Did you know that a large number of Canadian homes are underinsured? The following are six important steps to make sure your home is protected against the unexpected.
1) Know Your Policy And What it Covers
Your policy type should reflect your type of home and your needs. It’s important that you review your policy basics and have a good understanding of what you are and aren’t protected against. If you own an older home, or one that has special features (carved moldings or hardwood floors, for example), you will want to make sure you have special coverages in place to protect these items.
2) Monitor the Prices of Homes in Your Area
Your home insurance policy amount provides liability protection and insures the building structure, as well as the various possession within the home. Most good home insurance policies have an annual built-in inflation protection increase, but one should never assume this is the case. Always check with your insurer to make sure the annual increase is enough to cover your home. If you’re not sure what it would cost to rebuild your home talk to a building contractor or real estate agent who is knowledgable about your neighbourhood.
3) Regularly Assess Your Personal Property
Some personal items will only have a limited coverage period. This includes property such as boats, computers, and jewelry. In many cases you will want to purchase additional coverage above and beyond your policy in order to make sure that all of your valuables are fully covered.
4) Remodelling Projects Can Impact Your Coverage
Renovation projects add value to your home, which in-turn drives up the cost to re-build. If you’ve been doing some remodelling on your property, make sure you contact your agent so they can reassess the value of your home. A knowledgable agent will also be able to provide you with an estimate of how a particular project will affect your home insurance costs.
5) Look Into Additional Coverages
Hurricanes, floods, and mudslides are three natural disasters that normally aren’t covered by standard home insurance. Additional coverages may be necessary in order to protect your property from their devastating affects. You may also wish to consider adding an umbrella insurance policy to current coverage. This will provide even more protection above and beyond your current plan.
6) Consult With Your Insurance Agent
It’s important that you review your coverages with your insurance agent regularly. Your agent may be able to offer you additional coverages that would best fit your individual homeowners insurance needs.
A Note on Mortgage Life Insurance
Mortgage life insurance is a form of insurance specifically designed to protect a repayment mortgage. Say that you and your spouse purchase a home together. You are able to meet the mortgage payments without issue until suddenly one of you becomes terminally ill. With mortgage life insurance, your policy would help you cover your mortgage payments by providing a capital sum sufficient to repay the outstanding mortgage amount. Mortgage life insurance is in contrast to private mortgage insurance, which is intended to protect the lender against the risk of default on the part of the borrower.
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