Your Trusted Guide to Home Insurance in Real Estate Canada

Posted On October 6, 2023

Congratulations! You are the proud owner of a property in Canada. And it is likely to be one of the most valuable assets you own. Keeping it safe and protected naturally becomes the next step of your homeownership journey. Let us help you understand more about home insurance in Real Estate Canada so that you can decide on the best coverage options.

The Basics First

Think of home insurance as a friendly guardian for your home and everything inside, protecting you from unexpected troubles like fire or theft.

It’s not a legal must-have aspect of homeownership but an intelligent way to shield your most valuable asset. Additionally, if you have a mortgage, your lender will likely ask for it to safeguard their investment in your property.

In Canada, you’ve got some basic options when it comes to home insurance:

Basic: This is your budget-friendly insurance choice. It covers only specific risks, the ones that have names. It’s basic but better than nothing.

Broad: This policy is more generous and protects against a wider range of problems. Unfortunately, your personal articles get coverage only for named issues.

Comprehensive: The superhero of home insurance, the comprehensive policy covers almost everything – your home and its contents – except for a few special omissions like sewer backups and earthquakes. Of course, the protection costs a bit more, but it offers top-notch security.

Personal Liability: This is your safety net for unforeseen things that may happen on your property, like someone slipping and getting hurt. It keeps you covered if someone decides to take legal action against you.

Comprehensive Home Insurance

Comprehensive home insurance is the most common type of coverage for homeowners in Canada. It provides extensive protection for your property and personal belongings from a wide range of risks, with the exception of specific exclusions listed in your policy. This type of insurance is designed to give homeowners peace of mind by offering the most complete coverage possible.

What Does It Cover?

Comprehensive home insurance covers a wide range of risks and provides extensive protection for your property and belongings. The coverage includes protection for the buildings on your property, such as your house, garage, shed, and personal belongings. It covers risks like fire, theft, vandalism, and certain natural disasters, ensuring you’re financially protected in unexpected events.

Here are some of the critical coverage areas included in a comprehensive policy:

Dwelling Coverage

Dwelling coverage is the cornerstone of comprehensive home insurance. It protects the physical structure of your home, including the walls, roof, and foundation, from a range of perils. This coverage ensures that you’re financially protected in case of damage to your home caused by fire, storms, or other covered events.

Other Structures Coverage

Apart from your primary dwelling, comprehensive home insurance covers additional structures on your property, including garages, sheds, and fences. This coverage offers financial protection in case of damage to these structures caused by covered perils.

Personal Belongings Coverage

Comprehensive home insurance includes coverage for your personal belongings, such as furniture, appliances, clothing, and electronics. This coverage protects your possessions from various risks.

Additional Living Expenses Coverage

If your home is termed uninhabitable due to a covered event, comprehensive home insurance will cover the living expenses you incur while your home is being repaired or rebuilt. This can include costs for temporary accommodation, meals, and other necessary expenses.

Personal Liability Coverage

Comprehensive home insurance also includes personal liability coverage, which protects you in case you’re found legally responsible for injuries to anyone or damage to their property. This coverage can help cover costs associated with a liability claim, such as legal expenses, medical bills, etc.

Medical Payments Coverage

Medical payments coverage, also known as voluntary medical payments, provides coverage for medical expenses if someone is injured on your property, regardless of who is at fault. This coverage can help cover medical bills, ambulance fees, and other related costs.

Voluntary Property Damage Coverage

Voluntary property damage coverage protects you if you accidentally damage someone else’s property. Whether it’s a broken window or a damaged fence, this coverage can help cover the costs of repairs or replacements.

Additional Coverage Options

Comprehensive home insurance policies often offer additional coverage options, also known as endorsements, that allow you to customize your policy to meet your specific requirements. Some standard additional coverage options include protection against sewer backups, flooding from overland water, and earthquake damage.

Exclusions in Comprehensive Home Insurance

While comprehensive home insurance provides extensive coverage, this policy does not cover some exclusions. You must be aware of these exclusions to ensure that you have appropriate coverage for your specific needs.

Here are some standard exclusions in comprehensive home insurance policies:

• Wear and tear: Comprehensive home insurance does not cover your property’s regular wear and tear or its components. This includes things like aging roofs, plumbing systems, and appliances.
• Mould damage: Typically, it does not cover damage caused by mould growth, as it is considered a result of poor maintenance or neglect.
• Frozen pipes: If the pipes in your home freeze and burst due to inadequate maintenance or failure to take preventative measures, the resulting damage may not be covered.
• Intentional damage: Deliberate acts that cause damage to your property, such as vandalism or arson, are generally not covered.
• Pollution: Typically, it does not cover damage caused by pollution, including contamination of the soil, air, or water on your property.

Review your policy carefully and discuss any specific concerns or questions with your insurance provider to ensure you clearly understand what is and isn’t covered.

How Much Does Comprehensive Home Insurance Cost?

The cost of comprehensive home insurance depends on various factors, including the value of your home, the location, the age of the property, and your claims history. While comprehensive coverage is generally more expensive than basic coverage, the added peace of mind and extensive protection make it a worthwhile investment.

To get an accurate estimate of the cost of comprehensive home insurance for your home, it’s best to contact several insurance providers directly and request quotes. They will consider your specific circumstances and provide you with personalized pricing information.

How to Choose the Right Home Insurance Policy

Choosing the right home insurance policy for your home is essential. Here are some factors to consider when selecting a policy:

Coverage Limits

Ensure the policy’s coverage limits are sufficient to protect your home and belongings fully. Consider the value of your property and personal possessions and ensure that your policy provides adequate coverage in case of a total loss.

Deductibles

The deductible is the amount you’ll pay out of pocket before your insurance coverage kicks in. Consider your budget and choose a deductible that you’re comfortable with. Keep in mind that higher deductibles often result in lower insurance premiums.

Additional Coverage Options

Consider any additional coverage options that may be important to you. For example, if you live in an area prone to flooding or sewer backups, you may want to add these endorsements to your policy.

Insurance Provider Reputation

Research the insurance provider’s reputation and financial stability. Read customer reviews and check their financial ratings to ensure you choose a reliable and trustworthy company.

Discounts and Bundling Options

Inquire about any discounts or bundling options available to you. Some insurance companies may offer discounts for installing security systems or bundling multiple policies, such as home and auto insurance.

Customer Service and Claims Process

Consider the quality of customer service and the claims process offered by the insurance provider. Look for a company with a reputation for excellent customer service and a straightforward claims process.

For Total Peace of Mind

Comprehensive home insurance provides extensive protection for your Canadian home and belongings. It offers coverage for a wide range of risks, ensuring you’re financially protected in unexpected events. Use a cash flow calculator to help understand the extent of your fiscal limits.

This is an important step for a Canadian homeowner, especially if you are a first-time home buyer. By understanding the coverage options, exclusions, and factors to consider when choosing a policy, you can make an informed decision and find the right comprehensive home insurance coverage for your needs.

Remember to review your policy regularly and update it as necessary to ensure that it continues to meet your evolving needs.

Contact our team at www.savemax.com to get answers and help with any questions about Real Estate Canada.  We would love to assist you.