Home insurance protects your house and belongings in case of problems like theft or damage. It can even cover your accommodation costs if you can’t stay in your home after a loss. Understanding how it works is important to get the coverage you need.

What is home insurance?

Home insurance is a contract that protects homeowners, tenants, or co-owners against losses or damages related to their home and personal property. It also covers their civil liability for damages caused to others. Even if it’s not legally required, it’s strongly recommended. In fact, most banks require it before granting a mortgage. Your home insurance is your safety net to sleep soundly, no matter what might happen.

Basic home insurance coverage

Property insurance

Your property insurance protects what you own, like furniture, electronics, and more. Stay calm: in case of fire, theft, or vandalism, you’re generally covered. However, watch out for valuable items! They might need additional protection. Don’t hesitate to discuss this with your insurer to get the right coverage for your needs.

Civil liability

Civil liability kicks in if you’re responsible for damages caused to someone else. For example, if your dog bites the mailman or if your child accidentally breaks the neighbor’s window, this protection covers the resulting costs. It goes even further: if you’re sued, it covers your legal defense costs. In case of an unfavorable judgment, it can also pay the compensation. In short, this guarantee saves you many headaches and protects your wallet.

What types of protection are offered?

Named perils insurance (basic formula)

Named perils insurance is a type of coverage that only protects against risks specifically named in the contract. This typically includes fire, theft, and vandalism. But beware, each contract is different! You must carefully check the list of covered risks in your policy.

This type of protection may seem limited, but it often offers good value for those who want basic coverage.

All risks insurance

All risks insurance covers everything except what is explicitly excluded. It’s a more comprehensive option than the basic formula, as it handles unforeseen situations you might not have thought of. However, this type of coverage can cost more. That’s the price of peace of mind!

Extended coverage insurance

Extended coverage insurance is a bit of the best of both worlds. It combines elements of named perils insurance and all risks insurance. However, it has its own exclusions. For example, it doesn’t cover normal wear and tear of your property. Some types of damage may also require a special endorsement. This formula offers broader protection than the basic one but remains more affordable than the all risks option.

What you need to know about home insurance deductibles

What is a deductible for?

The deductible represents the amount you pay before your insurance pays a claim. This amount plays an important role in your contract. By choosing a higher deductible, you can reduce your insurance premium cost.

However, in case of a loss, you’ll have higher out-of-pocket expenses. Conversely, a lower deductible increases your premium but reduces your financial participation when damage occurs.

Types of deductibles

• Fixed amount: A predetermined amount, for example $500, that you pay for each claim.
• Percentage of insured value: The deductible is calculated based on the total value of your property.
• Risk-specific deductible: Different amounts depending on the type of damage (fire, theft, water damage).

Each type differently influences your claim settlement and premium amount. You need to understand them well to make an informed choice.

Best practices

• Evaluate your financial situation to determine the deductible amount you can afford.
• Compare different deductible scenarios and their impact on your annual premium.
• Ask questions to your insurer to understand the available options.
• Regularly reassess your deductible based on your needs and situation.
• Consider setting money aside to cover your deductible if needed.
• Check if it’s possible to have different deductibles for different types of risks for better protection.

Replacement value vs depreciation

Replacement value

Replacement value allows you to be compensated to acquire an equivalent new item in case of loss. This option offers superior value protection for your belongings, which can be very advantageous. You get a higher reimbursement, allowing you to replace your items with new ones without paying out of pocket. However, note that this coverage may result in a slightly higher insurance premium.

Depreciation

With depreciation, compensation reflects the actual value of your property at the time of loss, taking wear and tear into account. The guarantee amount will generally be lower than with replacement value. The main advantage for the insured is that this option often costs less in insurance premiums. However, you might have to pay money to replace your belongings with new ones.

What to choose?

To help you make an informed choice, here’s a comparison table between replacement value and depreciation:

The choice between these two options depends on your personal situation. In some cases, replacement value might be preferable, such as for a new apartment with valuable items.

In other situations, depreciation might be more suitable, for example for an older home or if you have a limited budget.

Common exclusions

Normal wear and lack of maintenance

Generally, damage caused by wear and tear or insufficient maintenance is not covered by home insurance. It’s important to understand that repairs following these problems remain your responsibility. To avoid claim denial, make sure to do regular maintenance on your property. It will save you many worries!

Floods and sewer backups

Be careful, these losses are often excluded from standard contracts. Water damage can be very expensive. Your insurance doesn’t automatically cover costs related to infiltrations and backups. We recommend checking your policy and adding specific endorsements if necessary.

Earthquakes and ground movements

These events usually aren’t part of basic home protection. As a homeowner, you should consider adding coverage to insure your residence against seismic risks. It can make all the difference in case of loss!

Damage caused by animals and insects

Damage caused by rodent or insect infestations is rarely covered. If you’re a tenant, know that your tenant insurance doesn’t cover this type of problem either. The best approach? Take preventive measures to limit these damages. Your wallet will thank you!

Unspecified valuable items

Your valuable items deserve special attention. Basic property coverage in your home often has limits. For adequate coverage of your jewelry or artwork, don’t forget to declare them specifically. Your insurer can then adjust your policy accordingly.

Undeclared home business activities

Most policies don’t cover commercial activities at home. As a homeowner, if you work from home, talk to your insurer about it. They can offer you coverage that meets your specific needs. Better safe than sorry!

Damage caused by intentional or criminal acts

It might seem obvious, but let’s remind: your coverage doesn’t apply to illegal or voluntary acts. Whether for theft or fire, if you’re responsible for a criminal act, don’t expect compensation. Risk coverage has its limits, and this is an important one!

How does home insurance claims work?

Quickly communicate with your insurer or broker

We recommend contacting your insurer as soon as possible after a loss. The sooner you do it, the sooner your case will be processed. Make sure to clearly explain what happened. A clear summary of the event will help your insurer understand the situation.

Don’t hesitate to take notes before calling to forget nothing. Your broker can also help you with this first step with the insurance company.

Prepare documents

Here’s a list of documents to gather for your claim:

• Proof of purchase (invoices, receipts)
• Photos of damage
• Bank statements showing purchases
• Repair quote

These papers are important and take time to gather. Keep them organized, it will make things easier. For example, if your furniture was damaged, look for original invoices or take photos.

Get an claims adjuster evaluation

A claims adjuster will come to your residence to assess the damage. Their role is to determine the extent of damage and claim amount. Be present during their visit and show them everything that was affected. Your cooperation is essential for fair coverage. The expert will also explain the next steps, whether you’re an owner or tenant.

Provide proof of loss

To properly document your losses:

• Make a detailed list of damaged items
• Note purchase price and date for each item
• Take photos of all damage
• Keep receipts for additional expenses related to the loss

This information will help your insurer calculate the right compensation amount. In Quebec, you’ll often be asked to fill out a special form to declare your personal property.

Monitor work or replacements

Once repairs begin, stay in contact with your insurer. Inform them of work progress and any problems. If new damage is discovered, report it right away. Your insurance policy protects you, but clear communication is necessary.

When everything is finished, you’ll be asked to confirm that building repairs are complete. This will allow closing your claim file.

How to customize your home insurance according to your needs?

Evaluate your personal situation

Start by examining your personal situation. The type of housing you occupy plays a crucial role. Are you a homeowner or apartment tenant? It changes everything!

A homeowner will need more extensive coverage, including building structure. A tenant will focus more on protecting personal property.

Do you have a home business? In this case, additional protection might be necessary to cover your professional equipment.

Each profile requires different adjustments. For example, an old house owner might need more coverage for repairs, while a modern apartment tenant might focus on theft protection.

Choose the right protections

Once your situation is evaluated, let’s move to protections. Your home’s location is a key factor. Do you live in an area at risk of flooding or earthquake? If so, specific endorsements might be necessary.

Don’t forget to adjust your coverage based on your property value. Make an inventory of your possessions and estimate their total value. This will help determine how much protection you need.

For risks specific to your region, like floods or earthquakes, endorsements can be essential. Don’t neglect them! They could make all the difference in case of loss.

Work with a home insurance broker

A home insurance broker is your best ally in this process. Their expertise will allow you to effectively compare different policies. They can explain the subtleties of each option and help you make the best choice. Moreover, a good broker will know how to negotiate competitive rates on your behalf. They know market offers and can help you benefit from the best conditions.

Get advice for your home insurance!

Looking to protect your residence with home insurance? At Gendron Assurance, we offer personalized support to find the perfect coverage. Our experts are here to guide you and simplify the process. Fill out our form today to get advice tailored to your needs!

Frequently asked questions about home insurance and how it works

What type of policy covers an apartment?

Condo insurance provides protection for your living space interior and civil liability. It’s essential for owners, as the law requires liability coverage. Your policy guarantees your personal property against various risks while ensuring your peace of mind.

How does the contract protect my personal furniture?

Your home insurance policy protects you against theft, fire, and vandalism. It also covers damage caused by unforeseen events. In case of loss, reimbursement depends on the chosen option: replacement value or new value.

What if my residence is located near a flood risk?

A coverage extension is necessary to cover flood-related damage. Standard protection generally doesn’t include this type of damage. Adding this supplementary coverage can influence your home insurance premium amount.

Can I cancel my insurance whenever I want?

Although not legally required, home insurance is often required by lenders. You can cancel your contract while respecting certain terms. Beware, not respecting cancellation conditions could result in financial penalties.