Homeowners & Tenant Insurance in Canada
A Homeowners Insurance policy is a policy that pays you a certain amount of money when you suffer losses to your home, its contents, loss of its use and loss of personal possessions. It also covers you for liability for accidents that may happen at the home.
Whether you're a new Canadian immigrant renting or buying your first home or apartment, a student going to university, a young person starting out on your own, or an empty nester downsizing to a condominium, you need homeowners insurance.
A Homeowner or Tenant Policy is a "package" policy that generally covers not only your house itself (and any detached structures like garages and sheds), but also its contents, whether they're in the house or temporarily away from it. That means, if your state-of-the-art laptop is stolen while you're in a hotel in another city looking for a job, you’re covered, but only up to the dollar limit specified in your policy. If someone breaks into your car and steals your expensive camera, it would be your homeowner, not your automobile insurance, that would cover the loss.
It also gives you legal protection if someone gets injured on your property and sues you, or if you accidentally injure someone or cause damage to a person's property. Let's say in the middle of the winter a salesman slips on the ice on your steps, breaks a leg, and decides to sue you for damages, your liability insurance would come to your rescue, to cover not only any damages that you are ordered to pay, but also the legal fees to defend you in court. Or if your kids play baseball outside and hit the ball through someone’s window, you’re covered.
If you're planning to buy a home, you won't be able to borrow money for your mortgage unless the lending institution knows you have Home Insurance to cover the property in case of a big loss, like a fire.
Cost
The cost of homeowners insurance depends on what it would cost to replace the house and additional items named in the policy. The policy is a lengthy contract, and describes what will and what will not be paid in the case of various events. Not everything is covered. “Acts of God” (earthquakes, floods), war and nuclear explosion are not covered.
The cost of homeowners insurance depends on what it would cost to replace the house and additional items named in the policy. The policy is a lengthy contract, and describes what will and what will not be paid in the case of various events. Not everything is covered. “Acts of God” (earthquakes, floods), war and nuclear explosion are not covered.
The homeowner’s policy is a term contract, and is in effect for a fixed period of time, usually one year. Insured property does not include the market value of the underlying land.
Insurance coverage on your home should begin as soon as you become the legal owner or tenant, even if the home is still under construction. If you're about to move to a new home, ask your broker or agent if your current policy will cover your contents at both old and new locations, and in transit, too. Theft insurance applies only when a building is ready for occupancy; vacant buildings are not normally insured for more than 30 days.
Tenant Insurance
Landlords have relatively few legal obligations to compensate tenants for damage to or loss of their tenants' belongings. Tenants, on the other hand, are responsible for harm they may cause to any part of the building in which they live, or to others who live or visit there. A fire ignited by a tenant's defective toaster could, for example, gut an entire apartment complex. That's a lot of liability!
Landlords have relatively few legal obligations to compensate tenants for damage to or loss of their tenants' belongings. Tenants, on the other hand, are responsible for harm they may cause to any part of the building in which they live, or to others who live or visit there. A fire ignited by a tenant's defective toaster could, for example, gut an entire apartment complex. That's a lot of liability!
If you've just moved into your first apartment, you may think you haven't accumulated anything of real value yet. Think again! A small amount of furniture may not look as if it's worth much, but when you have to replace it with something new, it could break your budget. If you’ve bought anything on credit, and it's destroyed by fire or stolen, you're still responsible for paying the balance to your creditor, even though you now don't have the item. That can hurt, too!
Tenants can choose from a variety of insurance policies that remove much of the worry from renting.
Discounts
* Some insurers offer discounts or other incentives for policyholders who install smoke alarms, sprinkler systems, and monitored intruder alarms.
* Some reduce premiums for seniors.
* Employment by a particular organization, or membership in a certain organization, may qualify you for an "affinity" discount.
* Some insurers offer discounts to loyal, long-term policyholders -- a factor worth considering if you have been happy with your insurer's prices and service.
* Companies might offer you a discount if you buy another policy from them, example car insurance or life insurance in addition to your homeowner’s insurance.
* Some insurers offer discounts or other incentives for policyholders who install smoke alarms, sprinkler systems, and monitored intruder alarms.
* Some reduce premiums for seniors.
* Employment by a particular organization, or membership in a certain organization, may qualify you for an "affinity" discount.
* Some insurers offer discounts to loyal, long-term policyholders -- a factor worth considering if you have been happy with your insurer's prices and service.
* Companies might offer you a discount if you buy another policy from them, example car insurance or life insurance in addition to your homeowner’s insurance.
You can also lower your premiums by opting for higher deductibles for claims relating to your home and its contents. A deductible is the part of each loss that you do not get paid for, like the first $ 500; it is not a feature of liability insurance, however.
Don't underinsure or over-insure the contents of your home. Estimate the value of your possessions and update your inventory at least once a year. Remember to include taxes. If the value of your possessions is greater than the amount of contents coverage specified in your policy, have it changed accordingly.
Minimum contents coverage for home owners is normally a percentage of the building amount.
