Home insurance is one of those things that you should have. Therefore, it’s why many assume it’s required to buy and own a house — and with good reason. Home insurance is one of the most useful and important things to buy in life. We’ll answer your questions about Canadian home insurance here, so you’ll never need to be confused again about it.
Do you Legally Need to Have Home Insurance?
In brief, no. Unlike auto insurance, which is legally required to own a car, home insurance is only optional, so to speak. You legally don’t need home insurance when you buy and live in your own place. However, this doesn’t mean you’ll never be in a position where you may have to buy a home insurance policy. Though the government doesn’t ever require you to have one, your bank or mortgage lender may require you to show proof of insurance before they give you a loan on your house. Also, some landlords and condo building owners will require new tenants to show proof of tenants’ or condo insurance before moving in.
Why you Should Get Home Insurance
Although you aren’t required to get home insurance it is highly advisable to get it. You may not think you need it, however, you should protect your belongings and property in the event of damage, loss, theft, or accidents. Not everyone will need to file a claim for something, but there is a wealth of money each year in Canada that is paid out for P&C (property and casualty) claims. According to the Insurance Bureau of Canada, in 2018, $39.1B was paid out to these claims in Canada and P&C claims have significantly increased in the last decade.
What is Covered under Home Insurance
- Damage
- Loss
- Accidents
- Theft
- Some natural disasters
- Medical payments for accidents
- Expenses for a hotel when your home is inhabitable due to fire, damage, etc.
Some insurance companies give you extra add-ons that aren’t offered by all companies. These are usually part of special coverage plans and are personalized for your specific needs and preferences:
- Reconstruction for the house, including for eco-rebuilding
- Precious items such as jewels, jewellery, and special high-value items
- Specific natural disasters such as earthquakes
- Water damage
Types of Coverage
To learn more about each type of coverage and its cost in Winnipeg, visit Surex.
Personal Property Coverage
Your insurance policy will include coverage for personal property, which means that should anything occur such as damage, loss, or theft, your insurer will give you a replacement cost or a partial replacement cost depending on how much coverage you have. Your coverage amount refers to how much money the insurance company will help you for your loss.
Liability Coverage
Liability insurance refers to insurance for when you’re held liable for accidents. For example, if a guest injures themselves in your home due to a spill, you are held liable. However, your insurance company will help you pay the medical bills for the person. Or, if you accidentally do damage to someone else’s property, your insurance provider will pay on your behalf.
Additional Living Expenses (ALE)
Sometimes called ALE, this is a coverage on your plan that will give you further protection in the case that your home is inhabitable. For example, in the case of fire or damage to your home, your insurer will help you with hotel and restaurant expenses for a period of time.
What is Not Covered
- Extreme natural disasters: Although many insurance websites use the term “All Perils” for the level of coverage, it doesn’t account for just any kind of reason for damage. The damage covered is usually that which is caused by fires or explosions from the natural disasters, but not for damage from the disaster itself. Moreover, some disasters like earthquakes are optional add-ons
- Loss from war and terrorist activities are generally uninsured perils.
- In-home business property: If you run a business from home, any equipment or tools used for business purposes that are damaged, stolen, or lost won’t be included because they are considered business property and not your personal possessions. Also, if you’re held liable for accidental injuries to a client, your home insurance doesn’t cover it, as they aren’t guests in your home. In order to receive coverage for in-home businesses, you’ll need to add business insurance, which is a separate policy altogether.
Condo Insurance
Why Do You Need it?
You aren’t legally required to get condo insurance, but you may need to as required by your building owner. Condo insurance protects your unit as well as your storage locker. In addition, it specifically covers damage to any other units that are accidentally and indirectly caused by you. For example, if water damage occurs to the unit below you, then your insurance will cover it.
Condo Building Insurance
There’s also something called condo building insurance. This one is included in your maintenance fees so you don’t have to worry about getting a policy on it. It’s insurance that every unit has to pay that covers the common areas such as the lobby, hallways, gym, and pool.
Tenants’ Insurance
Why Should You Get It?
A lot of landlords or apartment superintendents don’t require you to have tenants’ or renters’ insurance. However, especially if you’re a first-time renter, it looks a lot better that you have insurance because it allows your landlord to trust you more as their tenant.
Tenants’ insurance protects your possessions stolen from your place of dwelling. It also provides you with assistance to pay for damage that you accidentally cause to the other parts of the apartment or building from which you’re renting.
Conclusion: Should You Get Home Insurance?
Definitely, yes! You don’t need to purchase the most expensive policy with all the fancy add-ons. Most people don’t need all the extra features. Find a plan that is suited to your needs, even a basic one, because you’ll have peace of mind when it comes to unforeseen and unpredictable events such as damage or stolen property.
