Property Insurance

A winter storm gone bad. One too many rainy days, and there’s water damage. The possibility of a fire burning your home down: all these events, though unlikely, are possible.

Home insurance can protect you from the financial burden caused by damage to your home, but it’s not limited to natural accidents. Depending on what you’re looking for, certain insurance policies will also cover your home in the event of a robbery, a fire, and legal liability. 

So, what exactly is home insurance, and what does it cover? 

The standard home insurance policy insures your home’s structure and your belongings, and most policies also cover any legal liabilities resulting from an accident that happens on your property. 

Most typical policies cover:

Personal property

(including structures, and personal possessions). 

It’s a good idea to grab your iPhone once a year and shoot a video in all the rooms of your home showing your contents.  This could be super helpful if, in the unfortunate event of a fire, you lost all your belongings.

Liability coverage

Meaning that if you have a friend over and they fall on your driveway, and later decide to sue you (not a very nice friend) your costs would be covered.

Why is it important to compare insurance policies?

How to Buy a Home associates, we are here to help. It is necessary that one does some comparing and contrasting to be able to identify the best home insurance policy for you and your needs. One of the most important things to consider when getting home insurance is what exactly is covered under your policy. When looking to get a home insurance policy, do not buy the first one you come across.

Important items to watch for when comparing policies:

The amount of deductible you pay the insurance company when making a claim will impact the cost of your policy.  Generally, you can choose between a $500, $1000, and $2500 deductible.

Actual replacement cost will replace the item that was damaged with a new product similar to said item. If your policy is replacing with “Actual replacement cost”, the insurance company will pay for the cost of new windows. 

Actual cash value will only pay you what that item is worth today.   For example, your windows are 10 years old and they have been damaged by hail  If your policy uses “Actual cash value” the insurance company will depreciate the value of the windows on your home and may only cover half of the cost to replace the windows.

Be sure to take note of the limit of coverage that the insurance company has on the contents of your home.  Some policies come standard with a limit of only $10,000. When you factor in your appliances, window coverings, electronics, jewelry, clothes, children’s toys, tools, sporting equipment etc, you may need upwards of $100,000 coverage.

With my own home policy, this coverage was limited to $10,000.  I had to specifically ask for this to be increased to be suitably insured against this type of damage.   

This coverage is extremely important and again you have to take note of the limit for this coverage.  With my own home policy, this coverage was limited to $10,000.  I had to specifically ask for this to be increased to be suitably insured against this type of damage.  If your entire basement floods from a sewer backup, that’s going to be a costly bill!

This is a tricky one because insurance companies have 2 different classes of flooding. 

  • Overflow of a body of water – This will only cover damage to your home if a river, lake or pond overflows causing damage to your home.  If there are no bodies of water near your home, you might want to ask them to remove this coverage to save you some money. 
  • Above ground water – This generally provides you with coverage in the case of melting snow, or heavy rain making its way into your home.  This coverage is sometimes an add-on that you have to specifically ask for.  Years ago, a rental property of ours flooded from heavy rains and we unfortunately did not have this coverage.  Don’t let that happen to you!

It's quite common for insurance companies to have a higher deductible when making a claim caused by wind or hail damage. It's also quite common for them to depreciate the replacement cost of shingles.  Again – speak to your insurance agent and be sure to know the details of your policy. 

What exactly is the cost of home insurance policies? 

This is a tough one to answer because there are so many variables, but usually between $1,000 and $4,000 per year.  This cost will increase or decrease depending on the value of your home, where it is located and what you want covered under the policy.

Many insurance companies offer discounts to those who hold the same insurance company for their car and home – so talk to your insurance company about those discounts. 

When it comes to home insurance, read the fine print, and have our How to Buy a Home associates help you out. 

Pro tip - The only way to find the best price and policy is by booking your afternoon off and getting on the phone with multiple insurance companies.  I’m not gonna lie, its very time consuming and it sucks, but it can save you hundreds, if not thousands of dollars per year!

Looking for more information? Get personalized advice from our team!