Homeowners Insurance
Information Page
If you own your own
home, then you'll want to protect not only your physical building,
but all the things that are in your home too. A standard home
insurance policy will ensure that if something like fire, vandalism
or theft occurs, then you will be properly looked after and
your valuables will be replaced.
You also need to
think about protecting any other structures that exist on your
property, like a detached garage. And, in the event that your
home is damaged, and you need to move out for a while, you may
want to consider investing in insurance that will help pay for
out-of-pocket expenses like hotel rooms and food.
As a homeowner, it
is possible that you may be held liable for accidents that people
have while on your property. What's more, you may accidentally
damage other people's belongings either in your own home, or
somewhere else. A well-structured home insurance plan will make
sure that you're covered for any of these unforeseeable events.
Tenant or
renter's insurance
If you're moving
into your first apartment, you might think you don't have anything
of real value. A CD player, computer and some clothes may not
look as if it's worth much, but when you have to replace it
with something new, it could break your budget. Say you've bought
a computer on credit and it's destroyed by fire or stolen. You're
still responsible for paying the balance to your creditor, even
though you no longer have the item.
As a tenant or renter
in someone else's building, it's a wise decision to take out
a tenant insurance policy. It protects both your contents and
your liability exposure. You see, as a tenant, you're responsible
for harm you might cause to any part of the building you live
in, or to others who live or visit there. If you forgot to turn
off the water in the bathtub while you're talking to your friend,
you could flood out your neighbours. You would be responsible
to repair any resulting damages.
Other things to consider
Tenant's improvements coverage is also important. If you've
made improvements to your rental unit -- like new broadloom,
painting or sound systems -- they might not be covered in a
standard tenant insurance policy. Improvements coverage would
be a smart investment.
There are lots of
other insurance options, too. As a tenant, your insurance policy
coverage can be either All Risk or Named Perils. There's protection
against Sewer Backup and Earthquake. And you may want to add
extra coverage for specific contents in your home, such as jewellery,
furs, cameras, and bicycles. You'll find more details on all
of these options in this home insurance basics section.
Condominium
insurance
When you purchase
a condominium, you own your "unit" and own a share
in the common areas of the condominium -- the roof, basement,
elevator, heating room, lobby, swimming pool, parking garage,
or garden. As a condominium owner, you may be held responsible
for harm you might cause to any part of your building, or to
others who live or visit the condominium complex. A condominium
insurance policy can remove some of the financial worries of
condominium ownership.
You'll need two separate
policies to protect your investment.
Your own insurance policy. The insurance policy provides coverage
for your personal property, structural improvements to your
unit and additional living expenses if you are the victim of
fire, theft or other disaster listed in your policy. You will
get liability protection to protect you for harm you might cause
to any part of the building you live in or to others who live
in or visit the condominium complex.
An important feature
of your own insurance policy is loss assessment. As a condominium
owner, you share responsibility with others in your building
for common property. Loss assessment protects you from damage
to these common areas. See the Loss Assessment section for more
details. A "master policy" purchased and provided
by the condominium board. This covers the common areas you share
with others in your building like the roof, basement, elevator,
heating room, lobby, swimming pool, parking garage, or garden
for both liability and physical damage.
Sometimes the condominium
corporation is responsible for insuring the individual condominium
as it was originally built, including standard fixtures. In
this case, you'd only be responsible for insuring your personal
property and any alterations you or a previous owner have made
to the original structure of the condominium like remodelling
the kitchen or bathtub. In other cases, the condominium corporation
is responsible for insuring only the bare walls, floor and ceiling.
You'd be responsible for insuring your personal property, plus
things like the kitchen cabinets, built-in appliances, plumbing,
wiring and bathroom fixtures. Take the time to find out what's
included in the condominium corporation's policy. You can then
decide what to include in your personal insurance policy.
Limitations
in property policy coverage
Your standard property policy will have limitations in theft
coverage for jewellery and furs, silverware, business property,
bicycles, money, boat and motor. If you own any of these special
items, it's a good idea to consider adding additional coverage
to your policy.
Paying a
property insurance deductible
When you make a claim, a small portion of the claim is always
paid by you first, then your insurance company pays the rest.
The portion you pay is called your deductible. The amount of
your deductible affects the price of your insurance policy.
The higher your deductible, the less the cost of your insurance
premium.
Standard
Home Coverages
Building coverage
All risk coverage insures your building for the most common
types of losses. When you have All Risk coverage , your building
is insured for everything, unless it's specifically excluded
from your policy (e.g. intentional damage to your own property
would not be covered).
Named-Perils coverage
includes a list of the most common types of things covered under
your insurance. Named-Perils includes fire, theft and water
damage. Everything is listed very clearly in your policy booklet
so you have a complete and thorough understanding of what your
insurance policy covers.
Named-Perils building
coverage is very rare. After all, your home is probably the
largest investment you will ever make - why would you not want
it fully protected?
Contents
All-risk contents coverage insures your belongings inside your
home for the most common types of losses. When you have All
Risk coverage, your contents are insured for everything, unless
it's specifically excluded from your policy. Named-Perils coverage
includes a list of the most common types of things covered under
your insurance. Named-Perils includes fire, theft and water
damage. Everything is listed very clearly in your policy booklet
so you have a complete and thorough understanding of what your
insurance policy covers.
A standard home policy
provides for the Actual Cash Value (ACV) replacement of your
belongings. This means you only receive the value of the item,
less depreciation. For example, if you purchased a TV 5 years
ago for $500, you might only get $100 for it if it were destroyed
in a fire. Even though it may cost you $600 to replace that
same TV today, your insurance would still only give you $100.
Many people choose to add the Replacement Value option to their
contents coverage. Replacement value coverage means that the
contents of your home are insured for the amount it costs to
replace them. When you replace the item(s) with a similar kind
and quality, within a specified time, the insurer will pay you
what it cost you to replace the item(s) not what they were actually
worth in their used state. This means if your 5 year-old TV
was lost in a fire, you would get the full amount it would cost
to replace it, even if that is more than you paid for the TV
in the first place.
Detached
private structure
This type of coverage applies to structures that exist on your
property, but that are not connected to your primary residence.
For instance, a detached garage could be included under this
coverage. There is usually a certain limit assigned to this
kind of coverage, but you can always increase that limit by
purchasing additional coverage options.
Additional
living expenses
If you are forced to leave your home because of a loss, this
coverage pays for your reasonable and necessary expenses to
temporarily live away from home. Hotel and food costs are the
type of expenses that would be covered under such circumstances.
There is usually a limit on this kind of coverage.
Personal
liability
Liability is a legal responsibility. Liability insurance protects
you from having to pay damages to people, if you've been found
responsible for unintentionally injuring them or damaging their
property.
Here are some examples:
If someone injures himself/herself on the property you occupy,
you may be responsible for damages. For example, if someone
slips on your front steps, breaks his/her leg, and can't go
to work, you could be held responsible for the person's lost
wages.
If you or a member
of your family damages another person's property, you may be
held liable. So if your son accidentally throws a baseball through
the neighbour's window, and breaks an expensive antique, you
may have to pay.
The beauty of liability
insurance is that it protects you anywhere in the world. Say
for example, if your golf club accidentally flies out of your
grip on a Florida golf course, strikes and injures another player.
Liability insurance would cover this accident.
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