may vary within these general categories from one insurance company to another. Trade names may also be used.
Comprehensive
This is the most inclusive home insurance policy; it covers both the building and its contents for all risks, except for those specifically excluded. There are two types of insurance risks that are not normally included in any home insurance policy – those for which you can buy insurance (“optional coverage”) and those for which insurance is not available (“uninsurable peril”).
Basic/Named Perils
If you are looking to save money by carrying the financial risk of some losses yourself, you may wish to consider a named perils policy that covers only those perils that are specifically stated in the policy.
Broad
If the comprehensive policy costs more than you want to pay and the named perils policy seems too risky, a mid-priced compromise is the broad insurance policy. This policy provides comprehensive coverage on the big-ticket items like the building and named perils coverage on the contents.
Making Sure You Have the Right Coverage
Having the right home insurance isn’t just about choosing a policy—it’s about understanding the value of your home and everything inside it. Taking time to review your property’s features, rebuilding costs, and personal belongings can help ensure your coverage keeps pace with changes to your home and lifestyle.
Know Your Home
Quick – in what year was your house built? What type of foundation do you have? These are the types of details your insurance provider needs to know in order to calculate the replacement cost of your home and make sure you have the right coverage.
The home assessment checklist will help you and your broker or agent get the correct information.
Talk To a Professional
Your insurance professional can help you calculate the right rebuilding value based on the details you provide about your home. You may also wish to hire a professional appraiser.
Take Stock of Your Stuff
A complete inventory of your belongings will help you get the right coverage and make it easier to file a claim. Click here to complete a room-by-room inventory of your possessions.
Frequently Asked Questions
Replacement cost is the estimated amount required to rebuild your home if it is destroyed by a covered loss.
his amount may include construction costs, labour, debris removal, and expenses related to meeting current building codes. Because rebuilding costs can change over time, it is important to review your coverage regularly.
Replacement cost reflects the cost to rebuild your home, while resale value reflects what your property may sell for on the market.
Resale value is influenced by factors such as location, land value, and local real estate conditions. These factors may have little connection to the actual cost of rebuilding your home after a loss.
Regularly reviewing your coverage and reporting significant renovations can help ensure your insurance remains up to date.
Renovations can increase the value and replacement cost of your home. If your insurer is not aware of the changes, you may not have adequate coverage.
It is important to discuss renovations with your insurance representative before or during the project to ensure your policy reflects the updated value of your home.
Many home insurance policies provide coverage for personal belongings, including electronics and home entertainment equipment.
However, coverage limits and conditions vary by policy. If you have purchased high-value items, speak with your insurance representative to confirm that you have appropriate coverage.
The cost to rebuild a home can exceed its purchase price for several reasons, including:
- Renovations and upgrades made over time
- Increased labour and material costs
- Demolition and site preparation expenses
- Requirements to meet current building codes
- Higher construction costs following major events such as wildfires or severe storms
Replacement cost is based on rebuilding the home, not what it would sell for on the market.
Let’s Find the Right Coverage for Your Home
From rebuilding costs and personal belongings to optional coverages and policy limits, we’ll help you understand your options and choose protection that gives you peace of mind.