Wednesday, June 15, 2022

Do You Have To Have Home Insurance

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Myth: My Home Insurance Only Covers The House

Do I have to have homeowners insurance?

FACT: Home insurance policies cover your house and its contents. They also cover any detached structures on the property, additional living expenses you may incur if the house is uninhabitable, and personal liability exposures you may face.

For condos, policies also cover unit owner improvements and some assessments made against you by the condo corporation. Make sure that you have a thorough understanding of what it covers. Our overview of condo insurance will explain the details of condo insurance coverage.

Protect Your Personal Belongings

If you need to file a claim for damage to your personal property, it can be helpful to create a home inventory. This includes:

  • Name and description of items
  • Purchase cost or actual cash value
  • Date and place of purchase and receipts, if available
  • Estimated replacement cost

Having a digital inventory can also help to make the claim process smoother. The list should have everything that you consider valuable, including electronics, cash, jewelry and furniture. Consider using cloud storage for your inventory or store it at another location like your office or a family members house. That way, if you do sustain damage to your home, the list will not be damaged as well. You can also ask your home insurer for recommendations of inventory apps to make the process easier.

Determining the value and replacement cost of your belongings takes time and should be given the proper thought. You can replace items such as modern sofas and coffee tables with relative ease, but possessions such as fine art and family heirlooms are often irreplaceable. Homeowners insurance policies frequently have set limits on the amount of included coverage for individual items such as electronics and artwork. If you own a lot of valuable items, you might consider increasing your policys limits or purchasing additional coverage for specific possessions in the form of an endorsement or floater.

How To Avoid A Disaster

Insurance might seem like an expense youre not likely to need. But when disasters and accidents happen, we realize how important it really is.

Always make sure your policies are up to date. A couple who suffered during the Fort McMurray wildfires of 2016 learned that the hard way. After they evacuated their home, they called their insurance company to start a claim- only to learn that they had missed their last renewal and werent covered.

Fortunately, local community groups and organizations rallied together to help the couple and their son get back on their feet.

Nicholas Adams, who was renting an apartment in Ottawa, felt a similar situation when the apartment he was renting caught fire. He didnt have renters insurance.

His landlord had property insurance, but his personal belongings werent covered because he didnt have his own policy. Luckily, like the Fort McMurray couple, Adam and the other tenants in the building received support from the community to help them get on their feet.

Not everyone has the luxury of community support.

If you have insurance, make sure your policy is up to date and you have the right coverage. When youre injured in a house fire, talk to an experienced personal injury lawyer for the right advice.

Always make sure your policies are up to date.

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Qualifying For Mortgage Default Insurance

There are some requirements you have to meet in order to qualify for mortgage default insurance:

  • The maximum amortization for insured mortgages is 25 years.
  • If the purchase price is between $500,000 – $999,999 a higher down payment is required. The minimum down payment is 5% of the first $500,000, and 10% of the remaining amount.
  • Mortgage default insurance is not available on homes purchased for more than $1 million this means that a 20% down payment is required on these homes.

There are several other requirements in order to be approved for CMHC coverage. These requirements changed on July 1st, 2020 in response to the economic downturn. To be eligible for CMHC insurance coverage after July 1st, borrows must:

  • Have a Gross Debt Service ratio of less than 35
  • Have a Total Debt Service ratio of less than 42
  • Have a credit score of at least 680
  • Must not borrow money for their down payment

Know The Difference Between Actual Value And Replacement Cost

Do you have water damage to your home? Have termites ...

Your property depreciates over time. If it is destroyed in a covered catastrophe and has to be rebuilt, your insurance policy may cover either the actual cash value or pay you the full replacement cost. Most standard homeowners insurance policies provide the option to purchase either replacement cost value or actual cash value.

Typically, there is a certain limit to replacement cost value, and if rebuilding your house costs more than the limit, you may have to pay out of pocket. This is when two more options come into play: extended replacement cost value and guaranteed replacement cost value.

Extended replacement coverage pays to rebuild your house to its prior state even if the price exceeds the actual cash value of the property. There is a limit, but it is typically 50% more than the coverage amount.

Guaranteed replacement coverage pays to restore your property regardless of the rebuilding costs. Many companies will have an upper limit after which they will not offer guaranteed replacement cost. For example, some companies will not offer a guaranteed replacement cost option on homes exceeding $1 million in value.

If you need help determining your homes replacement value, your insurance agent can help. Most insurance companies offer tools to help calculate this value for policyholders.

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What Is Excluded From Buildings Insurance

Exclusions from buildings insurance policies can vary depending on your provider and level of cover.

Common exclusions on buildings insurance policies include:

  • general wear and tear
  • damage caused by neglecting your property
  • bad workmanship
  • storm damage to gates, fences and plants
  • frost damage to outside pipes and brickwork
  • damage caused by insects, birds or other pests.

Plan Ahead For Renovation

If you plan to build an addition or adjacent structure to your home, consider the materials that will be used. Typically, wood-framed structures will cost more to insure because they are highly flammable. Conversely, cement- or steel-framed structures will cost less because these are less likely to succumb to fire or adverse weather conditions.

Another thing most homeowners should, but often don’t, consider are the insurance costs associated with building a swimming pool. In fact, items such as pools and/or other potentially injurious devices can drive the annual insurance costs up by 10% or more.

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Myth: My Insurance Protects Me Against Flooding

FACT: It depends on the type of insurance policy you have. Typically, a home insurance policy protects you against sudden and accidental entry, or release of, water in your home .

A standard home insurance policy often would not protect you against overland flooding .

Prior to 2015, flood insurance was not available in Canada at all. Instead, homeowners and renters had to rely on the disaster financial assistance programs offered by the government. Today, most home insurance providers offer some sort of freshwater flood OPTIONAL protection. A few providers, such as Square One Insurance, automatically include it in all eligible policies.

How To Get A Home Insurance Quote

Do You Have Enough Home Owners Insurance?

Getting a homeowners insurance quote online or by phone is easy. Here are some of the important questions we’ll ask:

  • Who lives with you? Determine who will be on the property, and if you’ll be running a business from home.
  • How is the home built? Provide details about your home’s construction, such as when the roof and utilities were last updated.
  • Who will own the home? Let us know if there will be a co-owner/co-applicant .
  • Do you have home insurance now? Tell us who your carrier is and how long you’ve been insured.

Do you own a home with unique architecture or worth more than $1 million? Call for specialized house insurance coverage options.

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What Kind Of Homeowners Insurance Do I Need

There are many things to consider, but for starters, you will probably want a homeowners insurance policy which typically covers:

  • Your house: Homeowners insurance coverage can help pay to repair or rebuild your house and possibly other structures on your property, such as a detached garage or a storage shed, after damage from a covered loss.
  • Your stuff: Homeowners insurance can help pay to replace your possessions, from your couch to your china, if they’re damaged or destroyed by a covered loss.
  • A place to stay: Your homeowners insurance policy may include additional living expenses coverage to help cover the cost of a hotel or other lodging while your home is being fixed or rebuilt.
  • Legal bills: If a guest slips on your walkway, you could be held liable. In this case, your homeowners insurance can help cover the related medical bills, your legal costs and potential court awards up to the dollar limit determined in the policy.

Generally, a typical homeowners policy does not include coverage for earthquakes or flood. Depending on the location of your home, your lender may require you to buy insurance that covers loss caused by earthquake or flood . And if you have valuable items that exceed the special dollar limits of your homeowners policy, such as an art collection or fine jewelry, you may want to purchase extra coverage, known as a Personal Articles Floater , for those items.

Maybe But You Don’t Want Toand Here’s Why

    Legally, you can own a home without homeowners insurance. However, in most cases, those who have a financial interest in your homesuch as a mortgage or home equity loan holderwill require that it be insured. And, for your own ongoing financial protection, you’ll want your home to have adequate homeowners coverage, as well.

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    You Have No Liability Protection

    Did you know that if a visitor is injured on your property, youre responsible? Even worse, if a trespasser gets hurt while on your property, youre still legally responsible. Without homeowners insurance, there are many expenses. A simple trip-and-fall injury leaves you paying for hospital bills, the time an individual misses work, and even legal defense. These expenses quickly add up and leave you facing a mountain of debt that follows you for years to come.

    Shop Around Before You Buy

    Do You Have To Have Homeowners Insurance : Do You Have ...

    You are not required to purchase insurance from the company your lender recommends. There are a number of unbiased sources available to find out what different insurers charge for identical products and services, including your state insurance department, consumer publications and your public library.

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    Why Is It Important To Have Home Insurance

    Your home is one of your most valuable possessions. It contains all your belongings, memories and comforts. It makes sense then, that ensuring it is fully secure is one of the most important things you can do.

    However, we know that despite the best security protection measures that we put in place, there is still the risk of theft, damage and natural disasters occurring that we can never fully eliminate. These things can impact our lives and destroy our homes in more ways than one. To protect your home should any of these issues occur, youll need home insurance.

    While there is no legal requirement for home insurance, if you are looking to obtain a mortgage or are re-mortgaging, providers might insist that you at least take out buildings cover as a condition of lending to you. This is because they are at risk too, as their money is secured against the property.

    If you are renting you wont need to take out buildings cover, as the structure of the property is the responsibility of your landlord. However you should check your lease/tenancy agreement to make sure this is not a condition of the agreement.

    Why it is important to have home insurance:

    Your home is by far the most valuable thing that you own and many of you will have spent years saving for it. Without insurance, its unlikely that youd be able to afford to repair any damage that should occur if a fire or flood should take place, which is why its so important.

    Home Insurance Helps You Sleep At Night

    Lets be honest: when thinking about worst-case scenarios, our imagination can run wild, from natural disasters to an Oceans 11-style robbery. Homeowners insurance wont necessarily stop bad things from happening, but it will put those monsters to bed by giving you the necessary protection and peace of mind that if and when they do, youll be able to handle it.

    So, do you need homeowners insurance? The answer is inevitably yes. And if youve ever thought, why invest in something now for a risk that may never happen in the future, youre going to want to know how our brain decides to get insurance .

    In the end, homeowners insurance isnt something youll feel forced to have it will be something youll want to have. Homeowners insurance is the best financial defense against bad things that may happen in life, giving you much-needed peace of mind.

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    How Do I Get Cheap Home Insurance

    One of the best ways to get cheap home insurance is to compare quotes from multiple home insurance companies. You can get free quotes online or speak with an independent insurance agent in your area.

    Another good way to save on home insurance is to ask your agent if you qualify for any discounts. For example, you might qualify for discounts like a home security discount, new home discount or home renovation discount. One of the best discounts you can get is by bundling home and auto insurance.

    Why You Dont Have To Purchase Home Insurance

    Do you have the right homeowners insurance?

    Everyone knows that you must purchase auto insurance to drive on the roads legally, but Ill let you in on a secret there is no law in Ontario saying you have to purchase home insurance.

    So why do we buy home insurance? Well, if you have a mortgage the bank will likely require some sort of insurance to protect the home. But what if you dont have a mortgage, why would you still buy insurance?

    Often, your home is the most expensive asset you own. As such, it is important to protect it from unavoidable loss. Most home insurance policies cover more than just fire damage to your home. They also cover damage caused by lightening, explosion, smoke, falling object, vandalism or malicious acts, wind or hail, theft and many others. Unfortunately, there is no policy that covers everything, so choose carefully. In addition to coverage for your home, most insurance policies also include coverage for your contents, and even pay for a hotel if the damage to your home is so severe that you are unable to stay.

    Though there is no law that says you have to purchase home insurance, I would still suggest you do. There are many different home policies which cover many different things so if you have home insurance, be sure that you speak with your provider to know exactly what it covers and what it doesnt.

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    Getting Better Liability Insurance

    Homeowners often focus their attention on coverage for their property within a home insurance policy. But just as important is your liability coverage.

    Liability insurance pays lawsuit judgments and settlements against you if youre sued over injuries or property damage accidentally caused by you, a family member or a pet. It also covers legal defense costs. For example, if someone sues you over a bite from your dog, liability insurance covers you.

    A homeowners policy might default to only $100,000 in liability coverage. But if you face an expensive lawsuit, this amount is not adequate.

    We recommend having enough liability coverage to at least cover your assets, says Buckel of Erie Insurance. Therefore, lets say a $200,000 house, a nice car, and some money in the bank, you may want to buy at least $300,000 in coverage to protect your assets.

    Getting ample liability coverage is easy by buying an umbrella insurance policy. Umbrella insurance provides extra liability coverage above both your homeowners and auto insurance policies. Because you can buy umbrella coverage worth millions of dollars, you can properly cover your net worth.

    I Own And Live In A Leasehold Flat Do I Have To Buy Home Insurance

    Your buildings insurance could form part of your service charge, rather than you having to pay for it. It depends on the conditions in your lease. It could be that you insure parts of the flat that are your legal responsibility and your leaseholder covers the communal parts of the building. Whatever the arrangement, you should find its covered in your leaseholders agreement.

    Contents insurance isnt mandatory, but again you should seriously consider it.

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    Look At Claims Response

    Following a large loss, the burden of paying out-of-pocket to repair your home and waiting for reimbursement from your insurer could place your family in a difficult financial position. A number of insurers are outsourcing core functions, including the handling of claims.

    Before purchasing a policy, find out whether licensed adjusters or third-party call centers will be receiving and handling your claims calls. Your agent should be able to provide feedback on his or her experience with a carrier, as well as its market reputation, says Mark Galante, president of field operations for the PURE Group of Insurance Companies . Look for a carrier with a proven track record of fair, timely settlements and make sure to understand your insurers stance on holdback provisions, which is when an insurance company holds back a portion of their payment until a homeowner can prove that they started repairs.

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