You never know if and when something will happen — whether it’s a big catastrophe or something less destructive – so you need to be prepared!
It’s essential to choose the right company, the right price, and the right coverage for your specific situation.
Keep in mind, homeowners insurance is really a collection of different kinds of coverage such as fire, theft and liability wrapped up into a single policy.
Whether you’re a current homeowner who may need to upgrade your coverage or a potential new buyer who is purchasing home insurance for the first time, review these steps so you have the right coverage for YOU:
How Do You Determine Coverage?
Your coverage should be based on the square footage of your home, but it must also factor in how much it will cost per square foot to rebuild in case of disaster.
Your insurance company will most likely require you to purchase coverage that insures 80% of the replacement value of the home.
Be sure to take into consideration everything that you have inside the home, which will also need to be replaced in the event of disaster.
Do You Have Enough Coverage?
Get current information about what your home is worth today, and how much it would cost to rebuild it.
Make sure that your deductible is set at a price that you can afford in the event that you must rebuild or do extensive repairs to your home.
If you’ve got a special art collection or a home office with equipment and supplies, you should be sure to let your agent know so that they can inform you about any additional riders that might be necessary.
What About Flood Insurance?
Being covered for the water damage from a flood in your basement is different than having flood insurance. Talk to your insurance agent about the difference and make sure you’re covered if you end up with water in your basement, which is unfortunately very common in this area.
Because of the 2013 floods in Calgary, flood insurance may or may not be available in your area. It’s very important that you understand how a home was affected by those floods (if at all) before purchasing it.
Do You Need to Upgrade?
For current homeowners, meet with your insurance agent to discuss what coverage you have now and let them know about any new home improvements or any new possessions that should be included in your policy.
Your agent will come out and document these upgrades, take photographs, and let you know if you will need additional coverage.
Condo ownership and insurance
Condo ownership and insurance is a bit more complex because there are two levels of insurance to consider: your own homeowner insurance, and the insurance coverage for the condo corporation itself. Condo owners need to be aware of what your condo corp’s bylaws specify in terms of the buildings insurance and your own homeowner insurance. You will also need to be aware of a line item called “betterments and improvements”. The condo corporation’s insurance may cover the cost to rebuild your unit back to it’s “original state” or however it is described in the bylaws (if for example if the building incurred a major fire or flood). However, they likely will NOT cover betterments and improvements to your unit. For example, if your building is older, and your unit has been renovated, your insurance will need to be high enough to cover the cost difference between an original unit and your updated unit.
Also, should something occur in your unit that you are deemed at fault for- such as flood or fire- that causes damage to common property in the condo, or another unit, your insurance will need to be high enough to cover the deductible of the condo corporations insurance. Speak to your real estate agent, condo board, property manager or insurance broker to get more information on this!
