Home Insurance Frequently Asked Questions: How Much Is Home Insurance? And More

Posted on May 18, 2019

The Canadian Insurance Sector received $54.7 billion in premiums for consumers’ homes and businesses in 2017. The industry is growing, and many homeowners would like to know "how much is home insurance?" Here, we’ll look at this question and others which policy buyers ask when seeking insurance cover.

The amount of home insurance you need for your home depends on

  • The value of your personal property like furnishings and appliances
  • The cost of the physical structure of your home

Ensure you have the correct value of your property before applying for home insurance. Also, keep in mind that there are limits applicable to your possessions. When trying to determine “how much is home insurance” for your case, work with the insurance company.

It’s advisable to get a cover higher than the value of your property.

1. What Determines My Home Insurance Premiums?

Once you know “how much is home insurance” the next thing is to calculate your premiums. Your home structure has a lot to do with how much you pay monthly. The insurance will take into consideration

  • The type of building
  • Its age and size
  • Type of construction (wood, block, or brick)
  • Type of heating system
  • Its location proximity to a fire station

The company will also consider the replacement cost in case of a claim. The contents, size, and composition of your home will impact replacement costs.

One other important factor is whether you have a monitored security system or fire alarm.

Note that there are things you can do to reduce the value of premiums payable for your home. One of them is having a security system, or a monitored fire alarm installed. You can also choose a higher deductible.

Thirdly, going for 12 months without making a claim can qualify you for discounted premiums.

2. Should I Get Home Insurance?

It’s not a requirement by law for you to have home insurance. However, with all the many options of affordable home insurance policies available, it’s wise to take a cover. If you research carefully, you’ll find specific cover for particular kinds of damage to your home.

There’s also specialized insurance to cover home business, condominium and other types of property. Some covers also include liability coverage for injuries that happen within your property.

3. Do I Need a Tenant’s Insurance Cover?

If you’re a renter, the decision to buy tenant insurance lies with you. The owner of the property you rent or the property management company usually takes cover for certain damages. Most of them are concerning damages to the building or appliances.

The cover you can take is to protect your possessions if you so wish. If you add up the value of the items you own, you’ll see the need to take an insurance cover for them. Think about the things you’ve bought in cash and those you’re still paying for.

If the items you purchased on credit got stolen or damaged, you’d still have to pay for them. With an insurance cover, you would save yourself a lot of heartache and money. Tenant’s insurance also covers any damage the tenants or guests cause to the building.

The other issue surrounding tenant insurance is if you rent an apartment in your parents’ home. If they have coverage for their property, it will cover your contents in the apartment. However, check if the amount insured is adequate to replace your possessions in case of a loss.

You can increase the limit to reflect the value of your possessions and their combined. You also need to be added to the policy as an additional insured. This ensures you also get compensated in case of any claim settlement.

4. How Can I Protect My Property from Fire?

Household fires can leave you homeless and without property. They also claim many lives annually. Take steps to take care of your home from a fire outbreak by taking the following steps.

  • Install smoke detectors on every floor
  • Change their batteries regularly
  • Don’t leave cooking or heating equipment unattended
  • Don’t pour water on a grease fire
  • Avoid plugging too many appliances in one outlet
  • Have your chimney flues and furnace frequently inspected

By taking these precautions, making a claim in case of a fire outbreak won’t be complicated. Insurance companies hardly pay for accidents caused by negligence.

5. What Is the Average Home Insurance Cost in Canada?

The annual cost of home insurance depends on the price of the home in question. Based on the average home prices, you can expect to pay anything between $800 and $1,200 for home insurance.

This cost can increase depending on the location of your home, among other factors. These include contents and type of risks. Compare different quotes before you make your final decision.

6. Why Is The Building Amount Higher than Tax Assessment?

Real estate appraisals, tax assessments, and insurance evaluations generate a different value for different purposes. Your insurance evaluation reflects the amount required to rebuild your house from scratch in case of loss. When you factor in the cost of skilled labor and building materials, the amount exceeds tax assessment.

7. How Should I Make a Claim In Case of a Loss?

Immediately after an incident occurs, report to the insurance company. Most companies have an emergency number you can reach them on after working hours. Once the company has information regarding your loss, they’ll assign a claims representative to your case.

The role of the claims representative is to assist you in filing your claim. They’ll also guide you to ensure you meet the policy requirements while determining how the policy responds. A claim representative should provide services in a fast and efficient manner.

If you can't live in your house after a loss incident, check with your insurance company. Some policies include the cost of temporary accommodation elsewhere. The time it takes to repair your home or permanently relocated will determine the period you’ll be covered.  

What Do You Need to Provide While Making a Claim?

One of the things you should provide for all your claims is evidence of the loss. For all your possessions that got damaged, you need to provide a list. Attach their receipts where possible, for example, in the case of stolen or lost goods.

You can always make your claim easier by having a home inventory. This is a list of all your possessions which you create way before the loss happens. The process can be tasking, but you can start by

  • Picking a comfortable spot to start and listing all the items there
  • Listing all the recent purchases
  • Including all the basic information
  • Counting things by general category
  • Recording serial numbers
  • Listing off-site items; those kept in safe storage but covered by the policy
  • Storing all sales receipts and purchase contracts safely with the list
  • Making the habit ongoing

You can use technology to make the process of inventory creation easier. For example, take photos of your possessions and store them in a place you can easily access later. Capture entire rooms, closets, drawers, and appliances in their natural environment.

Label your photos with all the important information. Some apps can help you with this process.

8. What Are My Settlement Options?

After you've filed your claim and the insurance company has verified it, it's time for compensation. Settlement options include repair replacement, or cash out. Repair is a settlement for your damaged building or assets.

Where the cost of repair is close to the value of the asset in question, replacement may apply. This will, however, vary with the type of loss. One item will be easier to replace than the contents of an entire house.

Sometimes, the insurance will pay the actual cash value of your items. The cash out takes into account the condition, age, and expected useful life of the asset. Cash out settlement applies on policies without the replacement cost exemption.

9. How Long Should I Take to Complete My Claim?

You have a period to 12 months to make and finalize your claims. After that, the insurance company may not settle your claims. It'll take 30-60 days after you file your application to get your settlement.

How Much Is Home Insurance? The Take Away

You might not think that you need home insurance, but it’ll come in handy in times of calamity. It protects your home and assets in the event of a loss. Different policies cater to various types of, including fire outbreak and theft.

When buying home insurance, you’ll probably ask “how much is home insurance?” A definitive answer to this question would only be based on the real value of your property. Once you determine the value of your assets, the company will calculate the premiums payable per month.

In making a claim, report immediately after a loss happens. You have a window period of twelve months to do so.

With a good insurance company, getting a settlement shouldn’t be a complicated process. Whether it’s in repair, replacement, or cash out, you’ll have a way of recovering from the loss.

If you have any questions, feel free to reach out to us for help.

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