How to save on home insurance
Home insurance also covers you should someone get injured on your property and for any accidental damage you may cause to someone else’s property. In short, it’s not something you want to skimp on. However, there are ways to lower your premiums by securing discounts, as well as by investing now to save in the long run. We spoke to Sonja Denobrega, vice president of personal insurance underwriting at Aviva Canada, about the basics of home insurance and striking a balance between saving money and protecting your home.
The basics of home insurance and factors that affect the cost
When shopping for good, affordable home insurance, there are three types of coverage to choose from: Comprehensive, broad and basic.
Comprehensive insurance is the most inclusive of these options, covering sudden and accidental occurrences on buildings and personal property, as well as liability. Put simply, this option covers everything—except some exclusions specified in your policy—and is the most expensive option.
A more affordable home insurance option is broad, offering similar coverage to that of comprehensive but with more restrictions. One of the main restrictions is that your home’s contents are covered only for the perils specifically stated in your policy.
Basic home insurance is exactly what it sounds like: no-frills coverage. It covers only perils that are named explicitly in the policy—like fire, wind and theft—and is the cheapest option upfront. It’s intended for homeowners who are considered “high-risk” due to things like a history of unpaid claims, too many claims or having a home in need of serious repairs. There are also restrictions associated with this type of coverage. For instance, you may be protected from a peril like fire, but if your home is vandalized, you won’t be covered.
What does home insurance cover?
First and foremost, your home insurance covers perils, which includes fire, lightning, falling objects, theft, vandalism, wind, hail, aircraft and vehicle damage, explosions, electrical currents, riots, smoke (not from the fireplace) and water (with some limitations; see below). This also covers personal property that’s temporarily outside of the home, such as any belongings stored away for the winter or you take with you when you travel or leave the house. (Something stolen from your car, for instance, would be covered by home insurance, not car insurance.)
Your home insurance policy also covers liability. This means that if someone is unintentionally injured or suffers damage to their personal property as a result of a mishap related to you and your family or your property—for example, if a visitor falls off your porch and injures themselves—liability coverage will protect you if they decide to sue.