Home insurance is not mandatory in Quebec. But do you really have a choice, considering the trouble a disaster could cause? That said, you do have a choice about the coverage you purchase, because there are several types of home insurance. Here’s what you need to know to make an informed choice.
What Do You Need?
Home insurance is designed to protect you from damage to your property, your landlord’s property, or your belongings. It can also cover injuries to a visitor or damage to another home (liability insurance).
The first step in choosing home insurance is to assess your needs. How much would it cost to rebuild your home and replace your belongings?
Assessing the cost of rebuilding can be done with the help of a professional appraiser. In many cases, the insurer can help you obtain an adequate evaluation.
When it comes to the cost of replacing your property, the only good way is through an inventory. List all your possessions, estimating their value. Be specific, if possible: include the make, model, and serial number. If you have receipts, make sure you can access them in case there is a claim. And take pictures of your belongings; they can be helpful!
What Type of Home Insurance Should I Choose?
Depending on whether you own a single-family home or an income property, you will have access to different home insurance policies. The same is true if you are a tenant or a co-owner of a building. In other words, the type of insurance you need depends on your situation:
- Homeowners Insurance. The extent of the coverage varies greatly from one policy to another.
- Home Insurance for Renters. If you rent a home, the building owner’s insurance does not cover you. If you are responsible for damage to the building or other tenants’ property, you will be responsible for paying the bill.
- Home Insurance for Co-owners. Condominium insurance covers damage to the common areas and the building itself, in addition to public liability. You need insurance for your own property, liability and improvements to your unit.
- Home Insurance for Owners of Income Properties. In addition to the building, this type of insurance protects you in case of loss of income following a disaster.
As well as being able to choose a home insurance policy that suits your situation, you can also choose different levels of risk:
- “Basic” (Or “Specified Risk”) Home Insurance. With this type of insurance, your protection covers everything listed in the contract, but excludes the rest. What is covered is the same in all such policies: fire, theft, vandalism, and some water damage. If a loss is not listed on your policy, it is not covered.
- All-Risk Home Insurance. In this case, all types of losses are covered, except those explicitly excluded by the contract. Because the coverage is broader, the cost of this insurance is higher than basic insurance.
- Extended Home Insurance. This is a hybrid policy in which your home is covered for all but the excluded risks, while your possessions are covered under a policy similar to the basic policy. Comprehensive insurance costs less than all-risk insurance.
- No Frills Insurance. If your home is not insurable according to the generally applicable criteria, you can still obtain insurance with limited coverage. This could be true for a second home or a cottage that you don’t live in year-round.
The Importance of Shopping Around for Home Insurance
Although all insurance policies are similar, the specifics of the coverage can vary greatly and affect the cost. Take the time to do your research to get the best price; it’s worth it!
When providing information to a potential insurer, don’t forget to mention if you plan to rent your home temporarily, if you are self-employed (for your belongings), if you have very valuable objects, or if you have a pool.