If you can imagine it then there is always a chance it could happen. If you can imagine a car driving through your living room, not only can this happen, it has happened. This is home insurance is so important. The simple truth is that there are things to consider that will impact what kind of home insurance to buy.
In Canada it is not a requirement to have home insurance on your home, but if you are carrying a mortgage on it the company you have your mortgage with will require that you have home insurance. If you think about it, why would you not have insurance on the biggest asset you own.
Now saying that one thing to remember is that not all home insurance policies are equal and in this article we will go over the differences so that you can have a better idea what kind of policy is better for you and your situation.
The best option if you are wanting to protect your house and the things inside it is a Comprehensive Insurance. Of course this type is the most expensive but it covers the most of the types of policies we will cover here. Typically both your house and its contents are protected unless what happens is classified as a “Peril”. A peril is an exclusion to your policy, and all policies will have some perils or items/occurrences that are not covered.
Some perils can include the outbreak of war, intentional damage, flooding from a body of water, landslides, terrorism, earthquakes and damage from the freezing of internal plumbing. In some cases you can purchase additional policies to cover a specific peril and you should consider this and speak to your insurance broker about your options.
A Broad Insurance policy gives you the same coverage on your physical house as a Comprehensive policy. The main difference is that your contents coverage is reduced to a “Named Perils” type of coverage. What this means is that your contents are only covered under the list of perils contained in your policy. The list of perils can be quite broad and it depends on the policy and many of the common perils like fire and theft are normally listed in a Broad policy.
However if what damages your contents is not listed, like a racoon getting into your house and shredding your mattress, it will not be covered like it would be in a comprehensive policy.
Due to this decrease in coverage a Broad policy is cheaper than a Comprehensive policy.
A Basic policy takes the “Named Perils” type from the contents of a Broad policy and applies it to everything in the policy. Basically, you are only covered for your home and contents to the listed perils in the policy.
This type of insurance is good if you wish to lower your premiums and are willing to have some financial risk. A Basic policy is also good for a second home or a much older building.
No Frills Policy
This type of policy is specifically for houses that have some kind of issue that would make them unable to get one of the previous listed policy types. A house that was bought as a fixer-upper and is in the middle of renovations would be a good example for this kind of policy.
AMC Insurance is your one stop for all your insurance needs. To find out more, visit our website or call us today.