A house may often be a person’s single biggest investment and therefore protection of that property is of utmost importance. The best type of homeowners policy (and for that matter a condo or tenants package) is a Comprehensive or “All Risk” form. This type of insurance covers all risks of loss or damage, except for the exclusions which are specifically stated. This contrasts with a Named Perils insurance policy which lists specifically what is covered, and everything other type of loss is excluded. A comprehensive policy is the broadest type of residential insurance you can buy. A third type of property coverage called a “Broad” Homeowners form provides All Risk coverage on the building, but Named Perils on contents. We always recommend a Comprehensive form for our clients, and are confident that the coverage will be very competitive on price as well. Homeowners policies cannot be completely summarized in a paragraph, but a few other coverage details are important to note. Most Comprehensive policies will provide Guaranteed Replacement Cost on your house, meaning that if the policy limit is exhausted, the insurance company will still guarantee replacement of the building. Consideration also must be given to ensuring you have adequate contents insurance, additional living expense coverage (if you must live elsewhere while your home is being repaired), and personal liability coverage, which protects the homeowner if they are sued for causing bodily injury or property damage to someone else.
A condo policy is very similar to a tenants package in that it includes the main coverages for contents, additional living expense and liability, and that the contents limit is the main limit chosen by the customer. However, it also includes three very unique coverages specifically for condo (or, in British Columbia) “strata” owners. Please note that different insurers may refer to each by slightly different names. The first is Unit Contingent Coverage. In a strata plan, the building itself is insured by the strata corporation include the individual condo units, but if a loss occurred that was insured by the personal policy and not by the strata’s policy, this contingent coverage would apply. In practice it is most often used for losses that are below the strata policy’s deductible which can often be as high as $5,000 to $25,000. Small losses to your condo unit below that deductible would be covered by your unit coverage instead. The second coverage is Loss Assessment, which can really be described as contingent coverage for the strata’s common property. If a unit owner is assessed a share of a common property loss (again often because below the strata’s deductible) then this coverage can respond to pay that assessment. Lastly, while the strata’s policy covers the cost of the building’s original finishing, a condo owner needs Improvements and Betterments coverage to pay for the additional cost of these upgrades if a loss occurred. The limit for all three of these coverages is often a multiplier of the contents limit, but can also be a flat amount, depending on the insurance company.
Fittingly, a tenants policy is insurance coverage for individuals and families renting houses or apartments. As noted in the homeowners section above, a comprehensive tenants package is the best option as it provides All Risk insurance coverage. A tenants policy provides three main coverages. First it covers the household contents, and the limit of insurance is chosen by the policy holder. When choosing a limit, you always need to remember that coverage is on a Replacement basis, so it is the cost to purchase all of your belongings brand new, without deduction for depreciation. Secondly the policy provides Additional Living Expense coverage which pays for additional costs faced as a result of an insured property claim, such as hotel or rental of temporary accomodation, storage of undamaged contents, extra meal expenses and so on. Lastly, the policy provides personal world-wide coverage against bodily injury and property damage liability.
The insurance coverage on a rental house is obviously a building policy first and foremost. Coverage can be All Risk, but depending on buidling age and occupancy (or simply the customer’s preference) they may only carry Named Perils coverage. Some contents insurance may be required, as well as coverage for rental income if the tenants must move out during claim repairs or construction; and of course liability insurance for the landlord is an important part of the package. We would note two other very important insurance details for rental property owners. First is to require (or at least strongly urge) your tenants to carry their own tenants insurance policy. Not only will this be in their best interest to protect their belongings, but it means they would also have liability coverage, and if they caused damage to your property, then their policy would respond to pay for that damage rather than having that loss remain against your property insurance. Second is the issue of vacancy. A rental policy is written based on an occupied building, and therefore the wordings require landlords to advise the brokerage immediately if a property becomes vacant, even if for a brief period. There is no additional charge for the first 30 days of vacancy, but if a vacancy drags on then a monthly fee may apply. You should also remember that certain perils are excluded during vacancy, including water damage and vandalism. We would strongly suggest shutting off the water main if the building is empty and we can advise of each policy’s requirements for checking on the property.
A cottage at the lake or a cabin at the ski hill can be the greatest of family retreats. But of all residential type insurance policies, seasonals probably have the widest range of coverage options available. Depending on the building’s age, value, construction, and frequency of use, you can obtain everything from a full Comprehensive secondary homeowners policy, to a very basic Named Perils, Actual Cash Value building policy. A review of each situation is really needed to determine the exact policy that is right for any given customer. One common aspect of seasonal properties in our region is that because of their rural location, many have wood or pellet heating units. In order to be insurable, a stove or heating unit like this must be professionally installed and labelled by ULC, CSA or Warnock Hersey, or else it would have to pass inspection by a WETT certified technician. A wood heating questionnaire would have to be completed, and while this form can be a chore, when you do complete it be sure to ask one of our staff to show you “The Letter.” Anyone who has ever had to fill out a woodheat questionnaire is sure to have a bit of a chuckle!
We also offer a range of other personal insurance products including Mobile Homes, Umbrella Liability, Jewellery Floaters, Boats & Personal Watercraft, Motorhomes, Travel Trailers, ATVs, Snowmobiles, Home-Based Businesses, Travel Medical, and Contents in Storage policies. Please do not hesitate to contact us about any type of personal or residential insurance.
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