- Basic coverage comes with a preset list of things that will be covered, like fire and smoke damage, theft and injury. It will cover only what’s listed in the policy.
- Broad coverage includes basic coverage with some extras, like coverage for your items and home structure.
- Comprehensive coverage flips the script on named perils; instead of telling you what’s covered, it will tell you what’s not covered. Unless an event is listed as not covered in a comprehensive policy, the assumption is that it is.
You can also choose to add endorsements to your policy. Endorsements are amendments or changes to your insurance policy used to add optional coverages to your policy, for an extra cost, or to waive certain coverages that are typically included.
Read more on what’s covered by home insurance.
What doesn’t home insurance cover?
There are certain things standard home insurance won’t cover. Some events that are routinely left out of standard policies include:
- Overland flooding
- Sewage backup
- Damage to or caused by your water pipes in certain circumstances. It’s not guaranteed for a reason: The coverage may be voided if you leave your home unattended for too long. However, you can maintain coverage by having someone check up on your place while you’re away.
- Damage caused to vacant properties. If your home is considered vacant—that is, not occupied for 30 days or more—and damage occurs, then you may not be covered.
- Poor maintenance. If you’ve neglected your home (for example, you’ve ignored damage to your foundation or a leaky pipe) then your home insurance claim could be denied.
- Valuables. Home insurance will cover up to a certain amount for valuables, usually no more than $10,000. If you have a significant jewellery or art collection, laptops, phones, stamps, coins, toys, etc., you may want to buy additional coverage.
These are standard exclusions, but you may be able to purchase optional add-on coverage, known as endorsements, for risks that are not covered by your policy.
How to calculate the value of your belongings
Whatever you do, don’t come up with a number off the top of your head. Take a systematic approach to calculating the value of your belongings; otherwise, you may undervalue how much your stuff is actually worth.
Take the time to record a list of your belongings, backed up with written and visual documentation (cell phone pics and receipts). Next, figure out how much it would cost to replace these items if they were lost or destroyed today, and add up the total. Keep a copy of all your documentation in a safe place outside of your home, such as a safety deposit box at your bank.
How much coverage do you need?
It depends on your home, its location and your possessions. Most home insurance providers offer calculators to help you figure out how much coverage you’ll need.
How much does home insurance cost?
No two insurance policies are the same, and not surprisingly, their costs vary, too. But according to Ratehub.ca, the average annual cost of home insurance in Canada is $960. People in Ontario pay an average of $1,250, while those in Alberta pay $1,000, and those in Newfoundland and Labrador pay $780.