Don McCormick

HOMEFINDER: Residential insurance needs vary from home to home

Insurance brokers can help design an appropriate policy for whatever your specific needs

Home insurance is a consideration, even before you buy a home.

Don McCormick of Maxxam Insurance in Langford said a number of mitigating factors can affect the cost of residential insurance. House hunters may want to consider these before they they sign on the dotted line for their new home.

“From a neighbourhood point of view, do you have fire hydrants? Or wells with no fire hydrant?” McCormick asked. “You may live halfway between Jordan River and Port Renfrew and you might not have any fire protection. That increases the cost of insurance.”

Finding a nice house where there is less fire protection infrastructure may help keep house prices and potentially property taxes down, he said, but those costs should be weighed against fire insurance costs that could be twice as expensive.

McCormick, who has been a licensed insurance broker for more than four decades, said it’s not just homeowners who should be insured. Tenants living in apartments or rental accommodations should also taking a serious look at doing so but few do.

“Less than 25 per cent (of renters) have tenant’s insurance. There’s no requirement under the landlord tenants act,” he said. “So you cannot make it mandatory that you must have insurance, as opposed to a condominium owner – right in the bylaws, you are required.”

He warned that while a person may know what is happening in their own apartment, you don’t know what is happening next door or above or below you.

If the neighbour’s stove is left and were to catch fire, for example, it could leave you out of house and home, waiting on a bus or in the care of the Red Cross for a lengthy period of time.

Those with tenant insurance, on the other hand, will have much more comfortable accommodations. “You want to be the person in the hotel room watching the fire on TV, not the person on the bus,” he said.

Dividing into segments people who rent, who own condominiums and those that own houses, McCormick said residential insurance, or any insurance for that matter, can be complex.

Licensed insurance brokers are regulated by law and can help homeowners, especially those in their first home, with any questions before or after purchasing a property.

While purchasing insurance isn’t mandatory in British Columbia, McCormick reminds that people seeking mortgages at banks will require insurance for the residential property.

And most, if not all stratas make having residential insurance mandatory, as part of their bylaws.

“Policies are legal documents which are difficult to read, that’s why you need to consult with an insurance broker. Doing it yourself online is not a good idea,” he said. “I have been in the business 42 years and I still take continuing education courses every year. We’re regulated by law and it is mandatory.”

Q: Does home insurance cover everything?

Not necessarily. For example, if your home or its usage has changed, you need to let your insurance broker know. If you plan to renovate any part of your home, lease or rent a portion of your property, or even set up a home-based business, it’s your responsibility as a homeowner to report any changes to your property.

You don’t want to be in a situation where the new addition to your home is not covered, because you forgot to let your insurer know about it.

All of these things can affect your insurance and consulting your broker before these changes happen is important, especially considering that your home is usually the largest financial investment in your life.

Another important consideration is to separately insure any specific high-cost items like original works of art, collectables, or expensive jewellery. Most insurance coverage is limited in this regard.

If these items are important to you ask about optional coverage or look into riders on your main policy. Don’t assume home insurance covers absolutely everything in your house to the full extent of it’s appraised value.

It’s a good idea to read over your policy in its entirety and ask questions if you’re not sure about what is covered.



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