Home Insurance

Make sure you purchase a policy that reflects the unique qualities of your home, its contents and the people who live there.

Your home should be insured from the moment you take legal ownership-even if it is under construction. Your broker's expertise is particularly useful at this stage when you really need to match policy features with needs. Here's a primer to get you started:

Home insurance covers the building, its contents and liability
There are usually three parts to your homeowner's policy. For condominium owners and tenants, just the contents and liability coverage's apply:

1. Building insurance covers the main dwelling, garage and any out buildings.
2. Contents insurance covers the cost of replacing furniture, carpets and personal possessions. Valuables such as art, jewels and furs may require additional coverage. Note that most contents are insured even outside the home, for example, if stolen while you are on a trip.
3. Liability policies insure against the costs incurred if, due to negligence, you are held responsible for an act causing injury or property damage to others.

Policies range from offering comprehensive to "bare-bones" coverage
You can save money by scaling down your policy, but be careful not to underinsure. Basically, there are two common types of protection.

1. Named Perils coverage provides coverage for specific basic perils outlined in the policy. This coverage is usually less expensive, but places more risk to financial loss on you.
2. All Risks coverage provides you broader coverage for normal risks to which your home exposes, except those which are specifically excluded, such as acts of terrorism or flooding.

There are three general policy categories from which to choose:

1. Basic/Named Perils policies which is the most basic policy you can buy, providing "Named Perils" coverage only for both your home/outbuildings and its contents.
2. Broad Form policies provide slightly broader protection, offering "All Risks" coverage on your home and outbuildings and "Named Perils" coverage on your contents.
3. Comprehensive policies provide the most thorough coverage available by offering "All Risks" coverage for your home/outbuildings and also your contents.

Regardless of which policy you select, some coverages can be increased and certain items insured separately. Your broker will be happy to sit down with you to review your coverage needs.

Take the time to understand what's covered and what isn't.
Don't assume that once you have a policy you are covered for everything. Ask us to explain the details.

Don't wait until it's time to make a claim to get a full understanding of how your insurance works.

The following definitions explain a few of the major building blocks of home insurance.

Acts of God
Acts of God are considered natural disasters that could not have been reasonably prevented or avoided. Most standard forms cover the perils of hurricanes and tornadoes. Lightning and hail are classified as named perils. Coverage’s for floods or earthquakes are not automatic in standard policies, but in most cases may be available for an additional premium. Flood or earthquake coverage is likely to be more expensive and difficult to obtain in areas susceptible to these perils.

Deductibles
Deductibles are the amounts you pay to cover a loss before you are entitled to payment by your insurer. Just about every policy has a deductible, usually ranging from $500 to $5,000. Deductibles are designed to discourage small claims, since the purpose of insurance is to protect you from catastrophic losses, not minor inconveniences.

Exclusions
Quite simply, exclusions are items, perils or situations that are not covered by your policy. Your insurer might exclude anything from long-term mould damage to natural disasters, computer data or high-speed watercraft. Other common exclusions include avoidable damage from termites or rodents, water seepage, frozen pipes, intentional damage and high value items such as art and jewelry.

Liability - in the home and away from home
Although liability insurance is part of your homeowner policy, it also protects against third party claims for bodily injury and property damage caused (unintentionally) by you when you are away from home.

Depreciation
Depreciation is a measure of the loss in value of an item over time resulting from wear or obsolescence.

Valuations
Your insurer will likely want to conduct a valuation of your home in order to set the right replacement value and coverage level. Unlike an appraisal, this does not determine the market value of the property, but rather the likely cost to rebuild the dwelling and other structures to original standards in the event of a complete loss.

Overcoming insurance-ese
Insurance involves technical terms that can be baffling. These terms help to make policies precise but don't always help to make them clear. Don't be afraid to ask your broker to explain terms that you don't understand.

Take the time to ensure that your most precious things are protected.

Most policies limit payments for certain items and categories
It is common practice for policies that cover personal property to have special limits on the amount that will be covered for specific items or items within specific categories. If you require the full replacement or market value to be insured, you will have to arrange for additional insurance and pay the appropriate premiums. The rationale behind this practice is to ensure that everyone is provided with a base level of insurance at reasonable rates and those with high value items cover their own extra costs. Examples include:

• Jewelry, watches, gems and furs
• Coin collections
• Silver and gold ware
• Money or bullion
• Business property

A thorough home inventory will tell you where you stand
One of the best ways to know if your belongings are covered is to do a complete inventory of your contents and review it with your broker. A home inventory will help you itemize your property if you need to make a claim, and it is a good way to test if your overall policy limits are adequate. You should include a list of contents, a brief description or photograph and an estimate of the replacement value of each item. Consider making a video of your rooms, cupboards and shelves and store it off-site. You can also take advantage of inventory tools such as the Home Inventory Form (Click here).

With a professional appraisal, you can arrange the extra insurance you need
If you have high value items that exceed the limits in your policy and you want to have them separately insured, you will probably need to have the items valued by a professional appraiser so that you know what limits of coverage to purchase. Depending on the type of property and how much information you can provide, an estimate of value can be determined. There is a fee for this service.

Knowing the value of the contents of your home is vital to being properly insured. We can help you find the tools and resources you need.

The short answer is yes, and the best way to know what is covered is to talk to your broker.

More and more people are starting home-based businesses, for everything from marketing homemade products to keeping a home office for a consulting business. From an insurer's perspective, this adds new types of risk to your home, and therefore, may require additional insurance.

Residential policies provide limited coverage on business property
Anything you use in running your home-based business is subject to the limits of insurance and/or might not be covered at all. Be aware that:

• Dollar limits apply on business property, computer and software. This limit might be as low as $2,000 in total, which would not cover even the most basic home office.
• Your policy might completely exclude any special equipment that you keep in your home for business purposes.
• Items that are covered for business use are only covered while in the home. So, for example, if the computer you use for your home-based business is stolen while on a trip, it will not be covered.

Some home businesses may require added liability insurance
The operation of your home-based business might mean that you have more people coming and going, and therefore, more risk associated with the activities in your home. If this is the case, not only will a basic liability limit of one million dollars likely not cover you, but also, some insurers might refuse to cover a third party claim by a customer or employee who is injured in your home. If you think this situation applies to you, be sure to tell your broker about your home business and make sure your insurance company is made aware of your home-based business activities.

Let us know
If you participate in a timeshare using your home, or you rent out your cottage, you should consult your broker. These activities represent an increase in liability and risk to the property and will more than likely require additional coverage.

Your insurer considers an unoccupied dwelling riskier than an occupied one.

Depending on how long you are away from your home, you need to make arrangements to ensure your dwelling is checked regularly, especially through the heating season. In some circumstances, you may need to inform your insurer.

When away for a short time
If you will be away from your home for fewer than 30 days, you do not need to inform your insurer. However, you do need to arrange for a competent person to look in on your home everyday or two to make sure that everything is in good order. If a deep freeze and/or a broken furnace results in exploding pipes and water damage that goes unnoticed for several days, your insurer could refuse to cover the costs if no one was looking in on the house.

For longer absences
If you are away for more than 30 days, your home is considered "unoccupied" because you plan to return. In this case, you should contact your broker to determine whether you will need to inform your insurer and obtain a special permit to leave the house empty. You will still need to arrange regular checks on the property, and you might want to consider draining water pipes and installing a good security alarm system.

If the property is empty
A fully vacant property is one with no occupants and no contents. This may occur if a house sale is delayed and the property remains vacant until sold. In this case, you need to obtain a vacancy permit from your insurer. This permit will maintain most of your coverage, except for risks associated with vacancy such as broken water pipes, broken glass or vandalism. These permits can be obtained for up to three months.

Traveling?
Personal items covered by your home, condo or tenants insurance are also covered when they are temporarily away from these locations, for example, when you are traveling. Items belonging to a dependent temporarily living outside your home to attend school, for example, may also be covered. Contact your broker to discuss how your policy addresses your situation.

Other items such as those used for home-business items, however, will require additional coverage