Mortgage companies in Canada require you to buy home insurance to cover the balance of your mortgage should your home need to be replaced or repaired due to fire or other damage. Here's what you need to know to help you find the right home insurance for you and your family.
You might be wondering how much coverage you need and what that will cost if you're a first time home buyer.
Home insurance is an insurance policy that you purchase to cover the cost of replacing your home and its contents in the case of a fire, damage or theft. Your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home, is also covered.
A comprehensive home insurance policy covers your home for all risks; except the ones that insurance policies do not usually cover, like natural disasters.
The specific perils that are set out in the policy are all that basic home insurance covers. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. A mix of comprehensive insurance and basic insurance policies is called broad home insurance.
How much coverage is necessary?
Your home-insurance policy should cover enough to entirely rebuild and furnish your home were it wiped off the map. Ask a home builder to walk through your home and give you an estimate of what it would take to rebuild; the amount of replacement coverage you'll need is based on that figure. Be sure to point out any unique and/or expensive details that would add to the replacement cost. Once you've determined the replacement cost of your home, you'll need to know what kind of coverage you want.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
Finally, liability coverage is important to protect you in case something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged.
What does it cost?
The cost of a home insurance policy depends on how much coverage is required, your chosen deductible, the location and other considerations. More coverage means more cost, as a general rule.
A deductible is the amount which you are required to pay against the full cost of the damage or repairs. You can choose to raise or lower your deductible when you purchase your insurance policy. In general, with a higher deductible, you have lower monthly premiums. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
You might be wondering how much coverage you need and what that will cost if you're a first time home buyer.
Home insurance is an insurance policy that you purchase to cover the cost of replacing your home and its contents in the case of a fire, damage or theft. Your liability for anything that occurs on your property, such as if a neighbour were injured or their belongings damaged while they're in your home, is also covered.
A comprehensive home insurance policy covers your home for all risks; except the ones that insurance policies do not usually cover, like natural disasters.
The specific perils that are set out in the policy are all that basic home insurance covers. It doesn't cover as many possible hazards as a comprehensive policy, so it's a cheaper option. A mix of comprehensive insurance and basic insurance policies is called broad home insurance.
How much coverage is necessary?
Your home-insurance policy should cover enough to entirely rebuild and furnish your home were it wiped off the map. Ask a home builder to walk through your home and give you an estimate of what it would take to rebuild; the amount of replacement coverage you'll need is based on that figure. Be sure to point out any unique and/or expensive details that would add to the replacement cost. Once you've determined the replacement cost of your home, you'll need to know what kind of coverage you want.
Inventory the contents of your home and all your personal possessions - if you have to file a claim for damages or theft, this helps ensure that you are completely covered and reimbursed.
Finally, liability coverage is important to protect you in case something happens on your property that would cause you to be financially responsible, such as if someone were injured on your property or some of their belongings were damaged.
What does it cost?
The cost of a home insurance policy depends on how much coverage is required, your chosen deductible, the location and other considerations. More coverage means more cost, as a general rule.
A deductible is the amount which you are required to pay against the full cost of the damage or repairs. You can choose to raise or lower your deductible when you purchase your insurance policy. In general, with a higher deductible, you have lower monthly premiums. It's important to shop around and ask your insurance representative if you have any questions or concerns, before you buy.
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