Home Insurance

Insurance can ease the loss of a home and possessions in the event of fire, theft, flood, etc.and is a small price to pay considering the replacement value of our possessions and the cost of homes today. Here's some factors to consider when choosing home insurance.

First, it pays to know the basic facts about home insurance. Most people have a package policy that covers not only the home itself including detached structures such as a garage or barn, but also the contents. The contents of the home are protected whether they are in the home or temporarily away from it. For example, if someone steals your mountain bike when you slip into the corner store for a cool drink, it would be covered by home insurance up to the dollar amount specified in your policy and less the deductible. If your notebook computer gets stolen out of your vehicle, your home insurance - not your automobile insurance - would cover the loss.

In the event that someone gets injured on your property and sues you, your home insurance would protect you. The same is true if you accidentally injure someone or cause damage to their property. For example, if a postal delivery person falls and is injured on your icy walkway, home insurance would cover you. Likewise, if you run into another biker on the trail and injure them, your insurance would cover the damages and legal fees to defend you in court. Keep in mind that the limits of liability are established in your policy. If you wish to increase your liability coverage, your insurance company may allow you to do this by increasing your monthly premiums accordingly.

Over the years, an insurance policy may not keep up with changes to the home. If a home undergoes extensive remodeling such as adding an extra room, an expansive deck or a garage, they won't be covered unless you inform your insurance company and adjust your policy. These renovations will not necessarily increase your monthly premiums and in the event of a fire or other misfortune, you'll be compensated. Remodeling can be an expensive undertaking and insurance may be the only way for you to afford to rebuild damaged structures. The following are some other reasons why you may want to adjust your policy.

If you get a dog, you will need to inform your insurance company. Many companies will increase your premium, or not cover you at all, if your dog is on the company's list of bite-prone dogs such as pit bulls, Rottweilers or wolf hybrids. Dog bites cost insurers millions of dollars every year.

In some regions, changes in home construction methods have led to leaks and subsequent mold problems. Often, the problem doesn't show up for years after construction. Some companies exclude mold from their standard policies but offer coverage for mold at an extra premium. If you are concerned about the possibility of mold, call several local companies and compare your options.

If you have purchased luxury items since you first got your policy, you may wish to amend it. Home insurance usually provides coverage up to a few thousand dollars for all of your furs and jewelry. If this is not adequate, you can purchase an additional personal property endorsement or floater to insure them for their appraised value.

Likewise, if you make a large purchase such as a home entertainment unit or a hot tub, ensure that you have adequate coverage. Insurance companies may need to see receipts for expensive items.

If you have joined the ranks of the self-employed and work from home, your computer, printer and fax machine are essential to your livelihood and are well worth insuring properly. Most insurance companies will pay you what these items are worth, i.e. the depreciated value, rather than the replacement cost. We all know how quickly computers and other electronics become obsolete when a new model comes on the market! Extra coverage that provides replacement value may be essential to your work situation.

Another common change in the home is new people coming and going. If you get married or divorced, there will likely be additional or fewer belongings in the house respectively.

If you run a business from your home such as a daycare, you will likely need to increase your liability coverage. If a child trips and gets injured on a coffee table or has an allergic reaction to a food, you may find yourself in financial ruin paying for legal fees and damages. Extra coverage is essential for any businessperson who brings clients into the home.

If you live in an area prone to floods and hurricanes, standard insurance policies may not cover your home and possessions. You may need to purchase special coverage, although, depending on the level of risk in your area, insurance companies may not provide coverage at any price. If that is the case, check whether there are any government programs available in your region.

Homeowners who never before needed to be particularly concerned about forest fires, floods, mudslides, hurricanes, etc., are finding themselves at risk due to changing weather patterns in recent years. Take a look at your coverage and consider upgrading it if possible.

As they say, hindsight is 20/20 and most people who have experienced a calamity such as a flood or theft often wish they had had more coverage rather than less. Shop around for good rates and speak to your insurance representative to discover how to best protect your property.

Bruce Witchel, Real Estate Agent
Mississauga, ON,
(416) 948-2435