Home Insurance Tips: Security Where It Matters Most
If you’re like most Canadians, your home your single most valuable asset. You work for years to pay off a mortgage and probably put in a lot of “sweat equity” on evenings and weekends painting, fixing, cleaning.
So, from a financial perspective, your home is incredibly important. But people also place a deep spiritual value in their home. This is the place where your kids grow up, where you host family holidays – where all of the great memories of your life are made. In light of the tremendous importance of the home, many people get slightly nervous thinking about all the threats the home could face: fires, natural disasters, burglaries and vandalism.
But with a little help and advice, it isn’t really that bad to walk through the risks and the many ways that sound insurance protection can cover these risks and keep your family secure. Once you have a grip on the facts and once you can make a solid plan based on those facts, the better you will feel about risk.
Homeowners Insurance: The Basic Coverage
While there’s a wide range of insurance policies available to cover your home – at prices to suit every budget and degree of risk aversion – there are some basic provisions that are general to pretty much any policy that you might get.
Homeowners insurance typically covers three basic risks: damage to the structure of the home, damage or loss to your personal belongings in the home, and living costs during repair/rebuilding.
The heart of the policy, of course, is the section that treats the coverage for damage to the structure of your home. You can opt for more expensive policies that cover a much wider range of risks, but generally homeowners policies cover loss from fire or lightning, wind or hail, explosions, damage caused by aircraft or automobiles, vandalism, theft and the damage caused by break-ins, damage to the roof caused by the weight of snow, sleet or rain, and flooding caused by ruptured plumbing, among other basic risks.
Another basic component is the coverage for your personal effects. Typically, your policy will cap the dollar value for all personal effects at 50 – 70% of the insured value of the structure of the home. However, the coverage typically extends to losses incurred anywhere – even away from home.
The insurance you take out on personal effects is an area where you are especially advised to get some professional assistance and think things through. By paying for an extra rider on the policy, you can cover items of special value – like jewelry, art or silverware – up to the items’ appraised value. It is important to know the value of these kinds of items, to be able to substantiate that value through appraisals and photographs and to make sure that you have taken out the right amount of insurance. In this context, the appraisal is very important.
Typically, the mistake homeowners make is to under-insure their valuables. However, it is occasionally the case that homeowners have a mistakenly high sense of the value of some of their possessions and pay a needlessly high premium. Your personal property will typically be protected against the same kinds of casualty loss covered in the structural provisions, and also against theft.
Finally, a basic policy will probably also cover your living expenses while your house is being repaired or rebuilt after a loss.
The basic homeowner’s policy will also protect against liability. As the owner of the premises, you face liability for hazardous conditions that could cause injury to guests or visitors to your home and grounds.
The liability portion of the policy will protect you if you are found liable for an injury (for example, to a visitor to your home who slips and falls) caused by negligent maintenance of your home. This liability coverage extends to bodily injury and also to property damage. For example, if someone is injured on your property, her medical bills could be covered. The liability coverage typically extends to damage caused by your pets as well.
As in most of the other coverage areas, it is important to be aware of the policy limits. You can typically purchase additional liability insurance – with broader coverage and higher limits – and this is an area where it can be very helpful to have professional advice.
You want to make sure that you are appropriately covered but at the same time, you do not want to spend more on insurance than is warranted in your situation.
Levels of Coverage: Addressing the Loss
As in most other areas of insurance, there are plenty of options available, from basic coverage to more secure coverage at a higher price. And as in these other areas, it pays to be fully informed and to get professional advice if you do not feel comfortable making decisions on your own.
What About the Things That Aren’t Covered?
You need to be very clear about what risks are not covered by the typical homeowner’s policy so that you can cover those risks in other ways. Homeowners insurance can be a bit nerve-racking to think about, but with a little help, the brokers and CSRs at DPM Insurance Group can make sense of it with you and help you feel confident that you are protected.
Call us today and let’s get started, or request a free, no obligation home insurance quote. Click here to contact one of our six offices in Chatham-Kent and Windsor-Essex.
Source: Kin Insurance