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.
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:
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.
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.
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.
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 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.
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.
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.
There are several actions that you can take to potentially reduce the cost of your home insurance, including:
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.
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.