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The Insurance Bureau of Canada (IBC) outlines four different types of home insurance coverage that should be available across Canada: comprehensive, basic, broad and no frills. Insurance providers will tend to have their own definitions of these terms, so no matter who you decide to go with, make sure to read the fine print of your policy to find our what is and is not covered.
Similar to how a home inspector examines the structure of your home, a home insurance provider will assess the interior and exterior features, figure out the probability of something going wrong and then give you a quote. The more risks there are with your home, or the more expensive potential repairs would be, the more your premiums will cost you.
When determining your premiums, home insurance providers will look at the following:
It depends. If you have a mortgage, or have financed any portion of your home, your lender will likely require basic home insurance. If you own your home free and clear, it’s up to you to decide whether or not you should have any coverage on your home (but we always recommend it).
There are a few things to consider, as well, before purchasing a new home. A home in poor living conditions could result in an increase in premiums, because of work that may need to be done. Homes in areas with unpredictable weather or in remote areas may also be subject to higher rates. If you live in a neighbourhood with a lot of crime, you may need to install deadbolts or add a security system in order to lower your premiums.
Essentially anything that might leave your home vulnerable to damage is likely to increase your rates, so be aware of these possibilities when you’re house shopping.
You can buy home insurance in-person, online or over the phone through any number of providers, including brokers, agents or a company. If you’re unsure, you can always ask friends and family for recommendations.
Whichever provider you go with should take the time to sit down with you and explain the policy options and premium rates. Don’t be shy during this meeting. Read all the fine print and ask any questions you might have.
And remember to shop around before committing, to make sure you’re getting the best deal. That being said – don’t lie to a provider to get a better rate. It will come back to bite you should you ever need to make a claim.
When cancelling home insurance, make sure to give as much notice as possible and provide a written letter requesting the cancellation. If you have prepaid your premium for the year, you may be able to get a prorated amount refunded, but check your policy.
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