What Is Home Insurance, and What Does It Cover?
Welcome to home insurance 101.
If you’re a new homeowner or unfamiliar with what home insurance really covers, you’ve come to the right place. Many people think that insurance is complicated, but it doesn’t have to be – especially with a company like Onlia, where simplicity is a priority. We’re here to break home insurance down for you, so you can make sure you have the coverage you need to keep what you love, safe.
There’s quite a bit to cover, so we’ll start from the beginning.
What is home insurance?
For many, their home is one of the biggest investments they’ll ever make, so it makes sense to protect it – and that’s exactly what home insurance does. Home insurance coverage will protect your home, (including what’s in it) when the unexpected happens. You’ll be glad to know that it can also come in handy if someone injures themselves on your property, or if you accidentally damage someone else’s.
Common terms you’ll hear when discussing home insurance includes policy, deductible, and premium. Not sure what these are? Here’s a brief glossary:
Policy - Outlines everything that’s included in your coverage.
Premium - The monthly price you’ll pay to keep your policy active.
Deductible - The amount of money you’ll pay when making a claim. Once you pay your deductible, we’ll cover the rest of your costs (up to your policy limits).
Home insurance is the peace of mind you need to rest easy, knowing that your home is safeguarded against those things you just didn’t see coming.
What does home insurance cover?
Home insurance will cover your home and its belongings when they’re damaged or stolen. For example, if there’s a fire in your home that destroys your home theatre, your insurance provider will cover the costs to repair your home, and replace items that were damaged. While all insurance policies will offer basic coverage, there are additional coverages that you can add to your policy, which can vary depending on who your provider is.
Home insurance coverage will also vary depending on whether you live in a condo, or are renting. If you own a condo, your insurance will typically cover any improvements you make to your unit, as well as your belongings inside it. If you’re renting, your insurance policy will protect your belongings inside your home.
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Do I need home insurance?
While home insurance isn’t mandatory in Ontario, it’s strongly recommended – and we’re not just saying that. If you’re a homeowner, you’ll want to protect your investment. If something unexpected happens to your home and it’s not insured, any repair or replacement costs will come out of your pocket. Moreover, most financial institutions require that you have it before you can get a mortgage.
If you rent, you may be thinking: I don’t have a mortgage, and why would I need to protect someone else’s property? Your landlord might already have insurance on their house, but their coverage won’t extend to their tenant’s belongings. That means if your belongings are stolen or damaged, you’ll be left out in the cold. Renter’s insurance will also cover you for liabilities, and living expenses in the event that you need to relocate while your place is repaired. Some landlords will also require that you have tenant insurance before you move in.
In the best-case scenario, you’ll never need to make a claim. In the event that you do, you’ll be glad you have insurance.