Insurance: Have you got the coverage you need? Can you get the coverage you want?
 By Chris Ashley
February 18th, 2025
BURLINGTON, ON
| Home insurance protects your most valuable asset – your home. With various coverage types and exclusions, it’s easy to overlook potential gaps. This guide will help you understand the basics and ensure you have the coverage you need for peace of mind.
What Does Home Insurance Typically Cover?
Most standard home insurance policies cover the following:
- Dwelling Coverage: Protects the structure of your home, including walls, roof, and built-in systems, from damage caused by covered events like fires, storms, or vandalism.
- Personal Property: Covers personal belongings, such as furniture, electronics, and clothing, up to a certain limit.
- Liability Protection: Provides coverage if someone is injured on your property or if you accidentally damage someone else’s property.
- Additional Living Expenses (ALE): Pays for temporary housing and living expenses if your home becomes uninhabitable due to a covered event.
Common Gaps in Coverage
While home insurance covers a wide range of risks, there are some situations that might not be included:
- Floods and Earthquakes: These are typically excluded and require separate policies.
- Wildfires in High-Risk Areas: Standard policies usually cover fire damage, but if you live in a wildfire-prone area, you may need supplemental coverage.
- High-Value Items: Jewelry, art, or collectibles may exceed personal property limits.
- Maintenance-Related Damage: Issues like mold, pest infestations, or gradual wear and tear are typically not covered.
How to Assess Your Coverage Needs
- Know Your Home’s Value: Ensure your dwelling coverage reflects the cost to rebuild your home at current material and labor prices, not just its market value.
- Evaluate Your Belongings: Take an inventory of your possessions to ensure your personal property limit is adequate. Many insurers offer apps or tools to simplify this process.
- Consider Local Risks: If you live in an area prone to wildfires, flooding, or earthquakes, explore specialized coverage options.
- Consider Liability Risks: If you have a pool, trampoline, or frequent visitors, you may need higher liability limits or umbrella insurance.
Tips for Filling Coverage Gaps
- Supplement for High-Risk Events: Purchase separate flood or earthquake insurance if needed. In wildfire-prone areas, ensure you have enough fire insurance and explore extended replacement cost coverage for rebuilding.
- Review Deductibles: Check if your policy has a separate deductible for fire, wind, or other high-risk events. Adjust if necessary.
- Upgrade to Replacement Cost Coverage: Opt for policies that pay for the full cost to rebuild or replace damaged items, rather than factoring in depreciation.
- Consider Personal Property Riders: Add riders for expensive items like jewelry, electronics, or equipment.
- Add Home Business Coverage: If you run a business from home, standard policies may not cover related equipment or liability. Look into additional coverage options.
How to Save on Home Insurance
- Bundle Policies: Combine home and auto insurance with the same provider for a discount.
- Increase Your Deductible: A higher deductible can lower premiums, but ensure it’s an amount you can comfortably pay out-of-pocket.
- Improve Home Safety: Adding fire alarms, security systems, or storm shutters can qualify for reduced rates.
- Shop Around: Compare quotes from multiple providers to find the best rate for the coverage you need.
Home insurance is not a one-size-fits-all solution, and your needs may change over time. Regularly review your policy to ensure it provides adequate protection for your home, belongings, and lifestyle. |
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I am writing this with the help of my insurance broker husband. So this is written by a non insurance professional.
The article says compare quotes from multiple providers. That is good advice. But the implication taken by most people is compare the prices. Price should not be the only determining factor. Nor is it necessarily the most important!
If you are not an insurance professional how are you going to be able to compare the coverages provided by each provider.
In Ontario the Provincial Government sets a mandatory policy to be used by every insurance company that provides auto insurance. The landscape is very different in the home insurance space. Each home insurance company provider issues its own proprietary policy. So coverages provided vary from one insurance company to the next.
Did you know there are different types of water damage/ flood coverages each addressing a specific exposure – burst pipes, overland flood, rising water level, and sewer/water back up. Does the quote you are looking at cover one, two, three, four or none of those exposures?
Falling trees. Generally the cost to remove a fallen tree from your property which has caused no damage to your property is not covered. If though the fallen tree has damaged your property, there likely is some coverage for the cost of removal. How much coverage is provided can vary from one insurance company to another. Some insurance companies, the better ones, cover the cost of removal of the entire tree. Other insurance companies may only cover the cost of the removal of that part of the tree which has damaged the property. For example, if the tree is 100 ft tall and falls on your property, but only 10 ft of the tree is actually on and damaged the property, the insurer may only cover 10% of the cost of the tree removal. See the difference?
There are generally two types of insurance company providers. Those known as direct writers and those who work through brokers.
A direct writer such as TD, RBC, CAA and Desjardins only take business directly from the homeowner.
Insurance companies such as Chubb, Zurich, Intact and Aviva only accept business through their broker networks.
A broker Is a licensed qualified professional knowledgeable in the insurance business who acts as your representative in negotiating terms with insurance companies. The broker knows the ins and outs of each insurance company’s policy and will advise you on the subtle differences.
Buying a policy from a direct writer means you need to be your own broker. But how can you be. As say a fireman, an office worker, a lawyer, an accountant, a retail worker what expertise do you have to compare one policy against another. The answer is you have no expertise.
The role of the broker is to represent the homeowner in arranging the best possible coverage available at the best possible price. Additionally, should you have the need to claim on the policy, the broker is there to represent you in negotiating with the insurance company during the claim process. As in the purchasing of a policy from a direct writer during the claim process, you are on your own negotiating yourself with the insurance company.
Generally insurance companies have a well-earned reputation for not wanting to pay claims. So it’s always best to have somebody who knows how to deal with insurance companies act on your behalf.
Please note there are two terms used which the general public confuses as being the same. The one is broker. The other is agent.
A broker has the ability to access a number of different insurance companies. An agent can only access the one insurance company it represents. Note the agent works on behalf of the insurance company not on your behalf.
So your first step in my opinion should be to find the best broker to represent you. How to do that? Like finding a contractor or a lawyer or an accountant ask friends and relatives for a referral. That is the real shopping that you as a homeowner need to do.