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Sunshine Coast home insurance tips and more

Sunshine Coast home insurance tips and more

Time and Date February 4th, 2013 User by menno@menno.ca Comments 9 Comments

Is it mandatory to have home insurance? Not always … but when there is a mortgage on the property it will be stipulated in your mortgage contract, making it an almost obligatory choice for many people.

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Sunshine Coast home insurance tips and more

Sunshine Coast home insurance tips and more

Time and Date February 4th, 2013 User by menno@menno.ca Comments 9 Comments

Is it mandatory to have home insurance? Not always … but when there is a mortgage on the property it will be stipulated in your mortgage contract, making it an almost obligatory choice for many people.

To cover yourself against substantial risks, you purchase insurance of various kinds. General home insurance offers a package of insurance products that covers more than the bare bones of the house.

To cover yourself against risks, you purchase insurance of various kinds. Home insurance offers a package of insurance products that covers more than the bare bones.

Owning a home usually means that you will want to cover it against various risks anyway. That’s not just because it may be mandatory but also because it makes sense. Most people don’t need to be convinced to purchase home insurance – the financial exposure (without insurance) would be too great.

This goes to the basic coverage (loss of house and contents) but also to liability issues and all those other coverages that the insurance policy will stipulate. Insurance risks are varied and impossible to predict. Good coverage is available to take care of most of the financial risks. Still, many people feel the need to keep the insurance premium as low as possible out of budgetary reasons.

A major tool to cut premiums is to insure a property for a lesser value. If you can convince your insurance agent that  your house is worth less than stated in the policy, you might be able to get the coverage reduced and with that: the premium. However, in today’s real estate market, where construction costs have gone quite high, it’s already more likely to be under-insured. The obvious risk here is that you’ll face a serious financial loss. For budgeting reasons, we tend to under-insure rather than over-insure. We save on premiums but we run the risk of a severe financial loss, thus partially negating the principle of insurance.

To cover yourself against substantial risks, you purchase insurance of various kinds. General home insurance offers a package of insurance products that covers more than the bare bones of the house.

Would you like to spend less and get more? Right, you're not the only one. There's always pressure between price and product; that applies in the insurance industry too.

HOW NOT TO BE CHEAP ON INSURANCE

To legitimately save on insurance premiums, you can shop around between brokers. However, you possibly are comparing apples and oranges. Are you getting exactly the same coverage? This would include a plethora of smaller risks that will all be described in your insurance documents. They include: silverware and jewellery, losses off-premises, temporary relocation, student property, gardening equipment and so on. Most importantly, there will also be differences in the coverage for legal liability.

Other than skimping on the total value covered, you have various discount options available to you:

- discount for mature customers, there could be substantial premium reductions;

- claims-free discount, like the “safe drivers discount” available for home owners too;

- home alarm system (be it monitored or not) may give you a discount;

- in-house sprinkler systems may give you a premium reduction;

- age-of-home discount for houses meeting the most modern standards;

- certain heating systems may be looked at more favourably than others;

- proximity to a fire hydrant and or fire hall has an effect on your premium;

- general premium reductions are also available to those choosing a higher deductible.

Would you like to spend less and get more? Right, you're not the only one. There always pressure between price and product and that applies in the insurance industry too.

Being cheap on insurance coverage sounds like a great plan until something goes wrong and you discover that you weren't adequately insured all along.

MORE COVERAGE INSTEAD?

It is possible to add to your insurance and purchase coverage against further risks; this would have the effect of increasing your premium:

- coverage to deal with the financial consequences of identity fraud; identity theft, etc.;

- earthquake insurance (fairly common in coastal BC);

- additional liability insurance (to cover situations that aren’t covered in a general policy);

- special items insurance (valuable art collections, jewellery, coins, stamps, wine, etc.;

- glass breakage insurance can also be added to an insurance policy.

Being cheap on insurance coverage sounds like a great plan until something goes wrong and you discover that you weren't adequately insured all along.

One size fits all does not apply in the home insurance industry. There are many different products available and you're well advised to seek expert advice on this.

VARIOUS DIFFERENT TYPES OF INSURANCE

If you live in a condo (townhouses, apartment, etc) you’re usually covered against major building losses through the coverage maintained by the strata corporation. Some people interpret that as a pass on home owner’s insurance. However, there is a condo owner’s insurance package available:

- only basic building loss insurance may be provided through the strata corporation;

- special levy insurance for those instances that the strata corp insurance was inadequate;

- coverage against improvements made to your unit exceeding strata corp insurance;

- direct damage to your unit if the strata corp coverage proves to be insufficient.

Over top of that, a condo package includes coverage for your contents, personal liability and a host of other risks that will be specified. Most of the discount and surcharge options described above, are also available for condo properties.

Being cheap on insurance coverage sounds like a great plan until something goes wrong and you discover that you weren't adequately insured all along.

A fairly standard home owners policy goes only so far. There might be special insurance requirements that you would need specified coverage for.

TENANTS, INVESTMENT, BUSINESS, RECREATIONAL

Even to those that aren’t home or condo owners just yet, there are tenant’s insurance packages available that cover against the major risks, mostly inclusive of your contents and legal liability. Since many tenants are on a budget, a tenants’ package of insurance coverage quite often gets forgotten. This may not be the smartest way to save, since large losses or liability issues can ruin your financial situation quite unnecessarily. I’ve noticed that many landlords now ask that tenants obtain an insurance package – it shows good responsibility to do so.

Many things can be insured, including all other properties that one can think of, such as: investment properties, boats, business premises, commercial insurance, recreational properties and mobile homes. This blog article does NOT take the place of insurance advice. If you have insurance questions, go to a good insurance broker.

A fairly standard home owners policy goes only so far. There might be special insurance requirements that you would need specified coverage for.

What appears to be a simple and easy-to-understand topic proves to be much more involved at second glance. Below you could read some more on related topics.

MORE to read about other potentially complicated or legal real estate topics:

Conflict rate hold to mortgage confirmation: http://www.mennorealty.ca/Blog.php/rate-hold-to-approval

The changing market: http://www.mennorealty.ca/Blog.php/market-when-to-change

Discrepancy asking price and selling price: http://www.mennorealty.ca/Blog.php/list-price-difference

Home insurance and other concerns: http://www.mennorealty.ca/Blog.php/the-logistics

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9 Responses to Sunshine Coast home insurance tips and more

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