Page 5 - REN July-Aug 2021

“[The] flooding of basements is very common and those can range from $30,000 to $40,000 easily, especially if you
have a finished basement and you have to replace all of the carpets and tons of furniture,” said Hands. “Having that
level of coverage provides peace of mind knowing you’re covered in any of those scenarios.”

Hands notes it’s important to have your home insurance kick in on the day you move into your property. This can be
especially helpful so you’re covered for liability with movers or repair people on site.

When searching for home insurance, Hands says it’s beneficial to shop around and explore the various types of
options and prices out there, especially since insurers will each have different methods of determining your premium.
A premium is the amount the homeowner pays to
the insurance provider on an annual or monthly
basis for assuming the risk of the property. Premiums
are calculated using a number of factors about the
home which determine how likely the property will
require an insurance claim.
Asking your insurance broker questions and
comparing options can be the most effective way
to get the best rate and coverage designed for you.
“No two insurance companies will rate you the
same way. They often will look at similar factors that
go into a price, but they weigh them differently,”
explains Hands. “They could be looking for different
types of customers that meet different criteria.”
What types of insurance are out there?

According to Ratehub.ca, the average cost of home insurance in Canada is $960 per year, but the price you’ll pay for
your specific property will depend on a number of factors.

There are three major types of insurance in Canada—home, condo, and tenant. At a basic level, insurers will assess the
property’s size, location, construction materials, appliances, replacement costs, and upgrades to assess the home’s
risks and calculate the insurance premium.

The type of insurance you require will also play a role in determining your premium. For example, Hands says the cost
of insurance of the average home in Ontario is around $1,250 annually, which is slightly more expensive than condo
insurance, which averages between $700 and $1,000.

If you’re trying to lower your premium, paying your insurance on an annual basis, increasing your deductible,
combining it with your auto insurance, or even asking for a discount from your provider can all cut down on costs.
How much coverage and protection can I buy?

Once you’ve determined the type of insurance you need, you’ll next need to choose the level of coverage. According
to the Insurance Bureau of Canada (IBC), there are four common varieties of home insurance policies, all of which
have different levels of protection.

A comprehensive coverage insurance policy will protect the physical building and its contents against all insured
perils—an event that will cause damage—except for those specifically excluded. Uninsurable perils, like earthquakes,
and optional coverage, which is additional protection that’s not automatically part of the insurance policy, are not
typically included in comprehensive policies, as per the IBC. However, comprehensive policies are considered to be
the most inclusive in terms of how much they cover.

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