Owning a home comes with security, pride and, of course, responsibility. As perhaps the most significant investment you will ever make, protecting it is obviously a priority. There is a lot of information about home insurance out there, but not all of it is necessarily true. Don’t worry, we’ve got you covered: read on as we debunk five common myths about home insurance.
Myth #1: You may not need home insurance
Unlike a vehicle, you may not technically need home insurance unless it comes as a condition from your bank or mortgage holder. Nevertheless, given the sizeable investment – both financial and emotional – it makes sense to obtain coverage and make sure that it suits your specific needs. You never know what might happen; imagine if disaster struck and you weren’t covered. You would be stuck paying out of pocket for repairs, without any compensation. Homeowner’s insurance provides protection for your home, personal belongings and even against liability claims. Liability insurance is not mandatory but is useful in the event of damage to a third party. It is included with tenant, condo and building insurance. A tenant could have to pay a significant amount if they cause a fire in the building in which they live and do not have insurance. Plan ahead and talk to an insurance provider to obtain the right coverage for your situation.
Myth #2: Renovations do not impact coverage
Homes evolve over time. Throughout the years, you and your family will make yours your own. Renovations are almost inevitable and these will increase the value of your property. As physical aspects change, so should your insurance. That’s why it’s in your best interest as a customer to inform your insurance broker of any changes so you can update your policy accordingly and ensure you’re always adequately covered. Additionally, if you have work done, you may want to consider increasing your coverage, especially when hiring contractors. So, before tackling home renovations, talk to your broker.
Myth #3: What’s inside doesn’t really count
In short: yes, it does. The effectiveness of your contents coverage depends on what you have in your home and whether it is accounted for. That sounds obvious, but not everyone fully considers how this affects them. When it comes to contents, first-time owners tend to make big upgrades, trading in old furniture for newer, more expensive pieces. Or maybe you inherited a high-value item, went on a shopping spree, or recently got engaged. Whatever the case, make sure your insurance reflects any substantial changes and appropriately safeguards your belongings.
Myth #4: Protection is about things, not people
While you must take care to cover your home and its contents, it is equally important to consider the people you live with when you structure your coverage; personal liability applies to them. Has a new partner moved in? Congratulations – make sure to amend your policy. The same applies to new roommates, cohabiting relatives, and dependents under the age of 21 or those temporarily living away from home. Your best advice would be to speak to your broker who can guide you through this process.
Myth #5: When you go away, your coverage stays home
For short trips, your home insurance typically remains static. But what about extended absences? This often applies to snowbirds, or anyone who spends winter south of the border. Certain policies require homeowners to be on site for regular intervals or, at the very least, to have someone look in on the property. You never know what might happen while you are away (e.g. flooding, fire, wind damage, etc.), so get to know the details of your policy and protect yourself from unnecessary risk before leaving.
Owning a home is wonderful, but it comes with responsibility. Talk to an insurance broker to make sure you have the policy you need, then touch base regularly to keep it current. By managing your risk, you are not only protecting your investment, but also your peace of mind.