What Home Insurance discounts are available?
Home and Auto Discount
It often pays to combine both your home and auto insurance policies with the same insurer. You may become eligible for a combined policy discount of typically 10%. You may qualify for this discount if it’s a homeowners, condo, or tenant insurance policy. Ask your broker which insurance companies are the best fit for you when combining home and auto policies.
Monitored Alarm Discount
Monitored burglar and fire alarms can prevent burglars and thieves from breaking into your home. These systems are also capable of automatically calling the fire department during an emergency when the fire alarm has been activated. Some advanced home alarm systems are now even capable of detecting leaks in your water system. In order to qualify for these discounts, the alarm systems must be monitored by a centrally monitored alarm company (e.g. Alarm Force, ADT, etc.), and the alarm cannot just be local to the home itself. Often, insurance companies will request a copy of your alarm installation certificate before applying the discount on your Homeowners Insurance Policy.
Most insurance companies have now offered Non-Smoking Household discounts. These discounts often amount to approximately 5% of your total annual premium. To qualify for this discount the residence must have no smokers living in the dwelling.
Mortgage Free Discount
Home Insurance companies in Canada now reward those whom are mortgage free on their properties. If you no longer have a mortgage or any secured line of credit on your home you may qualify for additional savings of 5% to 15% depending on the insurance company. Insurance companies will offer a discount on your Homeowners Insurance after you have paid off your mortgage and there are no other interested parties on your property. When you have paid off your mortgage contact your broker to receive this discount.
Special note: If this is you, we recommend calling to speak with a broker to ensure you are receiving this discount.
Mature citizens receive the benefit of a small savings on their Homeowners Insurance policies.
By raising your deductible you can reduce your overall annual premium. Common deductibles range on a homeowners insurance policy between $500 to $2,500. Take a moment to review your deductible options with your broker. Many policyholders will look to use their Homeowners Insurance Policy for large losses only and opt to carry an increased deductible. Savings will vary with each policy. Don’t be afraid to ask your broker to quote you on each available deductible, so that you can compare and weigh the different options available to you.
Home Insurance Basics
This is an insurance policy that covers you for all risks under both your building as well as contents, subject to a few limitations. This is often the best value for coverage on a standard Homeowners Insurance policy. The difference versus a Broad Form policy being that this policy form offers far better coverage for the contents of your home.
Often times your broker will automatically recommend this type of policy if you are looking at getting the best value for your insurance as the premium difference versus lesser forms of coverage is usually minimal.
Broad Form Coverage
This is an insurance policy that covers you for all risks on your building, but only on a named perils form for your contents. In plain English, the coverage for your dwelling would be extensive, covering everything subject to a few limitations. However, coverage for your contents and personal property within the home would be limited to certain named perils.
As an example of missing coverage on Broad Form policy, ‘mysterious disappearance’ is not commonly included. If a ring were to vanish from your home and there was no evidence it was stolen, it would be considered a ‘mysterious disappearance’ and would not be covered under a Broad Form policy.
Fire & Extended Coverage
This policy is the most basic of coverage offered. If you’re looking for the bare minimum coverage for your dwelling. We do not recommend this type of policy for most standard Homeowners Insurance policies.
The coverage for this policy is limited to cover only certain perils including: fire, lightning, windstorm, hail, explosion, aircraft damage, and smoke damage as examples. It does not provide coverage on an all perils basis like other insurance policies. Quite often this type of policy is used when insuring homes under construction or small seasonal properties like cottages.
The Standard Homeowners Policy
A standard Homeowners Insurance Policy is split into two separate divisions:
- Part I – Property
- Part II – Liability Protection
If one was to look at a home insurance declarations page, which is usually the first page in a policy, they would see Part I: Property. This protection is usually broken down into additional sections:
- Coverage A – Dwelling Building
- Coverage B – Other Structures
- Coverage C – Personal Property
- Coverage D – Loss of Use
- Coverage E – Voluntary Personal Liability
- Coverage F – Voluntary Medical Payments
Dwelling Building Coverage – This covers your home and all attached structures including fixtures in the home such as built-in appliances, plumbing, heating, permanently installed air conditioning systems, and electrical wiring.
Other Structures Coverage – Covering detached structures such as garages, storage sheds, and fixtures attached to the land including fences, driveways, sidewalks, patios, and retaining walls. Detached structures used for business purposes are not covered under a personal homeowner’s insurance policy.
Personal Property Coverage – The coverage includes the contents of your home and other personal items owned by you or family members who live with you. This protection can be based on actual cash value or replacement cost. Home insurance policies may provide limited coverage for small boats, however, most home insurance policies do not cover motorized vehicles. Some items may have coverage limits such as firearms, artwork, business property, electronic data, jewelry, and money. Extra coverage is usually available by adding endorsements or ‘Scheduled Items’ to your policy.
Loss of Use Coverage – This covers living expenses over and above your normal living expenses if you cannot live in your home while repairs are being made.
Endorsements can also be added to your home insurance policy at an additional cost to provide extra protection. Some commonly used examples of endorsements include:
Guaranteed Building Replacement Cost (GBRC)
This special coverage will pay the cost to rebuild your home as it was described, even if it were to cost the insurer more than the limitations listed on the policy. Certain conditions must be met for this coverage to be valid. It’s important that when you setup your Homeowners Insurance policy you provide the most accurate details when determining the reconstruction cost so that this coverage may apply.
This increases the amount of your Homeowners Insurance to keep up with the cost of inflation so that you can maintain adequate coverage to replace your home in the event of a loss. If a home were to keep the same amount that it had when the policy was issued you would likely encounter a situation where you were underinsured unless you had an Inflation Guard protecting your dwelling values.
This coverage protects articles such as jewelry, furs, stamps, coins, guns, computers, antiques, and other items that often exceed normal policy limits in your regular Homeowners Insurance policy. Coverage is often broader than the coverage in the homeowner’s insurance policy. There normally is not a deductible for this coverage. Increased limits on money and securities provide additional coverage for money, banknotes, securities, and deeds.
Coverage provided for a second home such as a summer residence, or seasonal cottage. Consult with your broker to discuss all the limitations of this type of coverage as it can vary greatly amongst insurers.
Identity Theft Endorsement
Protect yourself from the costs of repairing your identity once it has been stolen. Many insurers offer this coverage with certain benefits, some don’t even count Identity Theft claims as chargeable against your policy (so you would keep your claims free discount even in the event of a claim). Identity Theft has become frequent and this coverage is recommended. It is not often standard on Homeowners Insurance policies.
Sewer Backup Endorsement
This important coverage protects against water damage claims which are now the most frequent type of claim to affect your home. Ensure you have adequate coverage for sewer backup as this coverage is not standard on most Homeowners Insurance policies. A sewer backup coverage is added with limitations, please consult your broker to discuss what options are best for you.
If you look at your Homeowners Insurance policy declaration page, which is usually the first page of the Homeowners Insurance policy, in addition to the Property Coverage section you would also see another section listed as Liability Coverage. The Liability Coverage section is broken down into two parts:
- Coverage E – Voluntary Personal Liability
- Coverage F – Voluntary Medical Payments
The Personal Liability section provides personal liability coverage against a claim or lawsuit resulting from bodily injury or property damage to others caused by an accident on your property or as a result of your personal activities anywhere. This homeowner’s insurance coverage does not provide protection for auto and business related incidents. This coverage protects you and all family members who live with you.
The Medical Payments section includes coverage to pay medical expenses for persons accidentally injured on your property regardless of fault. Medical expense payments do not apply to your injuries or those of family members living with you or to activities involving your at home business.
As with every Homeowners Insurance policy there are exclusions. A typical Homeowners Insurance policy does not cover injuries to animals, damage to motor vehicles, aircraft, and parts. Nor do they typically cover losses due to floods, mudslides, water damage from sewer backups, damage resulting from war or nuclear hazard, neglect, earthquakes, power failures, seepage, dry rot, or vermin. Each insurance company will have their own separate coverage exclusions and options.
It’s important that you speak with a broker to verify the details of your policy or if you have any questions regarding specific coverage. Call us at 1(855) 482-5001.
Home Insurance Tips
In the current Toronto real estate market, sometimes insurance is only an afterthought when bidding on a home. Competition in the marketplace has made it more likely for homebuyers to waive closing conditions and inspections. We believe you should carefully select your new home by examining all of its updates.
Below, we have tried to provide a brief summary of important items to look for when considering your insurance on the purchase of a home. For more information, contact us Toll Free: 1 (855) 482-5001.
The age of a home may immediately tell you if you should ask for more information regarding its updates (i.e. when the roof was last replaced, the furnace, updates to plumbing, etc.). Homes built within the last 20 years will likely require little to no updates at all. There is a strong likelihood that newer homes will adhere to all local by-laws.
Older homes will require more investigation from the insurance company prior to insuring. These older homes are often built using dated construction techniques. Sometimes your home policy will require a special ‘By-law Endorsement’ that covers the added cost of complying with newer by-laws, enacted after the home was originally constructed.
Knob & Tube Wiring
This wiring was primarily used up until the 1930’s and is uninsurable with most insurance companies as it presents a higher risk for electrical arcing and fire claims. A lack of a safety grounding conductors presents an added danger in knob & tube wiring. As the wiring ages, the insulation can dry out and turn brittle. Additionally, this wiring is prone to damage during renovations.
With most insurers, the presence of knob & tube wiring will immediately disqualify you from insurance. Often, even minimal percentages of knob & tube wiring are not acceptable. When purchasing a home that has knob & tube wiring you may be severely restricted to a limited amount of insurers.
The safety of this form of wiring depends on the history of modifications and upgrades. While an electrician can do a proper splice, many home inspectors often find inappropriate splices which create a serious safety hazard. Because knob & tube wiring was designed to let heat dissipate to the surrounding air, most energy efficiency upgrades involve insulating previously uninsulated walls.
It is highly recommended that an electrician is contacted to replace even minimal amounts of knob & tube wiring.
During the 1970’s the cost of copper used for wiring homes had become exorbitant. Instead, aluminum was used to wire homes as a replacement to traditional copper wiring. The presence of aluminum wiring does not necessarily have a negative impact on your insurance rating and will not make your home uninsurable. However, insurers are often concerned with the use of mixed wiring to ensure that it was installed safely.
Years after the original construction of the home, when updates are completed they are often done with more modern wiring in copper. These updates must have be completed by a professional electrician. If updated improperly, these mixed wiring systems may present a hazard. Often, homes with aluminum wiring will require an Electrical Safety Authority (ESA) inspection to verify the safety of the wiring system.
Galvanized Steel Plumbing
This form of plumbing was used more commonly prior to the 1950s and had an average life expectancy of approximately 40 to 50 years.
This form of plumbing presents a danger to your home as galvanized steel does not present any discernible signs of corrosion on the exterior. Ruptured pipes can happen unexpectedly, as galvanized steel pipes will corrode from the inside.
Insurers will often require that all galvanized steel plumbing has been removed from the home and modern forms of plumbing like copper or plastic piping are put in their place.
Wood Burning Stoves
If not professionally installed, wood burning stoves can present a serious fire hazard. Insurance companies will require a Wood Energy Technology Transfer (WETT) certificate to ensure that it meets all standards of safety. Insurance companies will determine whether this form of heating is used as a primary source of heat or if it is an auxiliary source of heat in the home. Depending on the insurance company’s determination, the cost of your premium may go up or down.
Your insurance company may require that you professionally clean your chimney and wood stove on an annual basis.
It is important to be diligent when buying a property that is primarily heated with oil. Oil tanks over 20 years of age are highly susceptible to corrosion, rusting, and leakage, which may present significant environmental hazards. Even a small oil leak can have a drastic environmental impact. The cost of cleaning associated with these types of claims can be substantial.
Better insurance ratings are often given to oil tanks that are interior and above ground. Ensure your oil tank has been thoroughly inspected and is in compliance with a Technical Standards and Safety Authority (TSSA) inspection.
Water Damage & Sewer Backup
Water damage can strike anytime, and in a flash. Most recently in July of 2013, Toronto saw downpour that completely flooded the sewer infrastructure backing up into thousands of home.
We strongly encourage all residents of Ontario to take a moment to review their Homeowners Insurance policy, or let us help you review your coverage.
The most common claim to affect your Homeowners Insurance policy is not fire, it is now water damage. Now, typical insurance policies cover many aspects of water damage, but have limits or restrictions, including sewage backup.
Where do these claims occur?
Water damage can occur from any number of sources. Water damage frequently is caused by some of the following causes:
- Leaks or cracks in basement walls
- Leaky fixtures
- Overflow from toilets, sinks, and bathtubs
- Roof issues
- Seepage and foundations
- Sewer Backups
- Water main breaks
Are these claims now more frequent?
Yes, these claims have increased both in frequency and severity. The Insurance Bureau of Canada has noted that serious weather occurrences have been on the rise over the course of the last century. These claims are the result of a number of factors including climate change, infrastructure problems, and our lifestyles.
How do I protect my home?
You can take several steps to protect your home from these claims. Take preventative measures to protect the inside of your home by:
- Assessing the age of your plumbing
- Dispose of grease in your kitchen properly (not down your drain)
- Have a plumber install a backflow valve and sump pump
- Don’t leave your home unattended for long periods of time
What is a Sump Pump?
A Sump Pump is a pump system that collects water from the weeping tiles around the basement and sends it outside, away from the home. A sump pump with an emergency backup battery is an excellent way of making sure you avoid these water losses even in the event of a power failure.
Take the time to review the existing coverage you have and any applicable deductibles or coverage limits that may apply. Your best advice is to contact your insurance broker to discuss how your policy would respond.
Intact Insurance Water Damage Reference Guide
Detecting Water Leaks (Courtesy of Intact Insurance) is an excellent summary and resource for information related to water damage claims. Please review for further details on methods of preventing and mitigating water damage losses.
Identity Theft Coverage Explained
Identity theft has become a prevalent issue that has affected many of our clients and continues to rise. It has become commonplace for thieves to look for new ways to steal your personal details, whether it be through ATM skimmers, point-of-sales hacks, or stolen credit cards. It is now easier than ever for criminals to assume the identity of another person.
The risk of identity theft exists for anyone carrying a credit card. While this insurance does not prevent you from being the victim of identity theft, it will help you recover from all of the losses associated with this theft.
At a relatively small cost, identity theft insurance will help you recover by providing reimbursement for expenses such as repairing your credit report, recovering lost wages, long distance phone bills, mailing costs, and even attorney fees depending on the policy selected.
Most commonly, an Identity Theft Endorsement is added to your Homeowners Insurance Policy at a relatively small cost of $25 to $40 per year. Identity Theft endorsements are not standard on most policies and often must be requested to be added.
How can you protect your identity?
Below are a few simple ways for you to prevent against your identity theft:
- Check your credit history annually, both Equifax and TransUnion Canada are credit bureaus that will provide customers with a free copy of their credit report once a year. It is recommended that you check your credit report annually to determine if there are any discrepancies between what loans or credit cards you have authorized with your lenders.
- Do not keep a copy of your Social Insurance Number (SIN) in your wallet. If lost or stolen it becomes very easy to assume another identity with a copy of the SIN.
- Shred personal documents before throwing them out, especially those documents which contain highly sensitive material. Take a moment to think about the mail you get on a daily basis that includes personal data and make sure it’s shredded before throwing it into the garbage (i.e. shred credit card and banking statements, bills with payment information, credit card applications, etc).
- Do not leave bills with personal information out in your mailbox if it can be opened to others, rather deposit these letters into locked mailboxes that can only be collected by Canada Post.
- When shopping online or transferring personal information online do you make sure encryption software is used? Look for SSL security tags and other measures the site has taken to protect your personal identity before giving your personal information.