According to the most recent Canadian census, the single-detached house is still the most common type of dwelling for Canadians. Other types of dwellings like apartments and condos are certainly on the rise, but for now, the majority of Canadians live in a house.
For most people, a home is the most valuable asset they will ever have. This is why it’s so important that it’s protected. When looking for home insurance, it can be hard to know what information out there is true and what isn’t. Your mom might have one piece of advice, but your colleague might tell you something completely different! Our brokers answer insurance questions all day long and they are your source for all insurance related truths.
Here are four of the most common home insurance myths debunked by our experts:
Myth one: The replacement cost of your home equals the price that it is valued at.
Truth: The replacement cost of your house is not what it is valued at. It is determined based on what it would cost to rebuild your house. For example, your house could be valued at $1,000,000 but may only cost $550,000 to rebuild in its entirety. Therefore, when filing a claim for replacement, your payout would be the $550,000 required for rebuilding.
Myth two: As a tenant, my landlord’s insurance will cover all risks and damages.
Truth: Your landlord’s insurance policy does not cover everything. It only covers the specific risks stated on their policy. Things that can be protected under your landlord’s insurance include fire damages, vandalism, damages due to lightning or hail and other various perils. Your personal contents and belongings are not protected under your landlord’s policy, and neither are damages due to flooding. In order to be covered against these risks you will need to have your own tenant insurance policy.
Myth three: Having home insurance is a legal requirement.
Truth: Unlike car insurance, home insurance is not required by law. However, if you have a mortgage on your home, it may be required for you to invest in this type of policy. Most major banks will only give you a mortgage if you have home insurance. This is because the bank essentially owns a part of your house, and therefore has a major interest in what happens to it. Having home insurance reassures the bank that their investment will be protected.
Myth four: If a neighbour’s tree were to damage my property, their insurance will cover it.
Truth: Your neighbour’s insurance policy does not cover any damages to your property, regardless of if their tree caused the damage or not. Your own home insurance policy is what would kick in to cover this type of damage, and other damages to your property. That’s why it is so important to make sure that you have all the types of coverage that fit your specific needs.
What myths have you heard?
These are some of the misconceptions our brokers hear all the time. Did you believe in any of these myths? Do you have any other questions about home insurance? We would love to hear all your home insurance questions, comments and concerns. A BrokerLink broker is always ready to help.