Property Insurance

Property insurance can provide cash to replace damaged or destroyed property and contents. Coverage is available to protect against losses arising from vandalism, theft, fire or natural disasters such as earthquakes. The three types of property insurance are:

  • Homeowner’s
  • Condominium owner’s
  • Renter’s or tenant’s

Homeowner’s

Homeowner's insurance provides coverage for the house, detached structures (such as a garage or shed) and personal contents. Coverage may include:

  • Additional coverage on valuables
  • Personal liability coverage
  • Specialized coverage (such as for earthquakes)
  • Temporary living expenses, if needed

Condominium Owner’s

Condominium owner's insurance is similar to homeowner's insurance, with the exception that it also provides for shared responsibilities that a condominium owner may be liable for, such as common areas and shared building upkeep and maintenance. Condominium owner's insurance also provides for:

  • Personal property
  • Personal liability coverage
  • Upgrades made to your unit
  • Top-up coverage over the condo corporation’s insurance

Personal contents may include contents left in your vehicle.

Renter’s or Tenant’s

Recognizing that renters or tenants do not own the property they live in, their coverage is more limited that property or condominium owner's insurance. For the most part, coverage is limited to the policyholder's personal property. It may also include:

  • Personal liability coverage
  • Temporary living expenses, if needed

Get to Know Your Coverage

Policies can be written to cover personal contents alone, or building/apartment alone (including detached structures), or in any combination to suit your needs, including other considerations such as temporary living expenses. The following sections will discuss some different types of coverage.

Named Perils or Specified Perils

With named or specified perils coverage, only the risks outlined in the policy are covered. Commonly covered perils include fire, lightning, water damage and theft.

All Risk or All Perils

With all risk or all perils coverage, only the items specifically excluded from the policy are not covered. The insurance company may exclude certain items, such as jewellery, furs, silverware, art and certain collectibles, above a specified limit.

For example, Judy has basic property coverage. The insured value on a diamond ring is only $1,000. Her ring is worth $1,500. Unless she increases her coverage, she won’t be able to collect the extra $500 if the ring is lost or stolen.

Rider or Floater

Most policies limit the coverage for certain articles, such as jewellery, furs, silverware, camera equipment, computers, works of art and certain types of collectibles, including stamps, coins and records. If you want to exceed the standard limit for a given article, you can add a rider or floater to your policy. Your premium will increase to reflect this additional coverage.

Personal liability insurance can be purchased along with property insurance, or as a separate insurance plan.

Take Action

When it comes time to purchase property insurance, there are a number of things to take into account. Before or during the insurance purchase, do the following:

  • Purchase property insurance that provides coverage for all risks, replacement value and full reconstruction cost (for property owners).
  • Compile a list of features you want and extras you may want to include, depending on the cost. Your broker can help you with this.
  • Compare features and added benefits between different policies and providers.
  • Shop around for the best protection for your money; policies may differ from company to company. Your broker can help you with this.
  • Look for policies that include $1 to $2 million in personal liability insurance.
  • Complete a pictorial inventory of the contents in your home. It will help prove what you own, if you ever have to make a claim:
    • Store the pictures in a safe place, outside your home.
  • Keep receipts and details about items in your home. Insurance companies often ask for receipts of items, such as electronics, jewellery and collectibles. They may also ask for details about these items, such as the amount you paid, model number, brand, purchase date, and so on.

Five Tips to Save Money on Property Insurance

Insurance policies are not necessarily a one-size-fits-all proposition. You may be able to customize your property insurance to meet your specific needs and budget. To reduce the cost of property insurance, consider doing the following:

  1. Increase your deductible
  2. Install a burglar alarm
  3. Install smoke detectors
  4. Look for discounted rates (through your work or associations to which you belong)
  5. Consolidate your property and auto coverage with the same provider

Limit Your Claims

If you make a lot of insurance claims, you'll pay more for your premiums. After several claims, your insurance company may decide not to renew your policy. You then may find it extremely difficult to get coverage elsewhere. If you suffer a minor loss that you can comfortably cover within your budget, it may make more economic sense, in the long run, to cover the damages yourself rather than filing an insurance claim.

Make sure you know what you are covered for and not. You might be surprised when making a claim.