Things to Keep in Mind while Buying a Home Insurance Policy
Buying a home in Ontario is a big decision that needs careful consideration. From the location, size, and type of property to the price, appreciation value, and finances, you may study various aspects to maximize your investment. Similarly, it is important to keep a few things in mind while buying your home insurance policy. Protecting a valuable asset like your home starts with ensuring that you have a robust policy offering comprehensive coverage, affordable premiums, reasonable deductibles, and convenient claims processes.
Read on for useful insights from the team at Orr & Associates. Our experienced insurance brokers in Barrie offer practical tips and suggestions for buying a home insurance policy.
Top 5 Considerations for Buying a Home Insurance Policy
- Study the Details: Most home insurance policies will offer coverage for your dwellings (your actual house or apartment), contents (personal possessions in the property), and personal liability (legal, medical or repair costs for any unintentional damage or harm caused to others). Every policy and insurer may use different terms and terminology. Pro Tip: Read the fine print and clarify the insured perils, terms and conditions, and exclusions for the policies that you are considering. For example, in some policies, “electrical surge” may include smoke damage caused by heaters or cooking devices, but exclude fireplaces.
- Understand Cash Value Versus Replacement Value: Covering your home for its replacement value may involve higher premiums, but will translate into comprehensive coverage to rebuild a damaged home or replace lost contents.
- Actual Cash Value (ACV): Accounts for the current resale or market value of your home, and the contents, after depreciation. For example, if your 5-year-old washing machine or TV was irreparably damaged in a house fire, ACV will likely cover you for the current value of your used and depreciated equipment and you will have to pay the differential for purchasing a new machine.
- Replacement Value: Covers you for the cost of replacing your damaged asset. In the above example, if you have a replacement value coverage, your insurer will pay for the complete cost of purchasing new equipment.
- Consider Climate Change: In recent times, homeowners across Canada have experienced various climate change related perils. Severe and unprecedented weather conditions, including heat domes, wildfires, flash floods, high-speed windstorms, and tornadoes have caused massive property damages that led to skyrocketing repair costs. Since the standard clauses in most home insurance policies do not cover repairs for damages caused by catastrophic weather, it is important to look out for gaps in your coverage, and add specific endorsements based on your location and needs. Pro Tip: In addition to your policy, make sure that your home is disaster-ready by investing in useful tools, equipment, and modifications that safeguard the structure and foundation of your home.
- Don’t Forget Flood Insurance: Water damage can be an extremely inconvenient and horrifying time for any homeowner. Even a small leak may cause massive destruction of furniture and belongings, or spur mold growth in your insulation and walls. Even if your home does not fall under a flood zone, look at including flood insurance in your home insurance policy in order to cover flooding from a burst pipe, water leak, or unexpected overland flooding.
- Cover All Your Assets: Consider a “floater” or additional endorsement to cover some of your exceptionally valuable items that are not included in the standard home insurance policy. For example, antiques, fine art, heirloom jewelry, designer clothes or accessories, musical instruments, and so on.
Remember, as part of the contractual obligations, every insurer specifies the conditions for which they can deny your claims or even invalidate your policy. For example, poor home maintenance or using the home for commercial purposes. Be transparent with your insurer about any major changes, including renovations, leasing, and such.
Get the Best Home Insurance Policy from Experienced Insurance Brokers in Barrie
As one of your most valuable assets, it is important to ensure that your Ontario home has proper coverage from a variety of potential risks. Home insurance will not only cover your financial losses, but also protect you and your family from emotional and mental stress. However, when it comes to buying a home insurance policy, the details and fine print are what matter the most. At Orr & Associates, our expert home insurance brokers in Barrie take the time to listen to your needs and compare home insurance policies across all the top insurance companies in this space.
Get in touch with one of our experienced insurance consultants today. Call us toll-free at 1 (866) 521 5926 or contact us online to request a free quote for home insurance.