Most people who know me know that I am not a gambling type, which goes hand-in-hand with my belief of having good homeowners insurance. So when some neighbors of mine decided to relocate to Canada and buy a home, we wondered which insurance company they should use. I found a J.D. Power and Associates report from 2010 that listed La Capitale General Insurance as the highest ranked home insurance provider in Canada. Now that the future Canadians know where to begin getting homeowners insurance quotes, they also need to be armed with enough information to choose the right coverage.
Have Enough Coverage
People often don’t have adequate insurance coverage that would cover the cost to rebuild the house if it were destroyed. Combine that with the fact that property values have been increasing in Canada since 2008, and it becomes even more important to have enough coverage.
Covering the mortgage doesn’t cut it. If the mortgage represents only 80 or even 90 percent of the house, it’s not enough coverage. It’s especially not enough if the house has appreciated or if you’ve made improvements. What you should insure is the cost to rebuild. Contact a professional who rebuilds homes in your area to determine the real figure you should use when determining how much insurance coverage to buy.
Don’t Forget Your Belongings
Insuring what’s inside the home — your personal belongings — could be extra. You typically choose between replacement cost coverage or cash value. The first pays you enough to replace the items destroyed. The second pays only what the items are worth in today’s market considering depreciation. If your policy covers belongings but the limits are too low, you can buy extra insurance, typically called floaters or riders, which would cover your belongings.
Know What Your Policy Covers and What it Doesn’t
- Flooding: Although flooding occurs in Canada — it’s the most frequent type of natural hazard — it’s not covered on homeowners insurance policies, and Canadians can’t buy private flood insurance. The bigger insurers offer better water protection than others do, such as from sewer backups, so that’s something to discuss with an insurance agent.
- Wear and Tear: Find out what you need to do regarding maintenance. Your insurance provider might not cover water damage if you never repaired or replaced your roof in 30 years, for example.
- Frozen Pipes: Check to find out what you are responsible for doing, such as shutting off the water if you will be gone for more than four days in winter, and when your insurance would cover damage caused by the freeze.
Protecting what is likely your largest investment is too important not to take seriously. Please share what you learned with a friend or loved one.