Choosing the right home insurance coverage is crucial to ensure your home and belongings are protected from extreme weather, fire, theft, and other potential risks. Below are answers to Canada’s top ten most-asked home insurance questions. Read on to learn more about what home insurance covers, what to do if you have a claim, and more.
“What does home insurance cover?”
Home insurance policies cover a wide variety of potential damage to your home and personal property if the damage results from a loss that’s covered by your policy. These policies also protect you against lawsuits for injury or property damage that you cause to others. In cases of injury to others, this could include medical expenses.
Depending on your policy, home insurance may cover:
- Fire damage
- Flooding or water damage
- Vermin damage, including termites, raccoons, squirrels, and other rodents. Note: Vermin coverage may not be available from every insurance provider
- Damage from extreme weather, such as storms or tornadoes
- Structural damage due to falling trees or other objects
- Loss of personal property from theft or burglary, including jewelry and electronics
- Repairs to appliances, such as furnaces and water heaters, caused by an insured loss. Note: appliance maintenance and standard repairs are not covered by home insurance
“Is home insurance mandatory in Ontario or other provinces?”
Having home insurance for your condo, townhouse, or detached house is not a legal requirement in Canada. However, if you have a mortgage, you will need insurance for your lender to approve your home loan. If you are a tenant, most landlords will require you to have coverage before you move in to protect your personal property.
Our expert insurance advisors are here to help.
“When should I change my home insurance provider?”
If you plan to switch home insurance providers and wish to avoid a penalty, you should do so during the policy renewal period. As with any contract, if you change home insurance providers mid-policy, you will owe your insurance company the earned premium for the time the policy was in effect, along with a cancellation fee to cover administration costs.
To switch providers smoothly without a penalty, notify your broker before your renewal date arrives so that they can manage the process for you.
“How do home insurance claims work?”
If you have a home insurance claim, you should notify your broker immediately. They will report it to your insurance provider on your behalf, and a claims adjuster will be assigned to assess your loss.
Your home insurance claims record is attached to you, not to the specific property where the claim occurred. If you move to a new home, your claims history from your previous home will follow you to your next residence and follow you if you switch insurance providers.
Home insurance claims remain part of your record for life. However, any claims you make will typically only affect your rates for about five years, although this timeframe can vary by insurance provider.
“Do you pay home insurance monthly or yearly?”
Home insurance premiums can be paid on a monthly or yearly basis, depending on the insurance provider. Other payment plan formats may also be available, and premiums can often be paid by credit card through automatic preauthorized payment.
“When do I need home insurance when buying a house?”
When buying a home, you will need to purchase home insurance before you close on the house.
Generally, it’s best to contact your broker as soon as you can so they can source the best home insurance option for your specific property and location.
“When should I cancel my home insurance when selling a house?”
You should cancel your home insurance policy once the sale of the home has closed. Often, your insurance can be transferred to the new home you’ve purchased.
“What factors determine the cost of home insurance?”
The average cost of home insurance varies across Canada. Whether you pay per year or month, home insurance rates are determined by various factors unique to you and your property. Your claims history over the past five years, as well as the value of your home, environmental risks of your geographic area, and coverages you wish to purchase, will all influence your rates.
“What can I do to lower my home insurance costs?”
There are several actions that you can take to potentially reduce the cost of your home insurance, including:
- Talking to your Cowan broker about combining your home and automobile insurance
- Proactively maintaining your home to avoid future claims, such as getting a new roof or upgrading your plumbing
- Using a sump pump; ensure that the sump is free of debris and install a battery backup
- Installing an alarm system or home security camera system
- Increasing your policy deductible
“Do I need additional coverage for my home-based business?”
If you operate a business from home, you will need business insurance in addition to your home insurance. Business owners should make sure that they have the right coverage. Home-based businesses expose the business owner to additional risks that are not covered by a home insurance policy, such as cyber risk and business liability. Note: Coverage for home daycares providing care for six or fewer children can be added to home insurance, and will not require business insurance.
Answering your home insurance questions
Do you have more questions about home insurance? Our Cowan experts are available to provide more answers, along with custom coverage options tailored to your needs.
