If you are thinking about purchasing a new home, you’ll want to also think about home insurance. We have some common questions and answers you’ll want to know about.
Q: Why do I need home insurance?
Home insurance gives you financial protection against incidents that can cause damage to your home, including: fire, lightning strikes, wind and hail, explosions, falling objects, vandalism, theft and other risks. Depending on your coverage, your home and detached structures such as a garage, storage shed or fence are protected against all risks or the risks listed in your policy.
In addition to protecting your home, home insurance helps protect you financially against damages or losses to your insured personal property such as furniture, televisions, computers, appliances, clothes, jewellery and other valuables inside your home or in your vehicle.
If you cannot live in your home while repairs are being made after an insured loss, your home insurance will help cover some of your additional living expenses, such as moving costs, a hotel room, restaurant meals, storage and more.
One of the most important ways in which home insurance protects you is through liability coverage. This coverage helps protect you financially if you unintentionally cause bodily injury or property damage to others.
Most banks and mortgage companies insist that you purchase home insurance coverage and ask for proof of the insurance before lending you money to buy a home.
Q: What types of home insurance policies are available?
There are three types of home insurance policies that you can purchase.
1. Basic: The basic homeowner’s package is ideal for individuals looking to save a little bit of money. This package provides coverage for named risks in the policy associated with your house, its contents and your liability.
2. Broad: If you feel the basic homeowner’s package is not enough to cover your needs, you can upgrade to the broad homeowner’s package. A broad policy provides insurance coverage for your home for all risks and for named risks for its contents. This package is typically more expensive than the basic homeowner’s package.
3. Comprehensive: The most inclusive (and typically most expensive) home insurance coverage you can purchase is the comprehensive homeowner’s package. This policy covers both the building and its contents for all risks except for those specifically excluded.
Q: What determines the cost of home insurance?
Insurance companies consider a variety of factors when deciding on how much to charge you for your home insurance. Insurance companies analyse those factors and determine the likelihood that you, or a group of people with the same circumstances as you, will make a claim and how much such a claim will cost. Some of these factors include: where you live, type of heating source, type of electrical distribution, type of water pipes, age of roof, primary use of your home, your claims history, how close to a fire hydrant or fire station your home is, how close to surrounding businesses your home is and the cost to rebuild your home.
Most insurance policies offer a claims-free discount. Your insurance payments may increase if you file a claim.
[Source: Government of Saskatchewan http://www.economy.gov.sk.ca/immigration/home-insurance-in-saskatchewan-english]