Everyone that owns a home knows it is very important to buy insurance. In fact, you would not be able to get a mortgage on your home if it was not insured. However, not all homeowner policies are the same, and you could be underinsured and unaware of the potential problems you might face in the future. In fact, that is what happened to our example couple, Jeremy and Lucy D.
Lucy and Jeremy dreamed of owning their own home for many years. The couple worked hard and saved money, and they finally had enough for a down payment and to pay for the closing costs on a house. They were so excited that they rushed through the process. In fact, they didn’t even read over their homeowner policy. They just wanted to move into their new house and enjoy the dream of owning a home.
Two years later, Lucy was talking to a friend of hers, Sally, about a recent disaster. Several hundred miles away, some relatives of Sally’s had a large sewer back up loss damaging much of their lovely home. They suffered major damages and did not know what they were going to do. Like many Canadian couples, these people believed that sewer back coverage was part of their homeowners insurance policy, but they were wrong. In fact, this type of coverage is not standard through the insurance industry. Many insurance companies now have limits on Sewer back up coverage or in some cases NO sewer back up coverage what so ever.
As the women were talking, Lucy expressed concerns about the insurance on her own home and Sally gave her the phone number of her insurance broker. Sally explained that the broker was able to save her a bit of money on her insurance but more importantly she was able to get the coverage that she wanted and needed. Lucy called Sally’s broker later that day and set up an appointment to see him.
Jeremy and Lucy were shocked to find out they had no Sewer Back up coverage coverage at all. They didn’t want to end up like Sally’s relatives so they talked to Sally’s broker about Sewer back up coverage and found that there are other insurance companies that will cover this with much higher limits. In fact, the broker was able to provide discounts on their auto and home owners insurance as well.
Who Should Buy Homeowners Insurance?
When you own a home, it makes sense to insurance it, and of course the mortgage company will insist upon it. However, even those renting their homes should insure the contents and make sure their legal liability issues are covered. These residences should be insured:
- Private houses
- Condos
- Town homes
- Vacation homes
- Luxury homes
- Apartments
- Duplexes
- Rental properties
- investment properties
- summer cottages
- Acreages or Farms
