Essential Coverages to Consider for Homeowners Insurance.
When it comes to homeowners insurance in Ontario, there are several important coverages that can make a significant difference in the event of a loss. Ensuring you have the right coverage and limits in place is critical, especially given Ontario’s unique climate and risks. Here are some essential coverages to discuss with your insurance agent:
1. Guaranteed Replacement Cost Coverage
This coverage ensures that your home will be rebuilt or repaired to its original condition, even if the cost exceeds your policy’s dwelling limit. It may have different names depending on your insurance provider. But it’s typically called Dwelling Amount or Replacement Cost.
Why It’s Important:
- Building materials and labour costs can fluctuate significantly every year, especially during inflation or supply chain disruptions.
- Without guaranteed replacement cost, you could be on the hook for out-of-pocket costs if rebuilding exceeds your policy’s dwelling limit.
Ask Your Agent:
- Is guaranteed replacement cost included in my policy?
- How can I add it if I don’t have it?
2. Sewer Backup Coverage
Sewer backup coverage protects against damage caused by water backing up through drains, sewers, or sump pumps. This is an optional add-on but is essential in many areas of Ontario prone to heavy rainfall or aging sewer systems. It can happen to anyone at any time. Just because you’ve lived in a place for 20 years without any issues doesn’t mean something couldn’t happen to your property in the future.
Why It’s Important:
- Sewer backups can cause extensive damage to basements, flooring, and personal belongings.
- Drywalls, water heater tanks, furniture, and more could be permanently damaged.
- Standard homeowners insurance typically does not cover sewer backup without this add-on.
Ask Your Agent:
- Is sewer backup included in my policy, or can I add it?
- What are the limits and deductibles for sewer backup claims?
3. Overland Water Coverage or Flood
This coverage protects against water damage caused by the overflow of rivers, lakes, or heavy rainfall entering your home at ground level. Like sewer backup, overland water coverage is usually an optional add-on.
Why It’s Important:
- Flooding is becoming more frequent in Ontario due to changing weather patterns.
- Government disaster assistance programs are often limited, leaving homeowners financially exposed.
Ask Your Agent:
- Do I have flood coverage on my policy?
- Are there any exclusions or limitations (e.g., coverage for specific events or water sources)? Deductibles?
4. Detached Structures Coverage
This coverage protects structures on your property that are not attached to your home, such as garages, sheds, or gazebos.
Why It’s Important:
- Ontario winters can be tough on outbuildings, leading to damage from snow, ice, or wind.
- Homeowners often forget to update their policies when they add or upgrade detached structures.
Ask Your Agent:
- What is the limit for detached structures on my policy?
- Can I increase the coverage if needed?
5. Additional Living Expenses (ALE)
This coverage pays for temporary housing and other living expenses if your home becomes uninhabitable due to an insured loss.
Why It’s Important:
- If your home is damaged by fire, flooding, or another disaster, you may need to live elsewhere for weeks or months during repairs.
- Without adequate ALE coverage, you may face high out-of-pocket costs for temporary accommodations.
Ask Your Agent:
- How much coverage is provided for additional living expenses?
- Is there a time limit or cap on the amount I can claim?
6. Personal Liability Coverage
Liability coverage protects you if someone is injured on your property or if you accidentally cause damage to someone else’s property. It can also protect you if you cause bodily injury to somebody else by accident. Many insurance companies provide this coverage worldwide! So, even if this happens in a different country and you get sued, you can use your property’s liability insurance. The key word here is ” Accidental “. Check with your provider to see the coverage details.
Why It’s Important:
- Medical and legal costs from lawsuits can be financially devastating.
- Liability coverage applies even if the injury or damage occurs away from your home (e.g. if your dog bites someone at a park).
Ask Your Agent:
- What is the liability limit on my policy? Does this coverage work outside Ontario or Canada?
- Should I increase my limit or consider an umbrella policy for additional protection?
7. Contents and Personal Property Coverage
This coverage protects your personal belongings, such as furniture, clothing, electronics, jewelry, and more, from theft or damage caused by an insured peril.
Why It’s Important:
- High-value items like jewelry, art, or collectibles may not be fully covered under standard limits.
- Replacement costs for electronics and appliances can add up quickly.
Ask Your Agent:
- What are the limits for personal property coverage? How can I get more coverage?
- Do I need scheduled coverage for high-value items?
8. Wind and Hail Coverage
Ontario’s weather can be unpredictable, with severe wind and hailstorms causing significant damage to homes. Did you know the age of your roof is also a factor that could deny a claim?
Why It’s Important:
- Standard policies typically cover wind and hail damage, but it’s essential to confirm any exclusions or special conditions.
Ask Your Agent:
- Are there any limitations on wind or hail damage coverage?
- What deductible applies to these types of claims?
Always read your documents carefully and ask your broker/agent questions. They’re there to answer your questions and help you get the coverage you specifically require for your property.
