Mortgage companies in Canada require you to buy home insurance to cover the balance of your mortgage should your home need to be replaced or repaired due to fire or other damage. Here are some tips to help you find home insurance that is right for your family and you.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
A home insurance policy covers the cost of replacing your home and things in it, in the event of fire, damage or theft. Your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home, is also covered.
A comprehensive home insurance policy covers your home for all risks; other than those which insurance policies do not normally cover, such as natural disasters.
Basic home insurance only covers the specific perils that are set out in the policy. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. Broad home insurance is a mix of comprehensive insurance and basic insurance policies.
How much coverage is necessary?
If your home were wiped off the map, your home insurance policy should cover enough to entirely rebuild and furnish your home. A home builder can estimate what it would take to rebuild by doing a walk through of your home; that figure should be the basis for how much replacement coverage you'll need. Be sure to point out any unique and/or expensive details that would add to the replacement cost. After you know your home's replacement cost, you choose the type of coverage.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
Last, liability coverage protects you in case something takes place on your property that would make you financially responsible, such as if someone's belongings were damaged or if they were injured on your property.
What does it cost?
The cost of your home insurance policy varies depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors. Generally speaking, more coverage means more cost.
A deductible is how much you must pay against the entire cost of any repairs or damage claimed. When you purchase your insurance policy, you can choose to raise or lower your deductible. Generally, the higher deductible you choose, the lower your monthly premiums will be. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
A home insurance policy covers the cost of replacing your home and things in it, in the event of fire, damage or theft. Your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home, is also covered.
A comprehensive home insurance policy covers your home for all risks; other than those which insurance policies do not normally cover, such as natural disasters.
Basic home insurance only covers the specific perils that are set out in the policy. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. Broad home insurance is a mix of comprehensive insurance and basic insurance policies.
How much coverage is necessary?
If your home were wiped off the map, your home insurance policy should cover enough to entirely rebuild and furnish your home. A home builder can estimate what it would take to rebuild by doing a walk through of your home; that figure should be the basis for how much replacement coverage you'll need. Be sure to point out any unique and/or expensive details that would add to the replacement cost. After you know your home's replacement cost, you choose the type of coverage.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
Last, liability coverage protects you in case something takes place on your property that would make you financially responsible, such as if someone's belongings were damaged or if they were injured on your property.
What does it cost?
The cost of your home insurance policy varies depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors. Generally speaking, more coverage means more cost.
A deductible is how much you must pay against the entire cost of any repairs or damage claimed. When you purchase your insurance policy, you can choose to raise or lower your deductible. Generally, the higher deductible you choose, the lower your monthly premiums will be. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
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