Types of Home Coverage

Homeowners insurance covers the property, contents and personal liability of you (the policyholder), your spouse or partner and your children (age limited).

The policy also covers:

• Relatives of you or your spouse who are living in your household

• Dependents under the age of 21, who are students either living in the household or temporarily living away from the insured principal residence

Coverage is broken down into two main parts – personal property and personal liability.

1. Personal property
   
   If you own your home, your home insurance policy will cover the building, contents and outbuildings (shed, detached garage, etc.) on the property, with some limitations.
   
   For insurance purposes, the amount required for your building should correspond to what it would cost to replace in the event it is completely destroyed. The replacement value of your home may differ from the market value and municipal tax assessment value.
   
   To determine your home’s replacement value, your insurance representative will need to know basic information about your home: age, size or area (square footage and number of storeys); type of construction; type roofing; type of heating; number of fireplaces or woodstoves; any unique features (custom built appliances, swimming pools);
   
   For other rating purposes your insurer needs to know:

   • the distance from the nearest fire hydrant and responding fire department (municipal or volunteer);

   • any security measures within your home (alarms or smoke detectors); and

   • any other structures on the property (detached or attached garages, sheds, etc.).

   
   With these details, your insurance representative can calculate your home’s estimated replacement value and ultimately, the building coverage limit on your policy and the premium.
   

2. Personal liability
   
   The personal liability portion of your home insurance provides coverage in the event someone is injured on your property or your actions, anywhere in the world, cause injury or property damage to others.
   
   For example, if a visitor were to be injured by slipping on a snow-covered walkway on your property, you may be held legally responsible. If you were found negligent, the personal liability portion of your home insurance would cover the damages resulting from the injury up to the coverage limit. No deductibles typically applies.
   
   Liability coverage does not apply to injuries sustained by you or members of your own household

Condominium (known as Strata in British Columbia) insurance coverage is provided by two separate policies:

It’s important to know that the condo/strata corporation’s policy does not cover your: personal contents, improvements to your unit, or liability.

1. A condo/strata corporation’s insurance typically covers:

   • The buildings shown on the condominium plan

   • Common property such as hallways, stairs, the roof, pools, garages, driveways

   • Fixtures built or installed as part of the original or standard construction such as flooring and wall coverings, lighting and plumbing fixtures

   • Condominium assets such as furniture and equipment

   • Liability for claims of property damage and bodily injury suffered by others as a result of the corporation's actions.

2. A unit owner’s policy typically covers:

   • Personal property such as clothing, appliances, furniture and items stored in a locker

   • Additional living expenses you incur in the event you have to move out due to an insured loss

   • Personal liability for any bodily injury or property damage you unintentionally caused to others

   • Upgrades and improvements– hardwood flooring, custom counters – made by you and previous unit owners, up to a stated limit

   • “Contingency” coverage in the event the corporation’s insurance is insufficient

   • “Loss assessment” coverage pays your share – up to a stated limit and may be subject to a deductible – of major property and liability losses on common property that may exceed the condominium corporation’s policy limit

   • Some optional condominium or strata coverages include:

     • “Owner’s increased improvement” covers unit upgrades that may exceed standard condominium corporation insurance limits

     • “Earthquake” covers property contents and additional living expenses while your home is being repaired

     • “Sewer backup” covers replacing and decontaminating personal contents after the backing up of sewers and drains or a sump pump failure

     • “Overland water/flood” covers damage caused by water entering your unit from heavy rain, spring thaw or a lake or river overflowing

   
   Most home, condo/strata and tenant personal property insurance policies cover the cost of alternate accommodations and living expenses for people whose unit becomes unliveable due to an insured loss. Under certain circumstances, there may also be limited coverage for mass evacuation. Ask your insurer about what claims fall under additional living expenses or ALE.

Tenant’s insurance covers your possessions in your apartment and while you’re away. Having personal liability insurance is typically a legal condition in a lease. Tenants may be liable for any damage they cause to the building or unintentional harm caused to others who live in or visit the property. Your insurance representative can explain the different levels of insurance coverage you can choose and can help you find coverage options. It’s important to know that:

• “Personal liability” covers up to the limit chosen for any amount you'd have to pay someone who successfully sues you and the cost of defending you in a lawsuit. You can often increase your liability limit

• Tenant insurance also includes “Additional living expense” coverage which pays, in certain circumstances, for unexpected expenses when you cannot live in your apartment due to a covered loss, but is subject to certain limits

• You can choose to insure your contents – such as clothes and most household items – for:

  • “All risks” except those specifically excluded

  • “Named perils” covers only perils that are specifically stated

Are you a Residential Landlord? (PDF)

You can typically add your vacation home as a secondary or seasonal location on your existing policy. Or it can be insured with a separate property policy. How often it’s used and if you rent it out – either short or long term – must be disclosed to your insurer. It’s important to know that:

• Coverage may be limited to “Named perils” due to the risks associated with part-time occupancy. Some specifically listed perils such as fire, explosion and smoke damage among others are included.

• “Comprehensive” or “all risks” may not be available

• Losses related to sewer backup and damage or loss of fences, food in a freezer, garden equipment, outdoor plants, trees and shrubs are commonly excluded (not covered) for secondary or seasonal properties

• Third party liability coverage is typically extended from your principal home's policy to your secondary or seasonal property to protect you if someone is hurt on your property or if you cause damages to others' property

• Every policy has limits for watercraft. Ask your insurance representative about what’s in your policy and available additional coverages.

Owning a heritage property is an investment in Canada’s history. Your home’s replacement cost – what it would cost to rebuild – includes time for planning approvals as well as repairs that may involve speciality contractors and building materials. Be proactive to ensure your heritage property is well protected and keep these tips in mind:

• Shop around. Find an insurance representative who understands the specific risks associated with a heritage property

• Reduce risks. Protect your property and reduce the chances of making a claim

• Maintain detailed records and photos and share them with your insurance representative. Comprehensive property information – such as applicable bylaws, type of historical designation, planning requirements, updates and maintenance records, unique features, etc. – enables your insurer to accurately assess your risk

• Buy enough insurance. Guaranteed replacement cost coverage – the full cost to replace your property – may not be available for a heritage property even as a policy add-on. It’s your responsibility to purchase sufficient coverage to meet any heritage regulations

Learn more:

Heritage Properties: Insuring the Living Past

Heritage Property Risk Prospectus

Rented properties face different risks than owner-occupied homes. In addition, landlords and tenants have different rights and responsibilities than personal homeowners. If you plan to rent your primary or secondary property for a long or short term, contact your insurer first. Failing to do so can void your coverage. Your insurance representative will help you secure adequate coverage options.

• Are you a Residential Landlord? (PDF)

This applies to coverage for both the building and contents. Insured perils include:

• Aircraft or vehicle impact

• Electrical current

• Explosion

• Falling object (excluding objects propelled by snowslide or earth movement)

• Fire

• Lightning

• Riot

• Smoke (released suddenly from malfunctioning cooking or heating devices, but not from fireplaces)

• Theft

• Transportation (of personal property while it is temporarily away from your home, including fixtures and fittings being repaired or in seasonal storage)

• Vandalism (where building is normally occupied)

• Water damage usually includes damage arising from sudden and accidental escape of water from an indoor plumbing, heating, sprinkler or air conditioning system; or from an indoor or outdoor “domestic appliance” on your premises; or from a water main. Coverage for overland flooding or sewer backup may be available as an optional add-ons to your policy. Speak to your insurance representative regarding the specifics of your policy.

• Wind and hail (applies to the exterior of the building excluding antennas and satellite dishes; interior of building is covered if the storm has first created an opening)

• Window breakage (in a building that is normally occupied)

A home insurance policy is not a maintenance contract. Predictable events such as flooding of a home built on a flood plain, or preventable events, such as frozen indoor pipes, are not covered.

Excluded perils generally include:

• Landslides, earthquakes and other earth movements. While this is not covered on a home policy, damage from a fire or explosion caused by earth movement would be covered. Coverage for damage caused by an earthquake may be purchased as additional coverage.

• Damage arising from the freezing of indoor plumbing. This is generally regarded as preventable. If you’re away from your home for more than four days during the normal heating season, you must drain the plumbing or have your home checked regularly or daily to ensure that heat is maintained. If freezing-related damage were to occur and such precautions were not taken, it would likely be excluded.

• Damage from freezing outside the home. This is not covered, nor is melting or moving snow and ice, and heaving frost. Additional coverage for damage caused by roof ice damming may be available for purchase.

• Direct damage resulting from intentional application of heat (e.g., clothing shrunk by a clothes dryer, burned by an iron). This is not covered. However, if the dryer were to set the clothing on fire and the flames spread to the room and its contents, the resulting damage would be covered.

• Damage by insects and rodents. This is excluded; some policies may make an exception for damage to building glass.

• Pollution

• Damage to property acquired illegally

• Losses caused by criminal or intentional acts by the policyholder

• Losses due to war, terrorism, nuclear risks