How to Choose the Right Home Insurance

How to Choose the Right Home Insurance

No one has ever said, “I can’t imagine a better way of spending an afternoon than shopping for insurance!” Nevertheless, taking the time to properly examine your needs and options may save you a lot of trouble should you need to submit a claim.

Moreover, as premiums and coverage vary from one company to the next, choosing the right home insurance policy will secure your peace of mind. 

What Does Homeowner’s Insurance Cover?

Carefully read through your insurance policy contract. The damages for which you are insured are termed “designated risks.” The most common are:

  • Damage or loss to your property.
  • Theft or damage to your belongings.
  • Damage or injury to persons visiting your property.
  • Damage you accidentally cause to someone else’s property.
  • The theft of belongings from inside your vehicle. (That’s right! Property stolen from inside your car is covered by your home insurance and not your auto insurance!)

There are three types of home insurance policies available in Canada:

  • A standard policy covers a predetermined list of risks, such as fire and smoke damage, theft, and personal injury. You will only be protected against what is included in the list.
  • A broad policy provides standard coverage plus a few extras, such as including your belongings and the property’s structure.
  • A comprehensive policy, also termed all-perils coverage, provides the broadest protection, explicitly naming, instead, the risks for which you are not covered. Therefore, if flooding is specifically stated as an exclusion in your policy, your insurance company will reimburse you for all damage caused by any unexpected event, like fire, except that resulting from flooding.  

Check the Fine Print

We purchase insurance in the hope that we will never have to use it. Despite this, no one’s residence is invulnerable. In general, it can be worthwhile to increase the amount of the deductible to reduce your monthly premiums. It is often recommended that you pay for minor damage (under $5,000) out of your own pocket, rather than submit a claim to your insurance. Your first claim, although it may be small, can in fact cause your premiums to rise by 25%.

A bit of advice: beware of cut-rate companies that sell insurance policies at unbelievably low prices. The coverage provided will either be far below your needs, or your provider will consistently increase your premiums when your policy is up for renewal every year. You may end up in a lose-lose situation!  

Are You a Tenant? You Need Insurance as Well

Don’t commit the error of thinking that only real estate owners are required to have insurance. Even if you rent your residence, you must purchase an insurance policy. Tenants must take out coverage for their belongings as well as personal liability insurance. The consequences of a disaster, if you should accidentally set fire to your apartment for example, occurring while you are not protected by an insurance policy can be hellish.

To Summarize…

As you shop around, make sure your policy provides adequate protection against the most frequent and probable risks, while not making you pay high premiums on coverage you’ll ever need.

Likewise, remain alert when having your contract’s clauses explained to you. To avoid forgetting anything when talking to an insurance company, prepare a list of the key points you want to discuss beforehand. Regarding this, you are more likely to obtain the right policy at a fair price if you get several quotes.   

RE/MAX Québec

By RE/MAX Québec

By RE/MAX Québec

A leader in the real estate industry since 1982, the RE/MAX network brings together the most efficient brokers.