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. If you're looking for the right home insurance for you and your family, here's what you need to know.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
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 option is less expensive because fewer hazards are covered, as compared to a comprehensive policy. A mix of comprehensive insurance and basic insurance policies is called broad home insurance.
How much coverage do you need?
If your insurance covers enough for you to entirely rebuild and furnish your home, if it were completely destroyed, your home-insurance policy is adequate. 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. Be sure to point out any unique and/or expensive details that would add to the replacement cost. You'll need to know what kind of coverage you want, once you've determined the replacement cost of your home.
Taking an inventory of your personal possessions and the contents of your home will help you to make sure that you are completely covered and reimbursed if you have to file a claim for damages or theft.
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 does it cost?
The cost of your home insurance policy varies depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors. In general, the more coverage you have, the more it will cost.
A deductible is how much you must pay against the entire cost of any repairs or damage claimed. 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.
First time home buyers, faced with the prospect of choosing a home insurance policy, are probably asking how much coverage they need and what it costs.
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 option is less expensive because fewer hazards are covered, as compared to a comprehensive policy. A mix of comprehensive insurance and basic insurance policies is called broad home insurance.
How much coverage do you need?
If your insurance covers enough for you to entirely rebuild and furnish your home, if it were completely destroyed, your home-insurance policy is adequate. 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. Be sure to point out any unique and/or expensive details that would add to the replacement cost. You'll need to know what kind of coverage you want, once you've determined the replacement cost of your home.
Taking an inventory of your personal possessions and the contents of your home will help you to make sure that you are completely covered and reimbursed if you have to file a claim for damages or theft.
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 does it cost?
The cost of your home insurance policy varies depending on the amount of coverage required, as well as the deductible you choose, the neighbourhood you live in and other factors. In general, the more coverage you have, the more it will cost.
A deductible is how much you must pay against the entire cost of any repairs or damage claimed. 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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