Definition of Homeowners Insurance
Homeowners insurance, or home insurance, covers the homeowner against various risks such as fire, theft, some forms of water damage, and many others. Home insurance can help you rebuild or restore a part of your home that is damaged, replace valuables and belongings that have been stolen, and cover liability costs if a visitor injures themselves on your property.
Understanding Homeowners Insurance
Every home insurance policy is different. If you want the best coverage, your broker will usually recommend comprehensive coverage, which covers the building and contents against all risks, except those that are excluded in the policy. Homeowners looking to save money on premiums can ask for a basic or named perils policy, which only covers specific named risks. In this case, the homeowner should be prepared to pay for items that aren’t specifically covered in the policy.
Broad coverage is a compromise between a basic policy and a comprehensive policy, and usually includes comprehensive coverage on the home itself and named perils coverage on contents. When it comes to protecting your home and your possessions, comprehensive coverage is nearly always the best coverage available and is worth paying a little extra for.
Understanding Your Home Insurance Policy
When you get your home insurance renewed, you will usually be sent a copy of your policy. Take the time to read through it and contact your broker to make sure that all of the original items you wanted to be covered for when you initially took out the policy are still present. If you see anything at all that you have questions about, contact your broker for help.
Even a comprehensive insurance policy may not cover everything you want. If you have an expensive set of cookware, fine jewelry, or more electronics than your contents insurance allows, you may need to purchase additional coverage to ensure that these items are covered under your policy. Additional coverage on a homeowners policy is usually called an “endorsement” or a “rider”.
Weather and Homeowners Insurance
Severe weather patterns across Canada, and particularly in Alberta, have been responsible for a gradual rise in home insurance premiums. How much your own premium is affected depends on your location. If homes in a specific area have had the same kind of damage in roughly the same time period that has been claimed on home insurance, insurers will usually raise premiums for that specific neighbourhood. It is important to note that there is no accidental flooding coverage currently in place in Canada, and many forms of water damage require extra riders added to the policy in order to get coverage.
Renovations and Upgrades
It’s important to contact your broker after making any renovations or upgrades to your home. Items like a new furnace may lower your premium, while items like a wood stove may increase it. You’ll also want to make sure any new appliances or renovations are included in your home’s replacement cost and contents coverage. While most policies have a set amount for contents coverage, a new purchase may require additional endorsements for coverage if it goes over the set amount for your home contents.