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So I’ve just finished taking a course on home insurance and to say that I’m a little freaked out would be an understatement. First time home buyers take note:
- Many first-time condo owners under-estimate the amount of insurance they need? Yes, insurance for the building is generally covered by condo fees (remember you only own the dry-wall in!), but the content insurance you need is much greater than what you needed as a renter. It’s not just your ‘stuff’ you need to insure – but the appliances, the kitchen cupboards, the hardwood floors, the toilet….all the new ‘stuff’ you now own!
- Yes, your TV may be an old school remote-control-less big box that sits on the floor, but insurance covers the cost to replace your items – not the cost of what they would sell for on Craigslist.
- Many house owners over-insure their homes! Yes, you may have paid $1,150,000 for that semi in Leslieville, but if it burns down to the ground, you still own the land. Don’t pay to insure land that isn’t going anywhere!
- Insurance companies won’t just automatically insure your new house – even if they’ve insured that very house before. They’ll look at your house’s electrical (they hate knob and tube wiring), plumbing (no galvanized steel!), the condition of the roof, and basically everything else that might increase your probability of making an insurance claim. Of course, they’ll also consider the age of the house, proximity to fire hydrants/fire stations, the crime rate in your new ‘hood, your personal insurance history…
- Don’t be tempted to lie! Yes, you might be successful in getting insurance for your 100% knob and tube house if you pretend you don’t know it’s there – but lo and behold something happens to your house – you’ll find yourself without insurance coverage (and maybe a fraud charge too!) Let alone the fact that you’ve paid for insurance that wasn’t really insuring you.
- When the Canadian winter drives you to sit on a beach in Mexico for a week…you may not be covered for flood and water damage! If you’re gone longer than 4 days, your insurance company likely requires you to get a ‘competent’ person to check in on your house – EVERY DAY! And don’t forget, the probability that your pipes freeze or your basement leaks increases proportionately to how far you are from your house…at least it does in our experience.
- Don’t forget liability insurance – at least $1,000,000 of it. No matter how diligent you are about safety, someone may slip on your icy stairs. Or hurt themselves in your hot tub. And while Canadians aren’t as litigation-happy as our neighbours to the south, these types of lawsuits happen every day.
- Sadly, liability insurance won’t cover you if you’re negligent – so you still need to shovel your driveway and take all necessary steps to make your home safe for guests. And yes, that includes a handrail on your 2 step front porch.