by Cassie Steele
Buying A New Home: How You Can Protect Yourself And Your New Home
Canadian cities such as Calgary have some of the highest homeownership rates in the world. As more people make the decision to secure their very first home, they are faced with major decisions that come with owning a home, from the application and securing of a mortgage to choosing how to protect it and themselves. Buying a home is a sizeable investment; home prices in Calgary average around $491,000. While home insurance is not legally required in Canada, it makes sense that given that it is such a monumental decision in your adult life, you should take steps to protect your new home and its contents. We cannot predict the future, but it is somewhat reassuring to know that, should an unwanted outcome occur, you and your family are protected. However, the process of choosing home insurance is not as straightforward as it may seem. If you are to get the best value and the best fit for your situation, you need to do your homework and choose wisely.
Get To Know Your Rebuild Value Cap
Your rebuild value will help to dictate how much you insure your home for. For new homeowners, you can normally find this on either your mortgage documents or through the valuation your bank and lender would have done during the process of you buying your home. Keep in mind that your new home’s current estimated market price may not be the same as the rebuilding value, since the rebuild cost covers the reconstruction of your home should it be damaged beyond repair, including the labor hours (not profits). This is important, since you do not want to insure for a higher amount than it actually is: a higher valued insurance policy comes with higher premiums.
Dissect The Terms Of Your Coverage
Before agreeing on any home insurance policy, it is vital that you know the benefits included and the terms on which they can be accessed. New homeowners in major Canadian cities pay around $780 annually for home insurance, which is a big increase from what they would pay when renting. To get value for your money, get to know what the coverage limits are and how far it extends when it comes to the contents of your home and events that qualify for reimbursement. While most companies cover the standard events such as fire and water damage, some of them will have fine print stipulating the events surrounding the fire and your contribution to it, that may affect the amount you are reimbursed. The length of the process is important as well. A long application and repayment process can affect your timeline in repairs, and sometimes leave you having to access additional finance to cover the gap. Finally, be sure to find out the excess you are required to pay. There will be different excesses according to the risks covered.
Don’t Forget To Protect The HomeOwner
Take a look at not just protecting the home but also its homeowners. Many consumers do not make the link between homeowner insurance and home insurance. Loss of job, injury or other illness can affect your ability to work and to make your mortgage payment, which means you can end up being in payment default, damaging or lowering your current credit rating, and in some cases, losing your home. Take the time to find the right health cover for yourself, and be sure to cover all other bases, including loss of income due to illness and loss of employment. By doing this, you are giving yourself and your family some time to recover from any events, and possibly ensuring ownership of your home in difficult times.
Combine Contents And Building For Value
Many insurers offer discounts and package deals for those homeowners that opt to secure both building and content insurance with them. A comprehensive policy covers both the building and all contents in it, while a standard policy will only apply to specifically named contents and risks. There is also personal liability coverage that can be added in, which protects homeowners from being out of pocket should unexpected events occur in their home that cause harm to others.
In a lot of cases, this can work out to be much cheaper than separating the two. However, do your homework and get quotes from other insurers just to be sure, and don’t forget to secure additional cover for other items in the house, such as mobile or tablet insurance. Check what is not covered by the combined policies so you can avoid paying double deductibles.
Buying a new home is a huge step in anyone’s life. Your home is likely to be one of the largest investments you make, and even beyond your financial commitment, it will carry great sentimental value, as it is filled with memories and treasured moments with your family. Taking the steps to protect it is the right thing to do. Incorporating some of these tips can make you do it in the best way possible.