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How to Buy Home Insurance Hero image

How to Buy Home Insurance

Buying or renewing home or condo insurance? It’s important to have adequate property insurance to protect against serious damage, destruction or liability. Learn how to buy home insurance coverage in Canada.

Understanding home and contents insurance

If you’ve suffered loss or damage to your home or personal property, home insurance protects you from having to pay to replace your home and everything in it all at once, often after a very difficult and emotional event.

When you’re buying or renewing your home insurance work with an insurance professional to understand what coverage best suits your needs. Insurance brokers work with multiple companies and agents represent a single insurer. Your insurance representative can help explain to you the different types of coverage available, the optional coverages you can add to enhance your protection, any discounts that may be applicable and help determine a deductible you will pay if you suffer a loss.

When you’re buying home insurance, consider these tips:

  1. Buy enough coverage. Trying to reduce your premium by underestimating the replacement values can leave you unable to replace your home and contents after suffering a major loss. Optional coverage such as Guaranteed replacement cost coverage permits you to rebuild or replace your property, even if the damage exceeds your policy’s limits.

  2. Consider the risks where you live. While fire is covered under most home insurance policies, your area may be at an increased risk for other types of damage caused by events such as overland floods or even earthquakes. Flood and earthquake are optional coverages that you can typically add to an existing home policy.

  3. Make sure you review your home inventory each year when you renew your policy. Most homeowner’s policies cover contents up to a specified percentage of the total insured value of the home. For high-value items such as jewellery or fine art, consider a separate endorsement that adds extra coverage for specific item(s), otherwise coverage for such valuable items may be capped at a certain amount.

Know what’s covered

It’s important to select a policy that suits your specific needs. Home insurance covers the dwelling, contents and personal liability of you (the policyholder), your spouse or partner and your children. The policy also covers:

  • dependants under the age of 21

  • dependants who normally live in your home, who are students temporarily living away from home, while enrolled and attending a school, college or university

  • additional living expenses if you’re temporarily unable to live in your home due to an insured loss in certain circumstances

Know your policy obligations

Home insurance isn’t mandatory by law. However, before lending you money to buy a house, most banks or mortgage lenders will require you to:

  • purchase home insurance coverage

  • name them as a mortgage lender on your policy

  • provide proof of home or condo insurance purchase

Reporting any material changes to your property during the policy period is also your responsibility. Contact your insurance representative before you:

  • renovate or make upgrades

  • install a pool or spa

  • set up any home-based business, such as a daycare

  • rent or lease all or a portion of your property