What is Ontario content insurance?
Contents insurance is part of your home insurance, condo insurance, or tenant insurance policy, and it protects your personal property from common risks, such as:
- Fire
- Smoke
- Water damage
- Theft
- Vandalism
- Windstorms
- Hailstorms
- Falling objects
It offers financial help if your items get damaged, destroyed, or stolen, covering everything in your home, garage, and backyard shed.
The specifics of contents insurance can vary depending on whether you own or rent a house, condo, or apartment in Ontario. However, the main goal is the same: to help with the repair or replacement of your damaged or lost items.
Keep in mind that all policies have a maximum limit, and there are additional limits for certain high-value items like antiques, instruments, jewellery, and cash. If you own valuable items, you can opt for extra coverage or look into a high-value home insurance policy for added protection. You can also add additional coverage for things like overland flooding or sewer backups if your area is prone to either.
How does content insurance work?
Ontario insurance coverage steps in to protect your belongings if something happens, as specified in your home, condo, or tenant insurance policy. In most cases, it covers the replacement cost of the items you've lost.
Imagine coming home one day to find your place completely empty. You've been robbed. Now what? If you've been wise enough to invest in contents insurance, you can call your insurance broker to report what happened. They'll get in touch with the insurance company and help start your claim.
But if you didn't have contents insurance, replacing everything out-of-pocket would be on you, including those pricey items like furniture, clothing, and appliances. That's why it's crucial to create a home inventory list and estimate the value of your possessions as accurately as possible when getting an Ontario contents insurance policy.
What items does contents insurance in Ontario cover?
Some of the items typically covered under contents insurance include:
- Furniture
- Clothing
- Appliances
- Jewellery
- Electronics
- Home décor
- Bicycles
- Instruments
- Sports equipment
Remember, standard contents insurance policies come with coverage limits and exceptions for certain items, so it's a good idea to talk these over with your home insurance provider or broker and ask for advice to make sure you're fully covered. You may need to purchase additional coverage if you own expensive items like high-end jewellery, artwork, musical instruments, or sporting equipment.
What items does insurance not cover in Ontario?
Just because something is in your home doesn't mean it's automatically covered by your contents insurance. There are certain items that typically aren't included. These exclusions include:
- Some types of electronics
- Some types of high-end jewellery
- Some types of sporting equipment
- Some types of valuables/collectibles
- Home business property
- Large amounts of cash
- Motorized vehicles, like cars, motorcycles, four-wheelers, or ATVs
Contents insurance doesn't cover vehicles, even if they're parked in your garage, because they should be covered by your car insurance policy. However, if someone broke into your vehicle and stole something like a computer or sports equipment, it would be covered under your contents insurance, even if the theft happens away from home!
Types of Contents Insurance in Ontario
There are two ways insurance companies value items: actual cash value (ACV) and guaranteed replacement cost. ACV is the amount needed to replace or repair an item minus depreciation. Replacement cost, on the other hand, is the amount needed to replace an item with a new one. This applies to both home and tenant insurance. Let's dive into these a bit more below.
Actual cash value (ACV)
Actual cash value (ACV) is what an item would sell for today, not what it would cost to buy a new one. In insurance terms, this means you won't get enough money to replace a lost or damaged item with a brand-new version. Instead, you'll receive the item's current value, which has likely gone down since you first bought it.
For example, if your 10-year-old couch gets damaged by a leak from your window, you'll be compensated for what a similar used couch would sell for now. Since ACV takes depreciation into account, you might end up paying the difference out of pocket between the insurance payout and the cost of a new couch.
Because insurance companies don't pay out as much with ACV, this type of coverage is usually more affordable than replacement-cost insurance. However, keep in mind that if you need to make a claim, you might have to cover some of the cost yourself to replace your belongings with new ones.
Guaranteed replacement cost
Guaranteed replacement cost is what the insurance company would pay to replace your belongings if they were stolen or damaged. It gives you enough money to replace lost or damaged items with new or similar ones.
The big advantage of replacement cost insurance is that it covers the full amount needed to replace your things. So, even if an item has depreciated in value, you'll still get enough money to buy a new one. However, keep in mind that this kind of insurance typically comes with a higher premium than actual cash-value coverage.
How much insurance do you need in Ontario?
As we mentioned earlier, contents insurance covers your belongings up to a certain dollar amount or limit. If you own your home, the amount of contents insurance coverage is usually a percentage of what your home is insured for. If you're renting, contents coverage and third-party coverage are typically included in your tenant's insurance.
Many people underestimate the value of their stuff, and cheaper insurance might not give you enough protection. While it might save you some money on your premiums, it will likely cost you significantly more to replace everything in the event of a sudden loss.
To figure out how much coverage you need, go through your home room by room, create an inventory list, and add up the value of everything. Your policy limit should be enough to replace most or all of your belongings.
What is a policy limit?
Your policy limit is the maximum amount your insurance company will pay for your personal belongings if you have a covered loss. You'll find this limit outlined in your home insurance policy.
If you own valuable items, you may want to think about getting additional coverage for a higher policy limit. This is because, in addition to standard coverage limits, your policy may not cover certain high-value items. For instance, if you have a collection of high-value collectibles, valuable jewellery, vinyl records, or musical instruments, you should talk to your insurance provider about how much extra coverage you'll need to keep them protected or whether you should switch to a high-value house insurance policy.
Named perils vs. comprehensive coverage
There are two types of coverage levels for home insurance that affect your contents insurance coverage: named perils and comprehensive. Each level affects how your personal belongings are protected. Here's how they differ:
Named perils
Named perils coverage is only for the specific “perils” or risks listed in your contents insurance policy, like fire, theft, explosions, falling objects, lightning, and smoke. You decide which risks you want coverage for, but keep in mind that if a risk isn’t listed, it won’t be covered. So, if your policy includes fire and theft but not explosions, your belongings wouldn't be covered if a gas leak caused your home to explode.
With named perils coverage, you can also choose specific items to be covered by certain risks. For example, if you cover your electronics against theft but a burglar also takes your furniture, appliances, and clothing, your insurance would only pay for the stolen electronics since the other items weren’t covered in your policy.
Named perils coverage is usually cheaper than comprehensive because it offers less protection.
Comprehensive
Comprehensive home insurance, or all-perils insurance, also covers your personal belongings in case of damage or loss. The difference between the two is that with comprehensive insurance, your belongings are covered for everything unless it's specifically excluded from your policy.
A key difference between these two policies is who has to prove what. With comprehensive coverage, the insurance company carries the burden of proof. They have to show that a claim is excluded by the policy to deny it. On the other hand, with named perils coverage, it's up to you, the policyholder, to prove that your claim falls under one of the covered perils.
Since comprehensive offers more coverage than named perils, it's typically more expensive to have.
How much does content insurance cost in Ontario?
The average cost of insurance in Ontario varies, as it depends on what you're insuring. Since there are many ways to customize your coverage, the best way to find out how much a policy will cost is to get a quote from an insurance company or broker. Each company calculates this a bit differently, but here are some factors that can affect the cost of your contents insurance:
- Whether you choose named perils or comprehensive coverage
- What your coverage limit is
- Whether you choose replacement cost or actual cash value
- Your insurance deductible(s)
- Where you’re located
- If you need additional coverage for high-value items
- Any exclusions on your policy
To get an accurate quote for contents insurance, reach out to BrokerLink. Our insurance advisors can compare multiple quotes on your behalf from several top Ontario insurance companies to find you the best coverage at the right price.
How to file a contents insurance claim
There are many ways to prevent a home insurance claim, but if you find yourself needing to file one, don't fret! Filing a contents insurance claim works just like any other home insurance claim.
If you experience a loss of your belongings, the first step in a personal insurance claim is to contact your insurer as soon as possible. You’ll have to complete some paperwork, and your insurance agent will give you a claim number to keep track of how things are going. Depending on the type of claim, they might also send a claims adjuster to your place to look at the damage. The adjuster will then give an estimate or suggest the next steps for replacing the lost items.
Keep in mind that content claims are separate from any damage to your home's structure. When you file a claim, you'll need to provide an itemized list of everything that was lost, stolen, or damaged. Remember how we mentioned earlier that it's important to keep a home inventory list? This is exactly why.
You'll need to provide the following for each item:
- What the item is
- The brand and model of the item
- How old the item is
- How much the item originally cost
- Where you purchased/received the item from
- If you have them, the original receipts or warranties
- A picture of the item
What if you don't have an itemized list of your belongings?
Having a home inventory is crucial if you ever need to file a claim. Trying to remember all the details about your belongings—like where you bought them, who you inherited them from, and their value—can be really tough, especially while facing a major tragedy.
If you have a prepared inventory, you can submit that list to your insurance company if something happens. They’ll evaluate the loss and pay you accordingly. Without an inventory, you'll end up guessing a lot, which can make the process more complicated. There's also the possibility that you may end up receiving a smaller payout since you cannot prove you owned all of the items you're trying to claim.
In the event that you don’t have a list, taking photos of your rooms and items can help you jog your memory in the event that something does happen. Just remember to update the photos annually, especially if you buy new furniture or an expensive new item such as a computer or television.
Get contents insurance in Ontario from BrokerLink today
At BrokerLink, we're here to help you find a policy that covers your personal belongings. Our team of experienced brokers works hard every day to protect homeowners and renters with the right insurance. Our goal is to find you the best coverage possible so you don’t have to worry if the unexpected happens. We can also help you review your home insurance policy to ensure you have the right amount of coverage for your needs and even help you save money by bundling your insurance with other policies like your auto insurance.
You can reach us by phone, email, or in person at any one of our locations throughout Ontario. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.
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