Home Insurance Basics for First-time Homeowners

Posted by Justin Havre on Tuesday, May 15th, 2018 at 10:01am.

What Should First-time Homebuyers Know About Home Insurance?Home insurance is often necessary for first-time homebuyers. However, all home insurance companies and their policies are not the same and some groups of customers have been less than satisfied with their home insurance company in Canada. Home insurance is generally needed for those homebuyers taking out a home mortgage loan on a home. What should homebuyers know about home insurance before choosing a policy?

Why Homeowners Buy Home Insurance

A house is an investment and it can be expensive to make repairs should serious damage occur. A home is vulnerable to vandalism, fire, storm damage and more. Homeowners can protect the equity in their home when purchasing home insurance. Home insurance policies can differ significantly. Homeowners should learn what types of coverage, discounts and premiums may apply in policies. Home insurance is not legally required in Canada. However, the majority of home mortgage lenders want proof of home insurance before giving a loan to purchase a home.

Home Insurance Coverage

Homeowners can expect home insurance to apply to the contents, the dwelling and personality liability of the policyholder and their immediate family. Those who rent out part of a home should inform their insurance representative. Additional living costs may be covered when a policyholder needs to file a claim and cannot reside in a home due to property damage.

Dissatisfaction with Home Insurance

Gen Y customers are among those that have become more critical of home insurance service interactions. There are many aspects that one many want to review in regards to customer satisfaction. These areas include:

  • Non-claim interaction
  • Price
  • Policy offerings
  • Billing and payment
  • Claims

It appears that non-claim interaction, according to one study, is the main reason for declining satisfaction with home insurance companies. Those who require home insurance may want to look for a company known to help customers understand their bill payment options, policy coverage options and what to do in the event of having to file a claim. There are many providers of home insurance and those with the highest satisfaction rankings include The Co-operators, State Farm, RBC Insurance, The Personal, Intact Insurance, La Capitale, BCAA, Portage Mutual Insurance and Intact Insurance. Providers and satisfaction rankings vary by region.

Obligations for Homeowners

It may be difficult to file a claim in instances when changes to a property have not been reported. Insurance professionals should be contacted when a policy holder:

  • Purchases art or jewelry
  • Leases any portion of a property
  • Starts a home-based business
  • Installs a spa or pool
  • Renovates a home

Providing accurate information to an insurance professional can make it easier to process claims after a loss. A break-in, vandalism, or fire can cause unforeseen financial hardship. Home insurance can help cover losses for those affected. First-time homebuyers may want to insure for replacement value in the case of severe weather and for rebuilding costs. Before renewing a policy, it is useful to perform a home inventory on an annual basis. This can make it easier to initiate a claim if needed.

Understand Home Insurance Coverage

As many first-time homebuyers need to have home insurance in order to purchase a Black Mountain home, it is useful to learn more about home insurance coverage, types of policies and the processes that occur in the event of substantial damage or loss. Work with an insurance professional ready to explain these aspects and more and give them the opportunity to exceed your expectations.

Justin Havre

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