The 10 Commandments of Home Insurance

Here are ten tips to avoid the “hell” of the unexpected and find “heavenly peace” in your home. Are you ready for a “revelation?” Then follow your guide!

1) Thou shalt understand the key principles of home insurance. It is important to understand that home insurance covers two types of risk: third-party liability and damage caused to your home. Third-party liability covers any injuries, accidents or property damage for which you are liable, for example, if you cause a fire which then spreads to another house in the neighbourhood. Third-party liability insurance coverage also extends to your spouse and to your children, even if they move away to attend school and live in their own apartment.

2) Thou shalt know how claims work. Insurance provides a benefit in the event of a loss caused by:

• Fire
• Some types of water damage
• Theft or vandalism

However, some causes of losses are excluded from coverage under the policy, such as:

• Flooding, landslides, earthquakes, rockslides
• Pollution
• War, acts of terrorism and nuclear attacks

Obviously, your insurance will not pay out for any property you have acquired illegally or any damage resulting from your own criminal actions. Does that really surprise you?

3) Thou shalt choose one’s policy. Two types of policy are generally available:

• An all-perils policy, which covers all of the types of claims set out above in the second commandment.

or

• A specified-perils policy covers your home against a specific range of losses. When you buy home insurance, you can choose to add additional coverage to your basic policy, such as to cover water damage to the foundations of your home, sewer back-up, and water damage above the foundations of your home. Another option covers swimming pools and hot tubs against damage caused by freezing, snow and ice.

4) Thou shalt make a home inventory. Remember, home insurance covers the contents of your home as well as the property itself. That’s why we recommend you draw up a home inventory. This will make things easier for you if you have to make a claim, and give you a solid base for determining the value of your assets. Consider attaching receipts to your inventory as well as videos or photos as proof of ownership, and make sure you keep a copy of the file off the premises.

It’s important to be aware that when it comes to the benefits payable, your basic policy will have a limit on the amount payable for each class of property. For example, in the event of theft, the maximum payable for electronic devices (computers, audio media, etc.) will generally be between $1,000 and $2,000. If your home inventory shows that your electronic devices are worth closer to $5,000, you can opt to increase your coverage. See the list of limits published by InfoInsurance for information about home insurance coverage options.

5) Thou shalt renew one’s insurance policy. Whenever you move house, you need to take out a new home insurance policy. However, once you have moved, your old home and your new home will remain covered by your previous insurance for a period of 30 days. Your old policy can be amended if there are any changes that apply for your new address. If you have to put any property in storage temporarily, this will also be covered. And if you decide to save money by asking friends to help you load your moving truck, and they get injured in the process, your insurance has it covered. Now there’s a solid argument to ask your friends for a helping hand!

6) Thou shalt negotiate on one’s policy. Most insurance companies will give you a discount if you insure your home, car and cottage under one roof.

7) Thou shalt make use of all means available. As well as contacting an insurance company, you can also request an online quote.

8) Thou shalt increase one’s deductible. Increasing the amount of your deductible can help lower your insurance costs, but only if you are sure you can pay the deductible if you need to file a claim. Generally speaking increasing your deductible from $250 to $500 is enough to make a difference.

9) Thou shalt protect one’s home. Installing an alarm system connected to a central monitoring station can often lead to a discount.

10) Thou shalt communicate with one’s insurance agent. Tell your agent about any plumbing or electrical work you have done, since a well-maintained property costs less to insure.

Now you’re ready to shop around for your new home insurance policy! Do you think your family and friends might enjoy reading this article? Share it on social media.