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's what you need to know to help you find the right home insurance for you and your family.
You might be wondering how much coverage you need and what that will cost if you're a first time home buyer.
Home insurance is an insurance policy that you purchase to cover the cost of replacing your home and its contents in the case of a 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.
The specific perils that are set out in the policy are all that basic home insurance covers. This is a cheaper option since it doesn't cover as many possible hazards as a comprehensive policy. 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. Get an estimate, by asking a home builder to walk through your home and tell you what it would take to rebuild; base how much replacement coverage you'll need on that figure. Unique and/or expensive details add to the replacement cost; be sure to point these out. Once you've determined the replacement cost of your home, you'll need to know what kind of coverage you want.
To make sure that you are completely covered and reimbursed if you have to file a claim for damages or theft, take an inventory of your personal possessions and the contents of your home.
Finally, liability coverage is important to protect you in case something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged.
What will it cost?
The cost of a home insurance policy depends on how much coverage is required, your chosen deductible, the location and other considerations. Generally speaking, more coverage means more cost.
A deductible is the amount which you are required to pay against the full cost of the damage or repairs. You can choose to raise or lower your deductible when you purchase your insurance policy. As a rule of thumb, your monthly premiums are lower with a higher deductible. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
You might be wondering how much coverage you need and what that will cost if you're a first time home buyer.
Home insurance is an insurance policy that you purchase to cover the cost of replacing your home and its contents in the case of a 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.
The specific perils that are set out in the policy are all that basic home insurance covers. This is a cheaper option since it doesn't cover as many possible hazards as a comprehensive policy. 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. Get an estimate, by asking a home builder to walk through your home and tell you what it would take to rebuild; base how much replacement coverage you'll need on that figure. Unique and/or expensive details add to the replacement cost; be sure to point these out. Once you've determined the replacement cost of your home, you'll need to know what kind of coverage you want.
To make sure that you are completely covered and reimbursed if you have to file a claim for damages or theft, take an inventory of your personal possessions and the contents of your home.
Finally, liability coverage is important to protect you in case something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged.
What will it cost?
The cost of a home insurance policy depends on how much coverage is required, your chosen deductible, the location and other considerations. Generally speaking, more coverage means more cost.
A deductible is the amount which you are required to pay against the full cost of the damage or repairs. You can choose to raise or lower your deductible when you purchase your insurance policy. As a rule of thumb, your monthly premiums are lower with a higher deductible. 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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