How exciting, you got the house! After all the tumultuous ups and downs that come with searching for a home, you can finally take a deep breath and put it all behind you! But wait, now it’s time to get home insurance, and finding the right coverage is key.

Now that the hard part of finding a home is over, it’s time to take on the next task of finding the right home insurance coverage that suits your unique situation. No two homes are the same, and not all home insurance policies are alike either. So, how much home insurance coverage do you need?

Let’s take a look at your options!

What are the different types of home insurance in Canada?

There are four types of home insurance policies that you can choose from:

Standard home insurance: This is also referred to as ‘named perils’ and is relatively basic in what it offers. It financially protects homes and their contents from named risks and perils.

Broad-form home insurance: This is a hybrid form of home insurance that offers aspects of both comprehensive and standard policies. It protects your property from all risks and perils (with exclusions) and your possessions from named perils.

Comprehensive home insurance: This is the most expensive policy, but provides the most coverage. It financially protects your home and its contents from all risks and perils (with exclusions).

No frills home insurance: This is coverage for properties that don’t meet normal insurance standards. Because of this, very few homeowners in Canada have no frills home insurance.

What does homeowners insurance cover?

The five basic areas of coverage on a homeowners insurance policy are:

Dwelling Coverage: This applies to your home’s structure, including its walls, roof, and foundation. If these components are damaged – or even completely destroyed – in an incident that falls under your home insurance coverage, your provider can help you foot the bill.

Other Property Coverage: This applies to structures on your property that are not a physical part of your home. This would include, for example, a deck, fence, or detached garage.

Contents Coverage: This applies to your belongings inside the home such as furniture, electronics, appliances, etc. It covers them against theft, damage and destruction.

Liability Coverage: This coverage protects you in the event that a guest gets hurt on your property and pursues you for damages.

Living Expense Coverage: In the event that damage to your home requires you to vacate the property, living expense coverage will help you foot the bill for alternate accommodations.

A typical policy covers damage caused by fires, lightning strikes, windstorms, and hail, but not all natural disasters are covered.

Natural disasters and home insurance coverage

Your standard home insurance policy protects you from a wide range of natural disasters, but it doesn’t automatically protect you from everything.

Standard home insurance policies in Canada can include the following types of natural disaster coverage:

• Fire coverage (including forest fire insurance)

• Ice and hail coverage

• Water damage coverage (from specified sources, like unavoidable damage due to a broken pipe)

• Wind damage coverage (protection from high winds, hurricanes, tornadoes, etc.)

But they do not cover things like earthquakes or overland floods. For this you would need to purchase a separate policy, and depending on where you live, it may be required.

We have you covered with more information about natural disasters and home insurance in Canada with this in-depth guide.

There are ways to add other coverages, not included in your typical policy, through endorsements.

What are insurance endorsements and do I need them?

You often hear about insurance endorsements, but what are they?

An insurance endorsement is a form of optional coverage that policyholders can include to their home, auto, condo, etc., insurance policies, that protect them from unforeseen risks that aren’t covered by basic policies. It is also referred to as an insurance add-on.

Policyholders can choose which add-on(s) they’d like to purchase, allowing them to tailor their coverage to their unique wants and needs.

Here’s a quick look at some typical home insurance endorsements:

• Overland water coverage

• Claim protector add-on

• Service line endorsement

• Sewer back up coverage

You can learn more about insurance endorsements and how they protect policyholders in Canada.

What happens if you’ve completed renovations to your home?

Doing renovations can add value to your home, but whatever modifications you do, you must let your insurance company know of the changes being made. Whether it be working on an unfinished basement, remodeling a bathroom or converting a shed out back to a more livable space, you should always inform them.

Homeowners are required to update their home insurance policy when they make significant changes to their home that directly influences the material risk level of the home and property.

A perfect example of this is an inground pool. Having an in-ground pool increases the risk of third-party property damage and injuries, negatively impacting the risk level of the home.

Aside from affecting the risk level of your home, making the necessary changes to your policy can help you maintain an accurate replacement value for your home. Replacement value is the amount of money required to replace covered losses with an item of equal value after an insured event damages your property (different from actual cash value).

If you don’t update your insurance policy after making a significant modification to your home your insurance provider won’t have an up-to-date replacement value for your property. So, if something happens, the modified aspects won’t be covered by your home insurance.

Find out the best way to implement changes to a home insurance policy in Canada. Learn how you can update your home insurance policy here.

In the end, you can’t put a price on the sentimental value of your home and its contents, so getting the best home insurance coverage is priceless and will help put your mind at ease knowing that you and your family are well protected.

Talk to your advisor to go over your current policy, or when purchasing a new one, and find out what coverage best suits your needs. They can help you sift through all the information to help find what you need to protect one of your largest investments.