Protecting the investment you’ve made in your home with proper insurance is obvious to most folks, but you might be interested to know somethings your homeowner’s policy covers that you might not be aware of. Here are some of the less obvious protections.
Fallen Trees: If a municipally owned tree, or your neighbour’s tree were to fall on your property and take out the vehicle parked in your driveway, your home insurance may cover it if theirs doesn’t. Your car insurance may also cover this type of damage if you have comprehensive coverage. You can find out if your home insurance policy covers your car parked on your property by speaking with a DPM Insurance Group broker or CSR.
Aircraft hitting your home: No, seriously. While an extremely rare situation, it’s not entirely outside the realm of possibility. And even though one ever considers the rare occurrence of an airplane or helicopter falling from the sky and landing on their home, you can’t discount it entirely. Should this type of freak accident occur, your homeowners’ policy will pay for housing and food while you find a new home, or stay elsewhere while your home is being restored.
Space Debris: Seemingly even less likely than the above scenario, space debris damaging homes does happen from time to time. If a meteor, asteroid, rocket, or pieces of a satellite, as well as any other falling objects, cause damage to your home, it may be insured under your homeowners’ insurance policies. Coverage for such disasters is available, so contact a DPM Insurance Group broker or CSR to find out what your home insurance policy covers.
Volcano Eruptions: Although many of us don’t live near a volcano, you don’t have to live close to one to feel its affects. The Yellow Stone National Park super volcano could have far reaching affects. If a volcano erupts and causes damage to your home, you may be covered. Make sure you check with your insurance advisor to see if you are protected in this rare instance.
Risks of not having home insurance
While home insurance is not mandatory in Canada, few mortgage lenders are going to hold your mortgage without proper insurance on the property. But let’s say you purchased your home with cash, and since you don’t have a mortgage, think about passing on homeowners’ insurance. You might want to consider that you wouldn’t be covered in these far more likely scenarios than those outlined above: fire, lightning, earthquake, flood, hail, hurricane, power outage, tornado, wildfire, winter freeze.
Typical coverage usually covers: Internal and external home structure damage. Damage to assets within the home, such as furniture and personal belongings. Liability protection for injuries to you, your family or guests. Housing expenses experienced when your home gets damaged.
What to expect after you file your claim
Once your claims adjuster has approved the cost of repair, you will be advised of the options for repairs. You will be responsible for paying the deductible applicable to your claim. Your insurer will provide any additional services included in your coverage, such as living expenses if your home is unfit to live in.
What happens if a company cancels my policy or doesn’t renew it?
There are several reasons a company may cancel your policy such as, too many claims, your home is in disrepair or requires significant renovation or failure to pay your premiums. If this has happened to you, it’s important to be proactive and contact your insurance advisor right away to try to rectify the situation. If you have been a customer of the insurance company for a while, loyalty may play a factor. Also, ask your insurance advisor if you could pay a higher rate in order to keep your insurance.
What should I do if I can’t find a company willing to insure me?
Don’t give up. If you work with a DPM Insurance Group broker or CSR, we can help get you quotes from several insurers. Insurance companies evaluate applications differently, so one may insure you, while another may not. We can help simplify this process for you, and you can rest easy knowing you will get the right coverage at the best price possible.
There are essentially countless scenarios in which you leave your vehicle parked and unattended in public places, sometimes for long periods of time. Generally speaking, when you return for your vehicle, it’s in the same condition you left it in. But of course, now and then, people discover that their vehicle has been damaged somehow.
If you’re fortunate, whomever hit your vehicle left a note. If they didn’t, that’s a hit-and-run. Whichever turns out to be your reality – note or no note – here’s some suggestions for how to handle each situation.
Someone hit your parked car but left a note
If you find that your car has been hit while parked, check for a note, with the most common place to leave a note being under the windshield wiper. Hopefully it will contain contact information such as the driver’s full name, phone number, and their licence plate number.
The next step will be to contact the police. Give them with as many details and as much information as possible. Provide the police with the note that was left, show them pictures of the damages, and any witness statements if you have them. Once they have all the information, they will open a case and get in contact with the other driver.
Once the police have been brought up to speed, it’s time to contact with your insurance provider. Give them with the same details and information that you gave the police. At this point, your insurance company will get in contact with the other driver’s insurance company to settle all the details related to your claim.
Someone hit your parked car but didn’t leave a note
While we can hope that most people would leave a note in this situation, hit-and-runs are quite common in Canada. Here’s what we recommend if it happens to you.
Gather as much information and details as you possibly can. The more information you have the better. Document all details surrounding the accident, including:
Where the hit-and-run happened
The date and estimated time of the hit-and-run
The weather conditions
If anyone might have been a witness
Check if there are any video cameras around. Shopping mall or grocery store parking lots might have surveillance. In the event of a hit and run you can ask for a copy of the footage.
Take photos of the damage to your vehicle, any debris left behind, any identifiers of the location, any damage in the surrounding area, such as other cars damaged nearby, tire marks, etc.
Inform the police immediately
If your car is safe to drive, it is recommended that your immediately go to your nearest accident reporting center to file a report. If your car is damaged the point where you are unable to operate it safely, stay put and call the police.
Provide the responding officer with all of the details and photos that you collected. They will most likely assess the scene for any evidence, and try to gather any witness statements if possible. The officer will create an official accident report. Ask for a copy of the accident report for your own records, and insurance claims purposes.
It also important for you to get the name and badge number of the police officer for your reference.
Get in touch with your insurance provider
After any sort of accident, it’s important to contact your insurance provider, especially if the accident is a hit-and-run. Let them know right off the bat that the accident was a hit-and-run, and that an official police report has been filed. Provide them with the exact same details and information that you gave the responding officer. Once they have created their own report, they will assess the situation and do their own internal investigation. From here, your insurance broker will let you know what additional information may be needed.
How can a broker help if someone hit my parked car?
If you have an insurance broker, you have someone in your corner. In the event that you return to your car and find it damaged, you can call your broker/CSR for advice on what to do next. They will walk you through the entire process and offer independent advice.
Your car insurance premium is based on a number of factors, including the type of car you drive, your personal driving record, and where you live among other things. And since the “type” of vehicle you drive is one of the key factors, it shouldn’t surprise you that modifications to your vehicle is something important your insurance provider needs to know about. If you’ve made modifications to your vehicle without informing your insurance carrier, there is a chance you’ve actually violated the terms of your policy and could technically be driving around uninsured.
Why Vehicle Modifications Affect Insurance
There are two key reasons why modifying your vehicle can impact your insurance: It can affect the safety and performance of your vehicle; and, it can affect the overall value of your vehicle.
When applying for insurance you’re required to provide the details about your vehicle’s make and model. This lets the insurance company calculate premiums based on how safe the vehicle is (based on its performance and safety record) as well as allowing them to estimate the overall value of the vehicle (based on its value on the market.) Any modifications to these two elements will affect the insurance company’s appraisal of your vehicle, and by extension, your insurance policy.
In some cases, the effect might be raising your insurance premiums, but in the worst-case scenario it could mean termination of your insurance policy entirely.
Modifications Impacting Vehicle Safety
If you plan to make any modifications to your vehicle that change how it performs, it’s prudent to contact your broker/CSR before to do the work to understand how this will affect your policy. You wouldn’t want to invest in the modification only to have to undo it for inability to get your vehicle insured.
Changes which might impact performance and safety include:
Modifications to the engine
Modifications to the vehicle’s suspension
Modifications to the brakes or braking system
Modifications to the vehicle’s transmission
Increasing or decreasing the tire size
If you’re looking at making any of these modifications, take into account that they may raise your insurance premiums or force you to seek a new insurance agency which is willing to insure a modified vehicle.
Modifications such as lowering the suspension and altering the size and/or power of the engine are often considered to put the vehicle at higher risk of being in an accident. These are the types of modifications that are most likely to impact your insurance premiums.
Modifications Impacting the Vehicle’s Value
Unless explicitly stated in the policy, most insurance policies do not cover aftermarket parts, or offer only a small allowance for aftermarket modifications. This means that if you want to add something to your vehicle which increases its value like an expensive aftermarket sound system, custom paint job or aftermarket rims – these might not be covered under your insurance policy.
In fact, in some cases, modifications can void your insurance policy. As well, some insurance companies consider certain modifications as an increased risk for theft or vandalism.
If you’re planning to modify your car with aftermarket parts and want them to be covered, you can expect your insurance premiums to rise. Contact your broker/CSR to discuss the details and find out how much coverage is available for vehicles with these types of modifications.
Always Notify Your Insurance Agent About Modifications
When modifying your vehicle or purchasing a modified vehicle, it is extremely important that you inform your insurance company about the modifications. This is a responsibility placed entirely on the insured individual and the insurance company has no obligation to ask about or investigate modifications.
If you are in an accident and your insurance company finds out later that your vehicle was modified and you failed to inform them, your insurance could be revoked, leaving you liable for the damages and cost of the accident.
For customized vehicles with extensive modifications, it may be necessary to look for a specialized insurance company which deals with modified vehicles, as standard insurance companies may be unable to insure the vehicle.
Want to Know More About Vehicle Modifications?
If you want to make modifications to your vehicle, there’s no harm in that, just make sure you still have the right coverage, and that can be a confusing topic to figure out on your own. That’s where a DPM Insurance Group broker/CSR can help. Before you make any changes, give us a call. We’ll help you figure out how it will affect your insurance, and how much it’s going to cost.
Did you know that flooding is the costliest large scale weather catastrophe across Canada every year? When you consider that in 2020 severe weather caused $2.4 Billion in damage in Canada, and another $1.4 Billion in 2019, it’s worth it to consider how we can mitigate the potential damage.
And while the number of flooding incidents has been on the rise, and so too the damage to property, homes and people’s livelihoods, there’s a lot of people who are unprepared to deal with a flood emergency and have no idea how to ensure their property is protected as best as it can be.
Recent surveys reveal that 37% of Canadians do not know how to protect their homes from flooding. Even basic understanding of flood-prone areas is poor. Interestingly enough, 85% of Canadians do not believe they live in a flood-prone area (including the ones who actually do) or are simply unsure what their actual risk of flooding is.
On the other hand, at least the vast majority of Canadian (83%) understand that having an emergency preparedness plan or kit is case of flooding is important. But only 37% actually have a plan or kit; and only 41% of people living within 1 km of a major body of water.
Reducing the potential impact of flood damage is fortunately a relatively simple matter. Inspecting eaves troughs, downspouts, exterior drains and basement window wells every spring and fall to ensure they’re not blocked with leaves or debris is an easy first step. Potentially more daunting is making sure your property – whether a home or business – is graded so water runs away from the building Rain barrels, trees and landscaping that absorbs water can help too.
But what truly matters is people educate themselves on flood risks, not just for the property they own, but for their community in general, so they’re prepared to deal with a flood event.
Insurance is another important factor in the fight against flooding. Nearly one-third of Canadians don’t know what water coverage they have or need for their home or business. This means that, with water damage on the rise, many people have been finding out – too late – that flooding is not covered by many standard insurance policies, but needs to be added.
Most insurance policies just cover certain types of water damage, like burst pipes or appliance malfunctions. Other common water issues, like sewer back-up and exterior flood are optional and need to be purchased separately.
Having flood insurance and a strong flood risk plan is important, and 22% of Canadians are more concerned about flooding now than they were 12 months ago.
If you are unsure whether your property is adequately protected, the Brokers and CSRs at DPM Insurance Group are more than happy to review your current homeowners’ or commercial policy and ensure you have the kind of protection you need for your area. Click here to contact the office closest to you: https://dpmins.com/locations/
Source: Bethan Moorcraft for Insurance Business Canada
Spring is in the air, and while Covid-19 may be too, that doesn’t mean wedding plans aren’t still in the works for many people. With all the planning, preparation and other changes taking place as the big day approaches, thoughts about your insurance concerns sometimes can fall through the cracks.
But newlyweds have a lot to consider when it comes to combining their insurance policies and getting the proper coverage for their new life. There are considerations such as coverage for property, wedding rings, life insurance, and combining car insurance policies. These are the most common insurance concerns for newlyweds which can be taken care of quite easily. The following will help cover the insurance basics for newlyweds.
Typically, it takes marriage to happen for individuals to take out a life insurance policy if they hadn’t done so before. Wanting to protect one another and children in the future is given serious thought and consideration. For the ones that already carry life insurance policies, this is the time to update their beneficiary information and to consider adding additional coverage to increase their death benefit amount. For new couples who are starting out, this is the time to seek out a policy that covers both individuals regardless of who makes a higher income. It is best to remember that even if income is not a concern, having life insurance coverage will help pay for expenses in the event of a death.
Combining car insurance policies for newlyweds is a great way save some money for bundled policies, as well to ensure all drivers in the household are covered on all vehicles. This is a great time to shop around for car insurance quotes to see which company will best serve the needs and budgets of the new household. Combining home and life insurance policies, along with car insurance will add even more of a discount.
Whether or not a couple has lived together before marriage, there are sometimes concerns with personal property coverage when they get married. For couples that have never lived together before, this is the time to make sure all of their contents in the home are covered. Some valuable items require special coverage such as wedding gifts and jewellery. Items that exceed the coverage limit on the policy will need to be scheduled on the policy to ensure proper coverage is provided.
It is important for newlyweds to take the extra step to organize their insurance coverage needs as a single unit. This will ensure they are protected and are getting the best value for their needs.
The time between securing your newborn’s car seat into your vehicle and that same teenager buckling their seatbelt in the driver’s seat often seems to pass in the blink of an eye. Teenagers excited by the prospect of the freedom their driver’s license will bring aren’t always thinking big picture, and “distracted” is not what you want them to be behind the wheel.
As a parent, your thoughts are most likely on how to keep them safe and what it’s going to cost to insure the family’s newest driver. Being worried about your child getting behind the wheel isn’t the same as being over-protective; the sad truth is drivers under the age of 25 are statistically over-represented in all kinds of traffic accidents… including fatal ones. Drivers aged 16-24 accounted for just under 12% of all drivers on the road in 2018, but 16.5% of all fatal accidents and just under 18% of all accidents resulting in serious injuries.
Part of the blame lays with inexperience behind the wheel, but not truly understanding some of the consequences of risks they take also plays a part. Given that, here’s what you should consider doing to ensure they’re as safe as possible from the outset.
Honest Discussion About Impaired Driving
Young drivers need to understand all the consequences of impaired driving and parents need to make those crystal clear – zero chances. And even if they’re not behind the wheel talk to your teens about what to do if they suspect their ride is impaired. Let them know you will pick them up, no questions asked, if they feel unsafe. The law in Ontario has a zero-tolerance policy when it comes to drugs or alcohol for new or novice drivers. They can’t have any of either in their system if they get behind the wheel.
No Distracted Driving
One of the easiest methods of getting this message across is to lead by example. In some parts of Canada, the number of distracted driving fatalities per year is greater than the number of impaired driving fatalities. Despite this fact, far too many drivers still take the risk. Don’t be one of them and you increase the odds your child won’t be either.
Distracted driving is not just about texting. Distracted driving can mean anything from reading a newspaper to eating a sandwich but it frequently involves using a cellphone. According to Statistics Canada, young drivers are particularly susceptible; 45% of 18-to-34-year-old drivers report using a cellphone while driving. Furthermore, a 2020 CAA poll finds 47% of Canadians have programmed a destination on their GPS or mobile device while driving, and a quarter say they’ve noticed an increase in other drivers using their phones while behind the wheel.
Promising not to text or make calls while driving should be a requirement of getting to use the car.
Speeding can have serious consequences, not only in causing accidents, but convictions can lead to demerit points on your driver’s licence, expensive fines, and higher insurance costs. There’s good reason – 27% of fatalities and 19% of serious injuries involve speeding. As well, roughly 40% of speeding drivers stopped by the police in Canada are aged 16-24, and 80% of young adult passengers killed in a car crash were being driven by a similar-aged driver. Talk to your kids about these facts in a straightforward way, and make sure you guide them whenever they drift over the speed limit.
Here’s an interesting idea before tackling the potentially frustrating responsibility of teaching your teen to drive… switch places. Seriously, before taking them out for their first lesson, have them sit in the passenger seat and give you instructions from what they’ve learned about driving.
If they’ve been paying attention, chances are you’re going to be told to: adjust your mirrors; turn on the ignition; pull out of the parking spot; check your blind spots; turn here; stop here; slow down. The idea is it gives you a sense of what they’ll remember to do on their own, but also remind you of how frustrating it can be to be given constant direction behind the wheel. Chances are you’re both a little nervous, so do your best to remain calm when you change places again and your new driver is behind the wheel.
Use Empty Parking Lots
An empty parking lot is a great place for a first driving lesson. Once your teen is more comfortable with the basics, then move it out on to the road. Plan a route before you get started, but if either of you gets too stressed or anxious, cut it short.
Practice in All Road Conditions
If the timing allows, you’ll want to have your first few lessons on clear, sunny days. But eventually, especially in Southwestern Ontario, all drivers need to be able to navigate in less-than-ideal conditions. Lessons need to be conducted in all seasons so your teen gets experience driving in the rain and snow. Make sure they practice at dusk and dawn, so they learn how to deal with extra glare. Busier streets with tight parking spaces and one-way streets are also good things to practice once your young driver has built up some confidence.
Turn It Over To The Pros
It’s definitely a good idea to have your teen take driving lessons, saving you time and minimizing your — and your child’s — stress levels. Professional instructors are trained to teach new drivers and have safety features built into their vehicles, such as extra brakes. There’s also the added bonus of the fact that young driver will qualify for discounted insurance, and will soon cover off the cost of the lessons.
Who’s Going to Pay?
Cars are expensive. Remind your child that driving is a privilege and consider making them responsible for at least some of those costs. Maybe they’ll need to pay their portion of the insurance premium or gas. Even if it’s technically not their vehicle, they may also feel more of a sense of ownership of the car and are likely to take better care of it if financially invested.
If your teen driver only holds a learner’s permit – the type that requires them to have a fully licensed driver with them at all times when driving – you don’t have to list them on your auto insurance policy just yet. You do, however, have to list them once they advance to the licence level that allows them to drive without supervision. In Ontario, this means when they get their G2 licence.
Know Maintenance Basic
Understanding the importance of maintaining a car is a helpful step in becoming a good driver. Teens should learn how to pump gas, refill windshield wiper fluid, check tire pressure, and change a flat tire. Review the owner’s manual for a refresher course on what each dashboard light means.
Go over the steps of what to do and how to stay safe if something goes wrong with the car when they are out on the road, and don’t forget to provide the phone number of your roadside assistance program if you have one.
Accidents Happen. Teach Them What to Do
No one wants to think of collisions happening, but at the same time, statistics show that crash risk is highest during the first few months that teen drivers gets licensed. If your teen gets into an accident, the last thing you want is for them to panic. Teach them to stay calm, check their surroundings, call for help, and gather the information needed (licence and insurance details) from the other drivers involved. It’s important to stress that everyone’s safety is paramount and this is what matter most.
Whoever came up with the name “no-fault insurance” really hasn’t done drivers any favours. It’s misleading to the majority of people who don’t work in the auto insurance industry. No-fault insurance doesn’t mean nobody is to blame for a collision; it’s largely about how insurance claims are paid out.
One of the most common auto insurance myths is that no one is to blame for a collision under a no-fault insurance system. That couldn’t be further from the truth. Someone is always to blame for an accident.
What no-fault insurance really means is that the driver not at fault gets compensation from their own insurance company in the event of an accident. Before no-fault came into effect, innocent drivers would have to fight the other driver’s insurance company to get their claim paid, and would be out of pocket while waiting for it all to get sorted out.
No-fault insurance is meant to make your claims process easier and quicker. It generally cuts out the high cost of lengthy legal battles that uses up time and resources. That said, some provinces with a no-fault system still allow lawsuits for pain and suffering to occur, as well as lawsuits for financial losses that exceed the upper limits of no-fault benefits.
Someone is always at fault. Accidents aren’t really “accidents” they’re collisions, and they don’t just happen. Someone will be blamed, and sometimes there’s more than enough blame to go around. Fault for a crash can be placed wholly on one driver or split up amongst several drivers, so the responsibility is shared.
From an insurance standpoint, determining fault for a collision isn’t in the hands of the police. It’s not even, really, in the hands of the insurance adjuster. There are rules in place that determine fault – that are basically universal — so this part of the collision aftermath has already largely been looked after. All that really needs to be done (by the insurance adjuster) is to determine what type of collision happened.
For example, if you rear-ended another vehicle, the fault determination is clear: you are 100% at fault for causing the collision. It does not matter if the person ahead of you suddenly stopped or if the weather factored into your inability to stop in a safe and timely manner. It’s expected that your following distance from the vehicle in front of you will allow for enough space and time to brake safely to avoid a crash. If it doesn’t, and you rear-end the vehicle ahead of you, then you were either too close or not paying attention.
Ontario’s at-fault rules (officially called Fault Determination Rules) detail more than 40 different collision scenarios — with images — to help ensure all drivers are treated the same. There are rules for vehicles travelling in the same direction, opposite direction, at intersections, parking lots, as well as other scenarios that are not easily grouped together.
If your insurance company determines you had a hand in causing the crash, and you have collision coverage (which you may not because it’s optional), you may have to pay part or all of the deductible to repair damages to your automobile. The amount of deductible you pay will often mirror your degree of fault for the collision.
Then there’s the matter of your auto insurance premium. Unless your policy includes the accident forgiveness endorsement, an at-fault collision can be a costly mistake. It takes about six years for a collision to no longer factor into the premium you pay.
No-fault insurance still means you can be found at fault for causing a collision, so drive safely and responsibly every time you get behind the wheel. Your driving record and insurance history factor heavily into the auto insurance rate you pay.
Deciding who is at fault after a car accident is often cut and dry… but “often” does not equate to “always”. Determining fault in some accidents can be quite complex. Some of the most common accident scenarios almost always result in the same fault determination, based on the fault determination rules either of the province or of the insurance company. Here are a few examples of common accident scenarios and how fault is determined in each.
Scenario #1: The Rear-End Collision
Maybe a child runs into the road in front of you. Maybe someone rolls through a stop sign necessitating you to slam on your brakes to avoid hitting them. Whatever the reason, if you brake suddenly and the car behind you doesn’t stop in time and hits back of your car, the driver behind you is going to be at fault. Even though a child entering the road caused you to brake unexpectedly may seem to be the blame, in this situation the driver behind you will be found at fault. In fact, rear-end collisions are almost always the fault of the driver who strikes the other car from behind. Drivers are expected to allow enough stopping time and distance to safely stop without striking the car in front.
Scenario #2: Two Turns, One Fault
You drive up on an intersection where the light is red. You stop, put on your right turn signal, and make a right turn on red, which is legal. Just as you start to turn, an oncoming car makes a left turn on an advanced green arrow and hits your vehicle. While a right turn on red is legal, the car making a left turn on a green arrow has the right-of-way. In this case, the driver turning right on red will usually be found at fault for the accident. One of the most important things when making a right turn on red is being aware of which lane currently has the green light and thus the right-of-way. When you proceed to make the turn, you should be certain it is safe to do so.
Scenario #3: Backing Up Blind
Let’s say you’re leaving a parking space in a busy lot, but you’re having trouble seeing because there is a large black SUV parked next to you. You can’t see the vehicle coming down the lane and back into its bumper. Even though your visibility when backing out of the parking space was affected by the large vehicle next to you, you will likely still be found at fault in this situation. Whenever a car leaves a parked location and enters the flow of traffic, that car must yield the right-of-way to those already driving. Backing up very slowly out of a situation where visibility is limited might take some time, but it is necessary to ensure you can proceed safely.
Scenario #4: Icy Intersection Collision
You’re stopped at a red light on a bad winter’s day the light turns green you proceed into the intersection, just as a vehicle coming the other way slides on a patch of ice and goes right through the red light, hitting your car. When it comes to deciding who is at fault, winter weather will not affect the outcome. The driver who entered the intersection on a red light will be held at fault for the accident even though the ice played a role. Drivers are expected to be prepared for ice on the roads during winter by driving more slowly and allowing more stopping time and distance.
Scenario #5: The One-Car Collision
This one seems pretty obvious, but you may be surprised by the number of drivers involved in one-vehicle crashes who don’t think the accident was their “fault”, but rather they are victims of circumstance. Let’s say you are driving in an unfamiliar area and don’t see your next turn at the last minute. Instead of driving by and turning around, you make a last-ditch effort to slow and make the turn, overshoot and end up in someone’s yard, knocking down a portion their fence. No one is hurt, and your car is the only one involved. Any time you strike property without any other car being involved in an accident, you are found at fault. Failure to take the turn carefully in this situation is the reason for the accident. When you miss a turn, it’s best to simply turn around at the next available location and come back to make the turn safely, rather than risking a crash.
Buying a home is generally the largest investment the vast majority of people make in their lifetime, and home insurance is what protects that investment. Despite the fact a mortgage holder will require you to insurance your home to protect their own interests, even a mortgage-free home should be fully insured.
As well, not many people are in a financial position to rebuild and refurnish their home in the event of a total catastrophic loss. Nor can most cover the costs of a lawsuit payout were someone to injure themselves severely in something like a slip and fall accident while visiting your home.
There are many factors that can affect your homeowners’ insurance rate, but just like car insurance rates, what you pay can range widely between different insurance providers for the exact same home at the exact same address.
Then what, you may wonder, specifically affects your rates?
And, just like auto insurance, home insurance rates can vary substantially between insurers for the same home at the same address. But what affects your home insurance rate specifically?
- The age of the house
Newly built homes with the most current electrical, heating, and plumbing systems are often less probe to a variety of hazards, which means you’re less likely to have a claim. Because of this, some providers offer a ‘new home’ insurance discount that lowers your premium.
- Your claims history
If you’ve got a few claims on your insurance record, you’re likely to end up paying higher rates than if you had one or none. But that doesn’t mean you shouldn’t file a claim when necessary. Generally speaking, one claim won’t mean file will be flagged as being a high-risk.
- Replacement cost
A house that boasts upgraded finishes like marble, hardwood, and granite is going to cost more to insure than a similar home on the same size lot that is finished in lower cost materials. The same is true for a larger home with more square footage. It all comes down to what it’s going to cost your insurer to rebuild your home after a significant loss from something like a fire.
The neighbourhood your home is located in is also going to play a part. If you live where there have been numerous claims over the years for sewer backups as an example, that will maker a difference, and you can expect to pay a higher rate that if you lived somewhere that has not historically been an issue.
- Having a pool
While swimming pools do increase the replacement cost of your home, the more likely issue is the fact a pool increases your exposure to liability claims should someone drown or get injured slipping on wet decking next to the pool.
- How close help is in an emergency
If you live in town, chances are you’re not that far from a fire hydrant or even a fire station. But if you live in a rural or remote area that’s not the case. All other factors being equal, your home insurance rate will likely be higher than it would be for located in an urban setting.
- How you heat your home
If you have a wood stove or fireplace, it’s far more likely that you will experience a fire than a home without either of those two items. That’s just the reality of the situation. Your rates will also be higher if your home is heated with oil, since oil tanks have the potential for causing expensive environmental issues. If you do heat with oil, expect questions about the age and condition of your oil tank.
- The age of the roof
The older your roof is, the more likely you are going to experience issues such as leaks or the loss of shingles in a wind storm. If your roof is in dire need of replacement, chances are you’re going to pay higher premiums than if it were considered up-to-date.
- Do you have renters
While the idea of renting out a level of your home can be a way to help pay down your mortgage or otherwise get a return on your investment, it can also impact your home insurance premiums. If you have tenants, your house is no longer considered a single-family dwelling. Multi-family properties come with a different set of risks that will be used to calculate your home insurance premium.
- Electrical wiring
Because of its potential to significantly increases your chances of having a fire, insurance companies look closely at what kind of electrical service you have. This is a significant factor in older homes where there is knob and tube wiring, aluminum wiring, or there’s a fuse box instead of breakers. Insurers also consider homes with less than 100-amp electrical service to pose an increased risk for claims.
Old galvanized or lead plumbing almost always translates into an increased chance of water damage and an insurance claim because the pipes are more likely to rust, crack or corrode. That means you’ll pay more over a similar valued home with newer copper or plastic plumbing systems.
- A home-based business
A homeowner’s insurance policy is designed to protect your residence, not a place of business. Combining the two can mean an increase in potential claims exposure. You can add a home business extension to your current policy, at additional cost, but that will ensure both your home and your business are adequately protected. Without the extension, you’re risking both.
Obviously, no traffic ticket is a good ticket; there’s the initial fine and quite often, implications when it comes time to renew your insurance. But not all tickets are created equal. This is a list of the 10 worst tickets to get when it comes to guaranteed rate increases at renewal time.
Speeding in a school zone.
We all get in a rush from time to time, but making up for lost time behind the wheel can cost you in more ways than one. But going over the speed limit in a school zone endangers the lives of students and that reality comes not only with increased fines, but quite possibly a greater rate increase than a speeding ticket on the open highway.
Driving while impaired by alcohol or drugs is viewed by everyone as one of the most abhorrent driving offences. Not only can this result in a criminal record, it is going to significantly increase your insurance rates every time. Fortunately, this is one of the easiest tickets to avoid because all it requires is for you to stay out from behind the wheel if you have been drinking or using drugs.
Passing a school bus with red lights flashing
This is another indefensible driving behaviour, and one that’s still far too common. Drivers must stop when a school bus activates it’s flashing lights and extends is stop sign located on the driver’s side of the bus. Passing a school bus improperly is a major offence and will result in a big increase in your insurance rates.
Driving more than 50 km/h over the limit (Stunt Driving)
While there are several factors which the courts will use to determine your penalty if convicted of speeding 50 km/h or more above the posted limit, you’re almost guaranteed to be facing insurance cancellation, a 2-year driving suspension, huge fines, and up to 6-months in jail.
While many lawyers will tell you that a Careless Driving charge might be the easiest to fight in court, that doesn’t mean you should disregard the potential fallout. If your day in court doesn’t end with an acquittal, you’re going to see a hefty premium increase come renewal time. Driving carefully at all times is the best way to avoid a careless driving ticket.
Driving without insurance
In life there are dating red flags, and insurance red flags. This is one of them. Not only is this an expensive ticket, it’s sends the message to insurance companies that you don’t take your responsibilities seriously. It’s quite likely you’ll be quoted higher rates when you are shopping around for coverage after you’ve gotten a ticket for driving without it.
This is one of the rules of the road most easily and often disregarded by drivers. But put that phone down; it’s a big fine to get caught talking or texting without a hands-free device, and it will impact your insurance rates too.
Graduated license restrictions violations
When you are in the graduated license stage of driving, you might not be paying for your own insurance yet, but that doesn’t mean offences aren’t going to impact your insurance rates. You won’t just face the ticket and the resulting actions in terms of your license, including possible suspension, but you will end up paying higher insurance rates when you do get your own name on a policy.
Speeding in a construction zone
Much like speeding in a school zone, speeding in a construction zone is views more seriously because you’re putting pedestrians at risk. The big fine you’ll receive on conviction will be followed with a hefty rate increase.
Refusing to take a breathalyzer
Refusing a breathalyzer is almost as serious as getting a DUI ticket, and it will seriously hurt your wallet as well as leading to potential criminal charges. Always cooperate with the police when you are pulled over – and drive sober so you have no reason to fear the breathalyzer.
Keep in mind that any tickets your receive stay on your driving record for three from the date of conviction, so the financial implications last far longer, and can cut far deeper, than paying the initial fine.