If you own your own home, then you'll want to protect not
only your physical building, but all the things that are in your home too. A
standard home insurance policy will ensure that if something like fire,
vandalism or theft occurs, then you will be properly looked after and your
valuables will be replaced.
You also need to think about protecting any other structures that exist on your
property, like a detached garage. And, in the event that your home is damaged,
and you need to move out for a while, you may want to consider investing in
insurance that will help pay for out-of-pocket expenses like hotel rooms and
food.
As a homeowner, it is possible that you may be held liable for accidents that
people have while on your property. What's more, you may accidentally damage
other people's belongings either in your own home, or somewhere else. A
well-structured home insurance plan will make sure that you're covered for any
of these unforeseeable events.
Tenant or renter's
insurance
If you're moving into your first apartment, you might think
you don't have anything of real value. A CD player, computer and some clothes
may not look as if it's worth much, but when you have to replace it with
something new, it could break your budget. Say you've bought a computer on
credit and it's destroyed by fire or stolen. You're still responsible for
paying the balance to your creditor, even though you no longer have the item.
As a tenant or renter in someone else's building, it's a wise decision to take
out a tenant insurance policy. It protects both your contents and your
liability exposure. You see, as a tenant, you're responsible for harm you might
cause to any part of the building you live in, or to others who live or visit
there. If you forgot to turn off the water in the bathtub while you're talking
to your friend, you could flood out your neighbours. You would be responsible
to repair any resulting damages.
Other things to consider
Tenant's improvements coverage is also
important. If you've made improvements to your rental unit -- like new
broadloom, painting or sound systems -- they might not be covered in a standard
tenant insurance policy. Improvements coverage would be a smart investment.
There are lots of other insurance options, too. As a tenant, your insurance
policy coverage can be either All Risk
or Named Perils. There's
protection against Sewer Backup and
Earthquake. And you may want to
add extra coverage for specific contents
in your home, such as jewellery, furs, cameras, and bicycles. You'll find more
details on all of these options in this home insurance basics section.
Condominium insurance
When you purchase a condominium, you own your "unit" and own
a share in the common areas of the condominium -- the roof, basement, elevator,
heating room, lobby, swimming pool, parking garage, or garden. As a condominium
owner, you may be held responsible for harm you might cause to any part of your
building, or to others who live or visit the condominium complex. A condominium
insurance policy can remove some of the financial worries of condominium
ownership.
You'll need two separate policies to protect your investment.
Your own insurance policy. The insurance policy provides coverage for your
personal property, structural improvements to your unit and additional living
expenses if you are the victim of fire, theft or other disaster listed in your
policy. You will get liability protection to protect you for harm you might
cause to any part of the building you live in or to others who live in or visit
the condominium complex.
An important feature of your own insurance policy is loss assessment. As a
condominium owner, you share responsibility with others in your building for
common property. Loss assessment protects you from damage to these common
areas. See the Loss Assessment section for more details. A "master policy"
purchased and provided by the condominium board. This covers the common areas
you share with others in your building like the roof, basement, elevator,
heating room, lobby, swimming pool, parking garage, or garden for both
liability and physical damage.
Sometimes the condominium corporation is responsible for insuring the
individual condominium as it was originally built, including standard fixtures.
In this case, you'd only be responsible for insuring your personal property and
any alterations you or a previous owner have made to the original structure of
the condominium like remodelling the kitchen or bathtub. In other cases, the
condominium corporation is responsible for insuring only the bare walls, floor
and ceiling. You'd be responsible for insuring your personal property, plus
things like the kitchen cabinets, built-in appliances, plumbing, wiring and
bathroom fixtures. Take the time to find out what's included in the condominium
corporation's policy. You can then decide what to include in your personal
insurance policy.
Limitations in property
policy coverage
Your standard property policy will have limitations in
theft coverage for jewellery and furs, silverware, business property, bicycles,
money, boat and motor. If you own any of these special items, it's a good idea
to consider adding additional coverage to your policy.
Paying a property
insurance deductible
When you make a claim, a small portion of the
claim is always paid by you first, then your insurance company pays the rest.
The portion you pay is called your deductible. The amount of your deductible
affects the price of your insurance policy. The higher your deductible, the
less the cost of your insurance premium.
Standard Home Coverages
Building coverage
All risk coverage insures your
building for the most common types of losses. When you have All Risk coverage , your building is insured for everything, unless it's specifically
excluded from your policy (e.g. intentional damage to your own property would
not be covered).
Named-Perils coverage
includes a list of the most common types of things covered under your
insurance. Named-Perils includes fire, theft and water damage. Everything is
listed very clearly in your policy booklet so you have a complete and thorough
understanding of what your insurance policy covers.
Named-Perils building coverage is very rare. After all, your home is probably
the largest investment you will ever make - why would you not want it fully
protected?
Contents
All-risk contents coverage insures your
belongings inside your home for the most common types of losses. When you have
All Risk coverage, your contents are insured for everything, unless it's
specifically excluded from your policy. Named-Perils coverage includes a list
of the most common types of things covered under your insurance. Named-Perils
includes fire, theft and water damage. Everything is listed very clearly in
your policy booklet so you have a complete and thorough understanding of what
your insurance policy covers.
A standard home policy provides for the Actual Cash Value (ACV) replacement of
your belongings. This means you only receive the value of the item, less
depreciation. For example, if you purchased a TV 5 years ago for $500, you
might only get $100 for it if it were destroyed in a fire. Even though it may
cost you $600 to replace that same TV today, your insurance would still only
give you $100. Many people choose to add the Replacement Value option to
their contents coverage. Replacement
value coverage means that the contents of your home are insured for the amount
it costs to replace them. When you replace the item(s) with a similar kind and
quality, within a specified time, the insurer will pay you what it cost you to
replace the item(s) not what they were actually worth in their used state. This
means if your 5 year-old TV was lost in a fire, you would get the full amount
it would cost to replace it, even if that is more than you paid for the TV in
the first place.
Detached private
structure
This type of coverage applies to structures that exist on
your property, but that are not connected to your primary residence. For
instance, a detached garage could be included under this coverage. There is
usually a certain limit assigned to this kind of coverage, but you can always
increase that limit by purchasing additional coverage options.
Additional living
expenses
If you are forced to leave your home because
of a loss, this coverage pays for your reasonable and necessary expenses to
temporarily live away from home. Hotel and food costs are the type of expenses
that would be covered under such circumstances. There is usually a limit on
this kind of coverage.
Personal liability
Liability is a legal responsibility. Liability insurance
protects you from having to pay damages to people, if you've been found
responsible for unintentionally injuring them or damaging their property.
Here are some examples:
If someone injures himself/herself on the property you occupy, you may be
responsible for damages. For example, if someone slips on your front steps,
breaks his/her leg, and can't go to work, you could be held responsible for the
person's lost wages.
If you or a member of your family damages another person's property, you may be
held liable. So if your son accidentally throws a baseball through the
neighbour's window, and breaks an expensive antique, you may have to pay.
The beauty of liability insurance is that it protects you anywhere in the world.
Say for example, if your golf club accidentally flies out of your grip on a
Florida golf course, strikes and injures another player. Liability insurance
would cover this accident.
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