Home Insurance FAQ (Frequently Asked Questions)

There are several aspects that you need to consider when determining the value of Home Insurance coverage that you need as a home owner.

• Home rebuilding value: Home Insurance insurers rebuilding value of your home as opposed to a market value. It means that you need to make sure that an insurance limits are sufficient to ensure your home rebuilding from scratch including potentially an initial cleanup (e..g in case of a fire)

• Content value: A diligently done inventory will help you to determine  a value of your content. Several tools like this solution from Insurance Information Institution “Know Your Stuff” will help you to capture your inventory.

• Additional belongings: Such belongings as e.g. your bicycles, sport equipment (e.g. ski, snowboard etc) can be aslo covered by many home insurance policies even when being stolen outside of your premises. Thus you want to know their value as well.

• Valuable belongings: For many valuable items you will need to consider optional insurance and you surely need to ensure that you have enough coverage to insure them. These valuable items may include but not limited to China, silverware, furs, fine arts, rugs, art collections, wine collections, musical instruments, jewelries, expensive watches, precious stones etc.

If you are a renter, the major risks that you want to cover are associated with your content. Determining the correct value of your content through a proper inventory of your belongings can simplify your decision.

Sewer Backup is a special type of flooding that you can face in your home. Typically, the reason for it is an overflow of city / municipal sewage system when it can can not deal with inflow of water (e.g. due to melting snow, heavy rain falls etc) and thus sends water back to the houses. It can be a quite ugly event giving the fact that you get a lot of water into your dwelling mixed with dirt and bacteria. That typically requires a sophisticated cleaning and substitution of numerous belongings and home elements (e.g. carpets, furniture, floors etc). In many cases that would require an involvement of a dedicated restoration team.

New policy: It is very important to know that most policies do not include Sewer Backup Insurance and this coverage must be bought in addition to a home insurance policy. This coverage is also called Sewer Backup Rider and typically the costs are relatively low. It is highly recommended to get this protection for your peace of mind.

Existing policy: If you already have a home insurance policy, make sure that you review your existing policy or contact your insurer / insurance broker to find out if you have this type of coverage.

Given extensive flooding in the recent years, especially in Ontario and in Alberta, a sewer backup risk is quite tangible. Our home insurance reviews showed that many people suffered sewer backups and, unfortunately, some were thinking to be covered by a standard insurance policy. In this case, only a goodwill of an insurance company might help but in most cases insurer will not pay for your claim.

Yes! That’s the short answer, but you also need to know that condo insurance is a bit trickier because there are normally two policies involved – your personal condo insurance policy and a commercial condo insurance policy.

We will explain your insurance needs for the three condo scenarios:

1. You live in a condo that you own
2. You rent a condo / you are a tenant (condo is not yours)
3. You own a condo and rent it out

If your Home Insurance Premiums have increased, there can multiple reasons listed below.

You had a claim: If you have submitted a claim in the past, your insurer might consider you now a higher risk and thus adjusted your home insurance premiums. You should consider that sometimes it is better to repair small damages on your own rather than submitting a home insurance claim. That surely depends on your insurance company and sometimes an insurer can have a claim forgiveness rules in place ensuring that your rates do not increase after e.g. your first claim.

Consideration of inflation: Many insurers increase your dwelling limit every year by considering the inflation of the house rebuilding costs. Follow up to ensure this adjustment is in line with reality and that you are not overpaying.

Increased limits: If a policy holder increased home insurance policy limits e.g. for particular interior updates or increased content coverage, you can experience a premium increase.

Reviewed pricing: Sometimes insurers tend to review own rates and can increase rates based on their updated risk models. Often it is a case after large natural events such as e.g. flooding or hail. For example, some insurers increased their home insurance rates, based on customer feedbacks, after flooding events in Alberta and Ontario.

Another aspect that needs to be carefully tracked is changes in coverage. Some insurers prefer rather than increasing rates, decrease home insurance coverage and we have reports of insurers drastically reducing e.g. insurance limits for sewer backups after large flooding events.

Your Home Insurance claim may impact your future Home Insurance Rates since your insurance company may consider you a higher risk after your claim. It should not be always the case but based on many feedbacks of InsurEye users, many of them experienced premium increases after their claims. Nevertheless, some insurers may offer special conditions such as claim forgiveness for those who e.g. had the first claim.

For the small claims, the best strategy would be to understand if you can deal with case on your own, e.g. repair instead claim and submit claims only for the major issues. You also need to consider that in most cases you will be required to pay deductibles first and only afterwards insurance coverage kicks in. It means that if your deductibles are high (e.g. $2,500 or $5,000), you will need to pay a significant amount.