You probably know home insurance is a good idea. But if you've never bought a policy -- or read your existing policy closely -- you may wonder how coverage actually works. As they say, there's no such thing as a silly question. In fact, when it comes to home insurance, many common questions come from longstanding myths.
1. Am I Covered for Natural Disasters?
Contrary to popular belief, there is no such thing as an "Act of God" exclusion -- at least not in Canada. But that doesn't mean that everything is covered by home insurance. Many policies typically exclude damage from flooding, sewer backups, and earthquake but you can buy additional coverage.
So, while you may be covered for wildfires or hailstorms, but maybe not other events. Have a look at the language in your policy or talk to your insurance agent to find out the details.
2. Is My Policy Cheaper if My Home is Old?
As it turns out, older homes may cost more to insure than newer builds. That's because older homes have older fixtures and structures. There's a bigger chance of damage that would lead to an insurance claim. Also, homes with older HVAC and plumbing systems might not be up to current safety standards.
3. What About My Things? Are They Covered?
Your home insurance usually covers your belongings. But rare or valuable items might need extra coverage. So, if you have a family heirloom, a pricey collection of antiques, or other valuables, you may want to purchase added insurance. In fact, you might notice that certain belongings of this type are covered for a limited amount on your home insurance policy.
4. Can I Get by with Basic Coverage?
No one can force you to buy more insurance beyond a basic policy. But you may lose out when the time comes to make a claim. In addition to the risks that are covered -- these are referred to as "perils" in your policy -- have a look at the dollar limits for claims and your deductible. If you don't have enough insurance, you may have to pay out of pocket for a significant loss.
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5. What is Liability Coverage?
Liability coverage is a standard part of home insurance policies; this provides coverage if someone is accidentally injured on your property and sues you. However, it does not apply in the event of a deliberate act by you that hurts someone. It does apply if a visitor is injured by your pets, however.
6. What if I Want to Take a Long Vacation?
Your insurer needs to know about any long absences from your home. You will have to take certain precautions to make sure there are no extra hazards because no one is living there. Your insurance company may recommend that someone checks on your home every few days in order to keep things safe.
7. What if I Don't Keep Up with Maintenance?
As a homeowner, you are required to perform regular maintenance. If you don't, your insurance company may refuse to pay for damage that happens as a result. Keep a record of what you've done to maintain your home in good shape.
Find the Best Rates on Home Insurance
After you have your questions answered, you can start looking for the best rates on new policies. Check out home insurance quotes at InsuranceHotline.com and find the right coverage for you.