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5 Common Misconceptions About Home Insurance

When it comes to what your home insurance will and won’t do, there’s a staggering amount of false information floating around online. It’s easy to read something in passing and go on to make significant (and sometimes expensive) decisions based on that faulty narrative. 

A lot of the confusion can be cleared up by simply exploring your policy in greater detail, but we understand that few clients have the time to read as thoroughly as they might prefer. Today, we’re going to debunk five of the most common myths that exist regarding your home insurance and what it will – or won’t – cover.

1. “My home insurance protects all my valuables.”

Not necessarily. It is true that most home insurance policies will cover valuables up to a certain limit or per item, but if you want protection for anything that exceeds those limits, it’s up to you to add additional coverage to your insurance policy. Every policy is different, but usually, the limits apply to electronics, art, jewelry, and musical instruments.

2. “I don’t have a choice to buy home insurance or not. It’s mandatory, right?”

Wrong. Home insurance isn’t required by the government, but it is required by most mortgage lenders. If you own your home outright, then you may not be obligated to buy home insurance at all (but we still think it’s a good idea, especially if your home is old or located in an area prone to inclement weather).

3. “When we go on vacation, our home insurance will automatically take care of everything.”

If you head off on a road trip just by throwing your things in the car and locking the front door, you might be in for an unpleasant surprise when you return. It’s true that your house insurance policy will protect your home while you’re gone, but usually only if you actively take certain precautions beforehand. 

Some policies will ask you to turn off all water before you leave to minimize the chances of burst pipes. Others will only protect your home if you can arrange for a friend or neighbour to physically enter and check the property once every day. The best way to know for sure what your home insurance protects you from is to check your policy or ask your insurance broker to explain it.

4. “If we want to upgrade our home, our insurance policy will cover it!”

Slow down there; your house insurance is designed to cover you in the case of accidental damage to your property, like a tree limb smashing the roof or surprise flooding. Unfortunately, normal wear-and-tear from living in your home and using its appliances isn’t covered, so if you want to upgrade to a spiffy new refrigerator, you’re probably going to have to pay for it out-of-pocket.

5.“If we’re paying for home insurance anyway, we can go ahead and make as many claims as we want under it.”

This sounds fine in theory, but it’ll do you more harm than good in the long run. Home insurance is designed to be your life raft in the event of an emergency, not a personal piggy bank. Most policies lay out a deductible up front, and if the loss you’re trying to recover is less than that deductible, your insurance won’t pay for it. 

Your policy may also offer a claims-free discount, which is only good for one claim every three years or so (depending on your specific policy). If you burn that discount to get a payout that’s only marginally higher than your deductible, you sabotage yourself in the event that an accident does occur in the future and you need to file a much larger claim. If you’re in doubt as to whether it’s worth filing a claim or not, your insurance broker will be able to provide more insight as to your specific policy.

 

If there’s a single thing we want you to take away from this article, it’s this: make no assumptions about your home insurance policy until you’ve asked your insurance broker. At Will Marshall, we have decades of experience navigating the different requirements and regulations of Ontario policies, and we know both what the usual standards are and where individual insurance companies may differ from what they offer. No matter whether you’re coming in with an existing policy or applying for a brand-new one, we’ll clearly explain what your home insurance can do for you.

For more information about finding house insurance for your home or residential property, give us a call at (705) 726-2551. You can also contact us online.

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