Owning a home can be an overwhelming process. It can be especially true when choosing the right home insurance coverage. We’ve created the following guide to ensure that you and your home are protected long-term.
What is Home Insurance?
The place you choose to live in, whether it’s a house, townhouse or condo, is an investment. This investment extends beyond simply the money you put into your home.
The building itself and all of your possessions inside it hold financial or personal value. Home insurance protects you financially if any unforeseen situations or damage occur, resulting in you needing to cover the cost of repairs and/or replace any contents inside.
Overall, home insurance is similar to most other kinds of insurance. Throughout a predetermined timeline, you make payments to an insurance company which protects the specific assets covered by your policy if an unexpected, insurable event happens.
Why Do You Need Home Insurance?
While many homeowners and renters understand the purpose behind home insurance, it’s common not to know precisely why you need it.
The following list includes just a few reasons why home insurance is a necessity:
1. Help cover emergencies
While you can prepare for some emergencies ahead of time, there will still always be some things that remain out of your control.
Although home insurance is not mandatory in Alberta, it is highly recommended. If you encounter a costly emergency but are uninsured, you could be responsible for paying extensive fees out of pocket.
2. Protect more than your house
Your dream home should physically meet your current needs. However, the structure isn’t the only aspect of a home that you care about. The contents and personal belongings that make up the interior of your house require protection from unforeseen damage, theft or emergencies.
Home insurance coverage can include protections for replacing possessions such as jewelry, garage tools and even items left inside your car. The extent of your coverage will depend on the specific policy you obtain.
3. Required to obtain mortgage
Whenever you try to get a mortgage, there will be additional requirements and expectations before moving forward. You will need to show proof of home insurance before being approved.
As discussed before, a home is considered an investment. This is true for both yourself and the lender providing the mortgage. It’s reasonable to expect the lender to want to protect their investment – same as you. Having home insurance offers an additional level of protection.
What Types of Home Insurance are Available?
Home insurance policies in Alberta will vary depending on the company and your specific household needs. Typically you should expect two types of home insurance to be available: Broad and comprehensive.
- Broad Home Insurance: This coverage will name the perils that you are insured for such as fire, theft, vandalism. It’s essential to keep in mind, however, that it isn’t full coverage. With these policies, your home is only protected for specific perils.
- Comprehensive Home Insurance: The broadest type of insurance, these policies are designed to cover your home and your belongings. They provide coverage for many types of losses unless there is a specific exclusion.
The main difference between the two types of home insurance is that broad home insurance has a limited list of what is insured or considered a “peril.” In contrast, comprehensive insurance lists all instances not covered by your policy – also known as “uninsured perils.”
What Does Home Insurance Cover?
While home insurance coverage varies depending on the policy you choose, there are several common elements you can expect to be included.
1. Dwelling Coverage
If your home is damaged in a fire, lightning storm, or other events, you can count on your home insurance coverage to protect your savings and help you get back on your feet as quickly as possible. Home insurance pays for repairs to both internal and external structural damage. With the right coverage amount, you won’t even have to worry about additional costs.
Coverages may include, but are not necessarily limited to:
- Water damage
It would be best to refer to your specific home insurance policy for a complete list of coverages.
2. Contents Coverage
It’s not much of a home without the lifestyle essentials and little things that make it up. Your furniture, electronics, and personal effects like clothing, jewelry, and other items all help you live comfortably, so losing them would be inconvenient.
The good news is that your home insurance covers your belongings, even when they’re lost while you’re temporarily away from home, such as when you’re on vacation. This coverage may also apply to dependents who live away from home, such as your kids in university.
Talk to your insurance advisor to make sure you have enough coverage. If you have high-value assets like jewelry and paintings whose value exceed the base policy limits, you can also purchase additional coverage to ensure total protection.
3. Personal Liability Coverage
As a homeowner, you are responsible for everything that happens in your home. This includes the safety of your guests and their property. If they suffer an injury—such as slipping on the deck—or damage to their belongings, home insurance provides liability coverage. This covers legal fees, settlements, and other necessary payments if you are found negligent for failing to maintain a safe environment, or causing damage to their property.
4. Additional Living Expenses Coverage
Need to vacate your home while it’s under repair due to an insured loss? No problem! Home insurance covers hotel bills or short-term rentals, food, and other expenses that you would typically have to pay for on your own without enough coverage. Focus on rebuilding your home and easing back to normal without worrying about out-of-pocket expenses.
Protect Your Investments with MMI’s Home Insurance
While different insurance companies and policies provide different coverages, at MMI Insurance, we understand what’s important to you as a homeowner in Alberta. As such, our extensive home insurance policies include the following:
- Guaranteed Replacement Cost Coverage: If your home is destroyed by an insured peril, Guaranteed Replacement Cost Coverage will provide you with the security to know that you will be able to rebuild or replace your home.
- Home Liability Insurance: If a liability claim is made against you, this type of insurance protects you from having to pay out of pocket if you are held liable.
- Sewer Backup Coverage: This policy protects you in case of damage to your home and property as the result of a backed-up sewer.
The above are just a few examples of coverage that protects you in the event of a claim.
If you’re unsure what your current home insurance policy covers, or want to learn more about how MMI Insurance can help protect your home and assets in Alberta, reach out to one of our expert insurance agents today.
How to Find the Right Home Insurance Policy?
Our team of insurance advisors can help you get the right insurance coverage for your home. Call 866-222-6996 to talk to an expert today!
Coverage is subject to policy wording, terms, conditions, and deductibles. Protection is limited to the perils, coverage, exclusions, and limits shown on the policy.