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What are the Three Levels of Coverage for Homeowner’s Insurance

a complete guide to buying home insurance in canada f

What are the Three Basic Levels of Coverage for Home Insurance

For any homeowner in Ontario, a home insurance policy is more a necessity than a luxury. Not only does it give you financial peace of mind by covering a variety of losses from damage or theft, but most mortgage lenders require borrowers to have home insurance before disbursing the loan for your Ontario home. In order to make a smart insurance decision, it is important to know the basics, including the levels of three levels of coverage, exclusion clauses, claim processing protocols, and other important considerations of buying a home insurance policy.

Our team of experienced home insurance brokers in Newmarket offers an overview of the basic inclusions in a standard home insurance policy, along with the typical coverage levels.

Basic Coverage Under Home Insurance Policy in Newmarket and the Rest of Ontario

The Insurance Bureau of Canada (IBC) features several types of home insurance policies that you can purchase for your Ontario home. While the typical home insurance will cover your dwellings, contents, and personal liability, a standard policy will not cover all types of risks or perils. Here’s an overview of the common risks covered under each:

  • Dwellings: Covers loss or damage to the actual building that you live in (apartment, condominium or house). Insured perils under the standard policy generally include fire, smoke (caused by malfunctioning heaters or cooking devices, but not fireplaces), theft, lightning strikes, wind, vehicle impact, explosion, and more.
  • Contents: Covers your possessions against damage, theft, and vandalism. This typically includes your clothing, furnishing, furniture, electronics, sports equipment, bicycles, and so on. Protecting your special or high value assets, such as fine art, antiques, heirloom pieces, etc. requires separate, additional coverage.
  • Personal Liability: Covers the medical or legal costs that you may incur in case you are held liable for any unintentional damage to others. For example, if a pipe leak from your condo unit damages another unit, you will have to bear the cost of repairs or replacements, which your basic home insurance policy will cover.

No matter which type of home insurance policy you buy for your Newmarket home, it is important to balance the coverages with your needs and affordability. The greater the coverages, higher the premiums. Before finalizing your policy, compare different home insurance policies to determine the one that best meets your requirements and budget.

Coverage Levels While Insuring your Ontario Home

While the clauses, terms, and coverage may change from one insurance company to another, here are the three basic levels of coverage for homeowner’s insurance in Newmarket and the rest of Ontario.

  1. Comprehensive: Offering maximum inclusions, a comprehensive home insurance policy will cover the building, as well as the contents for all potential risks, except those that are specifically excluded in the policy. Some of the risks that this policy will not cover are:
  • Uninsured perils (such as damage by rodents or birds, fuel oil leaks, damage to illegally acquired property, and so on.
  • Other optional coverages, such as flood, earthquake, sewer backup, and more.
  1. Basic or Named Perils: Homeowners who need some basic level of protection but wish to keep the premium low can look at a basic or named perils home insurance. This policy covers only those perils that the policy document specifically defines. In the event of any other unlisted perils, you will need to bear the financial losses on your own.
  2. Broad: If a comprehensive policy premium is too high, and a named perils or basic policy does not suit your needs, there is a mid-price compromise in the form of a broad insurance policy. This type of home insurance policy combines a comprehensive coverage for the building, with a named perils coverage for contents in your home.

For properties that may not meet the normal insurance standards, certain insurance companies offer a no-frills policy with bare minimum coverages. Moreover, most home insurance policies will include personal liability coverage for any unintentional damage that occurs on your property or elsewhere.

Let Our Experienced Insurance Brokers Help You Get the Best Home Insurance Policy

At Orr & Associates, our goal is to provide the best coverage for your needs in keeping with your budget. Whether you are a first-time homeowner, a seasoned home buyer or just browsing the market for a new provider, our experienced home insurance experts in Newmarket can help you compare different policies from all the top home insurance companies and make smart insurance decisions.

For more information on our products and services, call us toll-free at 1 (866) 521 5926. You can also get in touch with us online to request a free quote for home, auto and other types of insurance.