Home insurance
You can’t afford not to have it
Still today, some people who don’t own anything of value think that home insurance is not something they need. They forget the most important thing: home insurance not only covers the insured person’s possessions, but also civil liability with respect to harm that this person might cause to others. This is why this type of protection is for everybody, whether you are a property owner, a co-owner or a tenant.
Your home’s characteristics and its location are among the many factors that can have an influence on home insurance cost. This is why it’s best to get information on the approximate cost of home insurance on a property before buying it… Even so, some contracts offer a minimal coverage that most people can afford. Better limited coverage than no coverage at all! Indeed, without protection, an incident that seems ordinary can have dramatic repercussions on your life and that of your neighbours.
How you can pay less
All the choices you make have an incidence on the amount you will pay: the physical characteristics of your home, its surroundings, the environment (urban, rural…) the kind of neighbourhood (commercial, residential, tourist, historical…) the type of dwelling (single-family home, duplex, condo…) the year it was built, the heating system (electricity, oil, wood…).
You should know that if your property’s value is taken into consideration when your premium is calculated, it is the cost of rebuilding that is factored in rather than its market value or municipal assessment. Of course, the extent of the coverage, the value of your belongings, the special riders (for particularly valuable objects) will also affect the premium.
In 2012, the basic deductible in home insurance policies is approximately $300. If you financial situation allows it, ask that it be set at $500. This should bring down your premium substantially. Installing a burglar alarm and a smoke detector linked to a central service will also translate into savings.
GOOD TO KNOW...
In order to benefit from the “replacement value” clause, if it is included in your policy, you must effectively replace the goods that were lost. Otherwise, you will be reimbursed partially according to their depreciation.
Typically, your home insurance covers up to 10% of the total value of movable property. In other words, if you are insured for $60,000, you may not claim more than $6,000 for personal property stolen outside your home (in your car for instance).
Your insurer has the obligation of bringing your property back to the state it was in before the event. The insurer can therefore choose to clean or repair rather than replace.
Your insurer is obligated to indemnify you within 60 days of the receipt of your claim or, as the case may be, the receipt of supporting documents and additional information that were requested.
An insurer that mandates a claim adjuster must pay for his or her fees. If you decide to hire an independent claim adjuster, this will be at your expense.
If you occasionally hire people to work in your home and someone is injured, your policy will cover such an occurrence.
In general, you are free to choose the repair person or supplier with whom you wish to do business for the replacement of your lost property. However, it is best to talk with your insurer first, for there are good chances that he will recommend a supplier with whom he has an agreement.
How to protect yourself adequately
A home insurance policy generally covers major risks (fire, explosion, smoke or water damages, theft, vandalism), as well as certain natural disasters (tornadoes, wind storms, hurricanes, hail storms). However, sewer systems back-ups are not necessarily part of the list and to get insurance for such eventualities is not a luxury if you have a finished basement.
Your insurance policy is designed to protect your home and its occupants according to the description you provide. To avoid any misunderstanding, you should provide your insurer with current and exact information (address, occupants, type of home, type of heating system, etc.).
All particular belongings need a specific coverage. Many are insured up to a pre-determined amount. If you have reasons to believe that the value of your belongings is greater than the average, you should insure it separately. Furthermore, if you are using part of your home as an office, you should make sure that your insurance covers the goods and equipment that you use for your business.
Most insurance policies set an indemnity limit of between $500 and $1,000 for valuables such as jewellery, furs, collections, valuables as well as cash and animals. If your situation requires better coverage, get information on the possibility of increasing these limits.
Don’t forget to renew your insurance policy on time every year and review it regularly to make sure that it continues to meet your needs adequately.
How to expedite the payment of a claim
To expedite a claim related to a theft or a loss, you must be able to quickly provide your insurer with a list of your belongings and supporting documents (invoices, photos, videos, warranties, user manuals). Tedious preparation? Not necessarily. You are wiser to choose the lesser of two evils. So make a list of your belongings and attach the supporting documents to it. It is also recommended to film your home or to draw a plan of it showing where your belongings are kept. Consider keeping a copy of everything outside your home.
Following a theft, a fire or another insured loss, you must first contact the authorities and then take the means to mitigate the damages, prevent further damage and protect what is left. Make the necessary temporary repairs but do not undertake permanent repairs without your insurer’s agreement.
If you must do urgent repairs (for example: board a window to secure the premises), take pictures of the rooms that were damaged and save your invoices. Do not throw anything away unless what was damaged or destroyed has become a health hazard.
To make the list of damaged or stolen goods, use your inventory or ask your insurer for a checklist so as to not forget anything. Document your claim with proofs of ownership of the damaged or stolen goods.
Don’t be tempted to claim for equipment or objects that you did not own or to exaggerate the value of your losses. This can jeopardize your indemnity and tarnish your reputation with the insurer.
Conversely, avoid forgetting to report a damaged or stolen object. So that things can go smoothly, it is preferable to submit a complete claim from the start – thus the utility of taking an inventory of your belongings now, especially given that this tool will help you determine your needs more precisely in terms of home insurance.
If your home has become inhabitable, ask your insurer about the indemnities to which you are entitled with respect to living expenses. If need be, ask the insurer for a cash advance.
No matter what happens, do not sign or enter an agreement with an independent claim adjuster or a contractor while you are still in a state of shock.
Source: Insurance Bureau of Canada, Jacques Beaulieu Consultant