Two winters ago, I woke up to the dreadful sound of rain in my bedroom. A whole lot of snow on my roof had melted into ice water and was streaming in through my ceiling and down my walls.
The roofer who came to the rescue gleefully told me that a mere $5 worth of sealant around my skylight could have prevented what turned into thousands of dollars of repairs and drywall dust for days. It was a real-life lesson on “an ounce of prevention” thinking. I also learned a lot about home insurance that day.
Know Your Home Insurance Coverage Before You Need It
Before that awful morning, I assumed the homeowner insurance policy for my townhouse would have considered damage from an unpredictable icy deluge one of the many “covered perils” listed in a comprehensive plan. Not so.
Because the damage was due to something preventable, it was not covered. So, even though I was not about to start hopping up on my roof to check for sun-dried sealant, it was still my responsibility as a homeowner to ensure it was maintained. And because I live in a townhouse, I am lucky the damage didn’t extend to any walls I share with my neighbours.
Suffice to say that homeownership comes with many surprises and complications, even at the best of times. And, let’s face it – these are not the best of times. The COVID-19 pandemic has left many of us unemployed, facing financial hardship, and feeling overwhelmed and unequipped. Probably the last thing on your mind is your insurance – but it should be. Even though finances might be tight, your home insurance is not a place to cut corners. It is more important than ever.
Home insurance 101
Your home insurance coverage needs depend on both the type of dwelling you have and how you are using it. Insurance for your home comes in a few different forms and policies:
- Contents insurance protects the contents within your home, garage, condo or storage space.
- Tenants insurance protects your belongings if you are a renter.
- Condo insurance covers your belongings, but also things like loss of use, in the event you cannot live in your suite, duplex, or townhouse due to property damage or liability not covered by the corporation's policy.
Homeowner insurance policies cover freehold homes including detached, duplexes, and townhouses, which are not part of a condo corporation. For the latter two, ownership is often subject to a party-wall agreement, which dictates responsibilities related to the adjoining walls shared between the units. There are a few different types of homeowner policies, including:
- A special or comprehensive policy: Covers both the dwelling and contents for “all perils” of direct physical loss or damage except those specifically excluded.
- A broad policy: Insures your dwelling for only for “named perils” of direct physical loss or damage, unless the loss is specifically excluded from the policy.
- A no-frills policy: Offers basic coverage.
Are You Working from Home? Check Your Policy Terms
If you are lucky enough to have a job still and are working from home, you’ve likely developed some new juggling skills. For example, you are standing over a hot stove, wielding a frying pan with one hand while navigating a conference call with your laptop perched a few inches away from your hot burner.
Sound familiar? Did you know that cooking is the No. 1 cause of house fires? Now that you are sheltering at home, it’s a great time to slow down, take stock, and make sure that your shelter is safe, protected, and in good condition.
Pretend you are a house inspector. What needs fixing, cleaning, or replacing? If you are spending a lot more time living and working in your space, your appliances and utilities are likely being used a lot more. Making sure things are safe and efficient may save you money on insurance premiums in the future.
For example, check if:
- Smoke and carbon dioxide detectors are working (both are mandatory in Ontario and Alberta)
- Furnace filters have been recently changed
- Your oven, chimney, and barbeque is clean
- Your dryer is free from lint
- Your plumbing and roof are intact and have no leaks
Friends Crashing on Your Couch? Your Insurance Rep Needs to Know
Another thing that may affect your insurance is if your home has suddenly gained more occupants. If the pandemic has left your brother or best friend jobless and needing a place to stay for a while, don’t forget to tell your insurance company.
Even if a friend or family member moves in temporarily, you must inform your provider in writing. It is important. Failure to disclose this information may void your home insurance policy at a time when you might need it most.
Your home insurance policy only covers your property, contents, and personal liability and that of your spouse and dependents. Should something happen to your boarder’s belongings, you may be held responsible for compensation for that person’s lost or damaged contents. Or if they unintentionally damage your property while staying there, you may not be covered.
You may also want to consider liability insurance in case a visitor incurs personal property damage or injury during their stay with you.
Did You Get New Stuff Recently? You May Need an Insurance Update
Setting up a home office may mean you have had to make some significant equipment purchases or upgrades to your living space. Some of these purchases may require you to increase your contents insurance premiums, and others may give you a break on your home insurance.
For example, you are upgrading an alarm system or appliances. You may also want to make sure you are covered for things like cybercrime since you are now using your network for many more things.
Self-Employed? Home and Business Insurance Are Not Created Equal
It’s also important to note that home insurance is not business insurance – it’s not designed to meet the specific needs of self-employed individuals who work from home. You are obligated to notify your home insurance representative of your home-based business. Failure to do so can also compromise your home insurance.
Ensure you have the right coverage for your professional activities. Some insurers may include home-based business coverage within a home insurance policy, but it’s essential to have that conversation with them.
What About That Rental Property or Vacation Home?
Whether it's a country cabin in the woods or a condo in the city that you rent out or keep for yourself, chances are it is unoccupied right now. If you have a basic or no-frills policy on it, consider changing this to a broad or comprehensive home insurance policy, and ensure your contents insurance is also up-to-date. Properties that sit unoccupied or vacant are much more likely to be vandalized or robbed.