Your home is likely your biggest financial investment so protecting it and its contents should be a priority. Whether you own or rent a house, apartment or condo, home insurance will ensure your biggest assets are covered in case of an incident. Read about the different types of home insurance below, and see which one you may need for your home.
In Ontario, home, condo and tenant insurance are not mandatory by law. However, most banks and mortgage lenders require home buyers to show proof of home insurance before advancing the mortgage. Landlords may require tenants to show proof of tenant insurance before allowing tenants to move in. Condo corporations and lenders may require condo unit owners to show proof of insurance for their unit before they can move in.
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What is homeowners insurance and why have it?
Homeowners insurance is a type of property insurance that covers private residences. It is purchased by homeowners to protect their home’s contents and the homeowner’s
liability. A typical homeowner’s insurance policy will protect against loss that can be a result of fire, theft, hail or windstorm.
Considerations for homeowners
Owning a home is a big responsibility, both financially and physically. The saying “there’s always something to be done in a home” has never been more true. Houses generally require more work and maintenance than apartments, rentals or condos do. If your house is not properly maintained, your insurance company may decide to cancel or not renew your home insurance policy or if you make a claim, they may refuse it.
Here are some general maintenance items to consider:
- Monitor your roof and shingles. Roofs generally need replacing after 20 years as the shingles are not as effective and water can enter your home, resulting in damage to your possessions and potentially your home’s foundation.
- Check for cracks or leaks in walls, floors, windows and foundations, and ensure you seal them. Sealing can help prevent water damage and can also keep your house warmer in the winter and cooler in the summer. Small cracks are often the result of the house shifting or settling, as they all do, but larger cracks can indicate more serious problems. Consult a licensed contractor if you are concerned about the cracks in your home.
- Clear your eavestroughs and downspouts of leaves and other debris annually as they may prevent them from draining properly. It is best to do this in the spring when Ontario generally sees more rainfall.
- Maintain your plumbing system. Never flush dental floss, Q-tips or other personal care products, such as tampons or disposable wipes. Never pour oil, grease or fats down your drains. These items can clog your pipes and/or drains, and should be disposed of according to your municipality’s disposal guidelines. If your insurer has reason to believe that you caused plumbing problems, they might deny a claim caused by a plumbing failure.
What is condo insurance and why have it?
Condo insurance is a type of property insurance that protects units within a condo building. It is purchased by condo unit owners to protect contents such as appliances, clothing and furniture, as well as items stored in a locker, and to provide additional living expenses in the event of an insured loss. Condo insurance also protects the condo unit owner’s liability for any bodily injury or property damage unintentionally caused to others. For example, if a downstairs condo unit’s ceiling has water damage due to the upstairs condo unit’s leaky faucet, the upstairs condo unit owner may be liable to pay for repairs to the ceiling downstairs.
Condo insurance vs. condo building insurance
It is important to note that condo insurance differs from condo building insurance. Condo building insurance is purchased by the condo corporation to cover damage to the building and the building’s common property such as hallways, stairs, roof, pools, recreational rooms, meeting rooms, garages, driveways and lobbies, and liability on the property. It also covers the condo building’s furniture and equipment. Condo building insurance is usually included in a condo unit owner’s monthly maintenance fee.
The condo building insurance often will not cover damage or contents within an individual condo unit. For example if there is damage to a wall within a condo unit, the condo building insurance may not cover the damage, but rather, it may be the responsibility of the condo unit owner to repair the wall.
Condo building insurance is different for each building, as each have their own requirements, needs and risks. When purchasing a condo you have the right to get a copy of the condo building insurance policy. Be sure to carefully read through it so you understand what you may need to cover yourself. Some condo corporations may ask you to get a certain coverage amount for your condo unit, so be sure to understand the requirements of the condo building. As the condo building insurance policy can change from year to year, it is important condo unit owners regularly review their condo building insurance and be sure their own condo unit insurance covers anything else.
An insurance agent or broker can help you understand your condo building insurance and identify appropriate condo insurance policies for your condo unit that are specific to you, your contents, your condo unit and your condo building.
What is tenant insurance and why have it?
Tenant insurance, also known as renter’s insurance, is a type of property insurance for tenants, that is, people who live in but do not own the property. It is purchased by tenants to protect the personal contents within their rental and to provide liability coverage. Contents can include clothing, appliances and furniture, as well as items in a storage unit.
Landlords may require tenants to get tenant insurance prior to moving in. While landlords have building insurance for the entire rental building, that building insurance does not cover a tenant’s contents or liability.
Tenant insurance protects the tenant’s liability for any property damage unintentionally caused to the building. For example, if your dinner catches fire and causes a great deal of damage to your rental and to the neighbouring rental, you would be liable. If you have tenant insurance, the repair to your rental and the neighbouring rental would be covered to the extent of the policy.
Tenant insurance also covers the tenant’s liability for any bodily injury. For example, if a guest falls while in the tenant’s rental, the tenant may be liable to pay for any medical attention required by the guest. If the tenant has tenant insurance, the medical care for the guest may be covered to the extent of the policy.
Be sure to talk with a licensed agent or broker to understand which policy will work for your needs and liability, and disclose all contents to ensure adequate coverage for your possessions.
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