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What is home insurance? Everything you need to know.

happy family sitting in their new home amid pile of boxes

Home insurance, also known as homeowner’s insurance, provides coverage for your house and personal property against damage or loss. It also offers liability protection for injuries or damages caused to others on your property. The concept of home insurance has evolved from what was once just ‘fire insurance’ to a comprehensive coverage plan that protects against various risks.

What is home insurance?

Home insurance is a form of property insurance designed to protect an individual’s home against damages to the house itself, or to possessions in the home. It also provides liability coverage against accidents in the home or on the property. Home insurance policies cover expenses that occur when something unexpected or accidental happens to your home and/or your belongings.

Is home insurance mandatory?

While home insurance isn’t mandated by law like car insurance, it’s highly recommended for protecting what may be your most significant asset. Furthermore, if you’re looking to purchase a home most banks and mortgage lenders will require you to have a home insurance policy as part of the financing agreement.

What does home insurance cover?

A standard home insurance policy covers damage to to your house and its attached structures (such as a garage) as well as other permanently installed structures (such as a storage shed or gazebo) on your property. It also provides coverage for damage to your personal belongings and coverage for additional living expenses if you’re unable to live in your home while it’s being repaired due to a covered loss.

Home insurance also offers liability protection which can cover you if someone injures themselves on your property, or if you damage someone else’s property or accidentally injure someone.

Types of home insurance

Home insurance (also known as property insurance) offers the standard coverages listed above. However, property insurance varies depending on the type of property you have. You can purchase tenant’s or renter’s insurance, condo insurance, and cottage or seasonal insurance

You can also purchase additional coverage (also known as endorsements) depending on your assets and your location.

What's Not Covered Under Home Insurance?

While coverage varies from policy to policy, certain exclusions are common to most insurance companies. These include wear and tear, damage caused by vermin, and acts of war, to name a few.

Choosing the Right Coverage

Finding the best coverage that fits your needs can be challenging. Fully customizable packages allow you to add extra coverages, ensuring your policy meets all your unique needs.

How Much Does Home Insurance Cost?

The cost of home insurance depends on various factors such as the amount of coverage you want and the location of your home. While most Ontarians will pay between $1000 to $2,500 a year, some policies can be significantly more expensive. It’s always a good idea to get a quote to understand what home insurance costs may look like for you.

Coverage for Home-based Businesses

If you run a business from your home, an endorsement to your existing home insurance policy may meet your needs. However, in most cases, it makes more sense to look at purchasing a stand-alone in-home business policy that offers more comprehensive coverage with higher equipment and liability limits.  

Bundle and Save

Bundling your home and auto insurance can help you enjoy competitive rates. Bundling can lead to significant savings and also simplifies the management of your policies.

Choosing the right insurance broker, like McLean and Dickey Insurance, can make a significant difference in your experience with home insurance. We can provide you with personalized solutions that fit your needs and budget.

Home insurance is a crucial part of responsible homeownership. It provides a financial safety net for unexpected events, offering peace of mind knowing that your most valuable asset is protected.

So, whether you’re a first-time home buyer or a long-term homeowner, understanding your home insurance options is essential to protect your investment.

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