Home Owners Insurance 101
Homeowner’s insurance is not a luxury or optional component of buying a home.
It is non-negotiable.
It is necessary.
In Ontario, Homeowner’s insurance protects you and is incredibly important when considering that your home is likely your largest investment. It protects you against financial disaster in the event of theft, fire, severe weather, and more.
But that is not all.
It also includes liability insurance in the event someone is injured at your home. When evaluating the policy, insurance companies consider multiple items to determine their risk—and your cost. Understanding how rates are determined can help you compare options and get the best policy for your home.
Home insurance is one of those tricky and typically uncomfortable topics in your real estate experience. Just when you found the dream house, have stretched your resources and invited a busy transition into your life, the issue of home insurance arises its less than pretty head. It’s hard to embrace another tough but necessary decision as well as understand what it all means.
We always tell our clients about the importance of having an insurance broker who you trust, understands your goals and resources, and is willing to listen to your questions along the way. Understanding your policy options is crucial to make an informed decision. Make sure you have your list of questions ready, and you are clear about the small print of any policy being offered for consideration.
Will it cover you when you leave for vacation?
Are my valuables covered? If not, what proof of value do I need to ensure they are?
Does my policy protect me during sewer backup?
How does my insurance protect me from flooding?
Are the house contents covered? How do I ensure the value?
Does it cover the market value of my house?
What about critters and rodents that do damage?
Are natural disasters excluded in my policy?
Many things can affect what you will pay for homeowners insurance. You may wonder why your homeowners insurance policy with all the same inclusions and exclusions is different than your own. Seven things That can Affect What You Pay for Homeowner’s Insurance:
Square Footage: The larger the home, the more it would cost to replace if damage occurred.
Layout: A single-story home might have higher foundation and grading costs, whereas a two-story home would need alternative construction methods.
Construction Materials: Wood roofs would cost more to insure against a fire claim, as would a home with expensive travertine floors. A simpler home of modest building materials would cost less to insure.
Property: The assumption is that an older home might have more deterioration than a newer home, which is considered in the replacement cost.
Home Features: Extra buildings or pools will be insured at a higher cost.
Neighbourhood: Local crime rates are reviewed to determine the risk to property and personal items.
Credit Score: Serious credit issues might be a factor in how well a property is maintained.
Your trusted realtor is fluent in homeowners insurance and should be able to support you in the challenging process of searching out and obtaining the best policy for you. If you aren’t sure where to begin in the quest for affordable but comprehensive insurance that will protect you best, we can help. Reach out.
