Home Insurance Facts

Home Insurance Tip Number 1: Make Sure New Home Improvements Are Insured

Have you made, or are you about to make any of these common home improvements:

  • floor additions
  • room additions
  • finishing or partially finishing a basement
  • installing a fireplace
  • adding an in-ground swimming pool or hot tub
  • constructing a deck
  • renovating bathrooms or kitchens
  • turning a garage or shed into a workroom

If so, be sure to contact your broker immediately so that your house insurance policy accurately reflects the new value you've put into your home.

If your home insurance broker doesn't know about your new improvements, he can't ensure that you will be entitled to the true Guaranteed Replacement Cost of your home. Any damage to unreported home improvements may have to be borne by the policy holder alone, who, as a result, doesn't receive the full value of an accurate home insurance policy.

Advise your home insurance broker before you begin any renovation or addition and be sure to update him as the project is finished. That way, you can rest assured that your house insurance policy is working hard to protect all the new features of your home.

Home Insurance Tip Number 2: Protect Your Home From Flooding

While no one can stop acts of nature, such as those that resulted in the recent floods in Toronto, there are steps that everyone can take to reduce flood water damage. If we all work to reduce potential water damage in our homes, we can all benefit from lower home insurance premiums and lower home insurance quotes.

Spring thaw run-off, heavy rain or municipal sewer back-ups can result in a basement full of dirty water. As you might imagine, flooded basements not only destroy important keepsakes, they usually also severely compromise walls, floors carpets, electronics and create nothing but grief and stress for any homeowner.

You can help prevent such a tragedy by:

  • carefully inspecting your basement and exterior walls and calling a professional if you see any cracks.
  • using clay or fill soil to build up any areas where the ground slopes toward your house, thereby ensuring that water runs away from your foundation.
  • making sure any drainpipes extend in a downward slope away from your house and empty their drainage water at least six feet away from the foundation.
  • removing leaves and other debris from eavestroughs and flushing them out from their highest point with a garden hose.
  • installing a sump pump in your basement that, if water is detected, removes it out and away from your outer foundation.
  • having a professional install a backwater valve to prevent municipal sewage from backing up into basement drains and overflowing into your basement

Following these relatively inexpensive tips will help save you from all the hardship and turmoil that comes with a flooded basement.

Home Insurance Tip Number 3: Itemize Your Possessions and Their Value

Should a catastrophe happen to your home, the last thing you'll want to have to do is sit down and try and figure out the value of everything that may have been lost and which things you have an immediate need for. Instead, take the time now to create an inventory of everything you own and its value. Although this may seem like a big task, follow these steps to streamline the procedure:

  • Divide the task up into smaller steps by inventorying everything in one room one day, and subsequent rooms in the following days.
  • Describe the item in one column and enter today's replacement value for the item in dollars in an adjacent column. Note that today's value of an item is not what you once may have paid for it, but the number of dollars required to replace that item, brand new, in today's dollars.
  • Add a third column and put a check in that column for any item you would need to have replaced immediately if you should have to make a sudden, temporary move (such as pots and pans, clothing, toiletries, etc.)
  • Don't forget to include items in storage or closets, such as seasonal decorations, tools and items in the garage and jewelry.
  • Use a video or still camera to take pictures of room contents and store them with your written inventory.
  • Most importantly, remember to store your home inventory preferably off-site in a bank safety deposit box or at least in a fire/water proof box somewhere in your home. Your home inventory will be useless if it is consumed by the catastrophe.
  • Lastly, by adding up the value of all your personal items you'll get a very accurate idea of how much house-contents insurance you should have included in your home insurance policy. You won't pay too much or have inadequate coverage if you know how much it would cost to replace everything you own!

In wake of recent natural disasters (Calgary flood and Toronto flood) what is going to happen to property insurance rates?

Some companies are already applying rate increases and sewer back up coverage reductions?

We are starting to see rates increase especially in the sewer back up section of your insurance. Something you need to be very careful of is the sewer back up limit some insurance companies are providing. We are seeing $10,000 limits in some cases. This is a very low limit if you take into consideration the clean up costs alone. Then you also have to factor in repair cost especially for those with finished basements. Rather than using basements as storage, many homeowners are now using it as valuable living spaceā€”an extension of their home and their lifestyle. That means that the average sewer backup claim jumped from $5,000 to $55,000 (CDN) in past 15 years.


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