Buying a property may be your biggest investment, so how do you protect your property? Home insurance is a type of property insurance that you can purchase to protect your property and belongings.
It may not be something we think about every day, but the unexpected can happen to your home at any time, which is why having home insurance is so important. But home insurance isn’t always an option for people. Did you know that home insurance originated from “fire insurance”? As the name suggests, fire insurance was used to cover fires, but it has since evolved into “home insurance” because it now covers more than that. For example, you might ask? Well, let’s talk in detail. We’ve answered some of the questions you might be wondering.
Do I need home insurance?
Before we dive into all of your home insurance issues, let’s first state that for all the value a home provides, we strongly recommend that you get home insurance, even if the law doesn’t compel you to do so like auto insurance. Keep in mind that if you’re looking to buy a home, or you’re a homeowner who has taken out a home loan, your lender may require you to purchase home insurance first anyway. If you have home insurance, in the event of damage to your home or an accident in your home, you can avoid a significant amount of money spent on repairing damaged property and personal items. So while home insurance isn’t mandatory, it certainly plays a vital role in protecting what may be your greatest asset.
What is the coverage of home insurance?
Home insurance covers expenses in the event of an accident and/or accident on your home and belongings. This means that home insurance provides financial protection against losses due to theft, fire, wind damage, etc. In the event of an accident on your home, your standard policy can include coverage for the structure of the home, personal belongings, and additional living expenses (if repairs to your home render you uninhabitable due to covered damages). Home insurance covers more than just your home. This coverage also comes into play when someone is injured in your home, or you damage someone else’s property, or accidentally cause injury to someone else. In this case, your liability insurance will come into play, which is usually also included in the standard policy.
Let’s look at a few examples of what home insurance typically covers. Suppose you become the victim of theft and some of your valuable personal items are stolen. Depending on your policy, your home insurance will give you coverage based on the replacement cost or actual cash value of the stolen item (depending on your deductible, of course). Or, assuming you have suffered fire damage, your home insurance will cover repairs, reconstructions, or replacements of your home, depending on the extent of the damage and coverage limits.
Are there different types of home insurance?
Although different insurance companies may have different names for their coverage, there are several types/levels of home insurance to consider:
1. Comprehensive Insurance: This is the highest level of home insurance and the most common of the three. Comprehensive (also called “all risks”) insurance covers all damage to your home and property, but some exclusions will be listed directly on your policy.
2. Broad Insurance: This is mid-level home insurance that provides broader coverage for larger items such as the building itself, and will provide basic coverage for other items specified in your policy.
3. Basic coverage: This is the simplest coverage on offer, covering only certain items listed on your policy, usually for those with seasonal cottages or temporary residences. This insurance costs less than the two plans listed above; however, you do take on more financial risk if anything happens to your home.
What is not covered by home insurance?
Coverage varies from policy to policy, so it can be difficult to determine exactly which losses are not covered. TD Insurance’s home insurance products are comprehensive/all-risks coverage, meaning all risks are covered, except specific properties and exceptions listed in the policy. No matter which insurance company you choose, you should check your policy carefully for these exclusions. If you find that the coverage you want/need is listed as an exclusion from your policy, you can always check to see if you can purchase optional additional coverage for it with rider coverage. When in doubt, check with your insurance company for the required information.
Keep in mind that some exclusions cannot be included in your policy with riders at all. In such cases, you shall be solely responsible for making up for the loss. Most insurance companies have similar exclusions and generally include wear and tear, damage from pests ( such as rodents or insects), and acts of terrorism.
Your policy may also contain specific monetary limits and possible coverage limits for certain categories of items such as jewelry or wine. If you have particularly valuable personal items, you should review these restrictions to ensure proper protection. If you need additional coverage of your choice, please see our Valuables Insurance for more information.
How do I choose the right insurance for me?
Finding the insurance that best meets your needs may not be easy, as no single solution will fit all situations. TD Insurance can help you find the best coverage for you. We offer fully customizable packages that allow you to attach additional coverage to ensure your policy meets all your unique needs. Some examples of our add-on coverage include earthquakes, identity theft, and damage caused by water from outside the home entering the interior.
How much does home insurance cost?
Just as home loan repayments vary from homeowner to homeowner, so does the cost of home insurance. Your home insurance premium depends on a variety of factors, such as your ideal coverage and even the location of your home, among many other factors. And since home prices are expensive enough, we know you might be considering some low-cost home insurance options. But remember, cheaper is not necessarily better. Request a quote to better understand your home insurance costs.
