How to Choose Home Insurance Coverage in Canada

March 22nd, 2016  |  Home Insurance

how to choose home insurance policyAlthough your neighbour’s house might look identical to yours, the older it is, the more likely it is that it’s vastly different from a value point-of-view. In the insurance world, with so many little nuanced things that can affect quotes and coverage, it’s important to find the quote that’s right for you. Here’s how to choose your home insurance coverage in Canada:

What do you need?

Basic insurance coverage will get you just that: basic coverage. However, if you’ve got a finished basement or live in an area that sometimes experiences hail or flooding, you’ll probably want to purchase additional home insurance coverage.

Start by making a list of everything you want covered under your home insurance policy. Expensive assets like jewellery or art will need additional insurance coverage as well so keep that in mind. Next, make a list of the security features your home has. Small things like carbon monoxide detectors and alarm systems can quickly add up to big savings as you choose home insurance coverage.

Shop around

A big mistake that homeowners make when they choose home insurance coverage is to go with the first broker they find. Because home insurance policies vary so much from one company to the next, it’s important to get multiple home insurance quotes from multiple companies.

Some companies will try to sell their clients on multi-product insurance, where the customer can save money by bundling different insurance policies into one payment. This is not necessarily the best financial move, unless each of the policies has a fair price and covers everything they need to cover.

Once you’ve chosen an insurance company and policy, double-check that it has everything you asked for before signing. While bait-and-switch tactics are illegal, nobody’s perfect and it’s possible that a mistake has been made. At renewal time, shop around again to make sure that your policy is still the best one for your situation, and that the price is still competitive with other companies.

Understand the policy

Never wait until you need to make a claim to read your policy. Insurance policies can be complicated, so ask your insurance broker questions if you don’t understand. If you see that you’re only covered up to $10,000 in replacement costs but have $20,000 of assets in your home, go back to your insurance company and modify your policy.

The same principle applies if you’ve forgotten something. Say you buy your home in October. In spring, when the snow starts to melt you realize that you didn’t think to include water damage coverage in your home insurance policy! Luckily, add-ons to existing policies are easy to do, meaning that homeowners have no excuse to not keep their policies up to date.

Don’t be like most homeowners. Many homeowners purchase basic home insurance, never read the policy, and don’t update it. Then, when disaster strikes, the homeowner is horrified to learn that their policy isn’t nearly as comprehensive as they believed, or that their deductible is unaffordable. Stay aware, modify as needed and don’t be afraid to shop around for the best home insurance coverage.

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