In the past, the biggest threat to your house was fire. Today, different ball game. There are ways to combat against the risk of fire - hydrants, smoke detectors, and awareness. Even building materials are more fire resistant than they were once upon a time.
Nowadays, Weather is Enemy #1. The Insurance Bureau of Canada says extreme weather events that used to happen every 40 years, can happen every six years or so today, impacting home insurance premiums. (Flooding in Alberta, and now Toronto, are only the most recent examples.)
Here are 5 things to know about Home Insurance:
- Insurance covers replacement value
Home insurance covers the cost of repairing or rebuilding your home, including demolition, if needed, contractors, building supplies, and many other input variables. This replacement value is often much different from the market value of your home, or your municipal tax assessment value.
2. Renters can get insurance too
Tenant's insurance is often purchased to protect your valuables and belongings when you rent. It also protects renters if someone gets hurt, or if property is damaged as a result of your negligence.
3. Sewer backup not automatically covered
As a lot of homeowners in Toronto have discovered this week, homeowner's policies often do not cover sewer backup. (The coverage is optional, and costs extra.) If flood waters come in through the window, you may be covered. If the water comes up through the pipes, you may be out of luck.
4. Extend coverage for valuables
Homeowner's insurance policies usually include coverage limits for jewelry, fine art, and collectibles. If you have valuables, consider having them appraised, and buy an extra rider for their protection.
5. Severe Weather
Damage caused by severe weather has emerged as the leading cause of property insurance claims, exceeding fire damage in some regions of the country. (Water and wind damage claims account for more than half of all property claims.)