What do you need to look for when it comes to purchasing home insurance? Truth be told, many homeowners don’t know and mistakes are easily made. Whether you underinsure your home or belongings or expect things to be covered when they’re not, mistakes happen! Ensure your home and belongings are fully covered by asking yourself the following questions:

What is your policy’s coverage based on?

You might think it makes sense to base your coverage limit on the market value of your home. But the cost of the materials and labour required to rebuild your house could be significantly higher than its market value. If you insure based on your home’s market value, you could be left underinsured and not have enough coverage should you need to rebuild. This mistake can be avoided by insuring your home based on the cost to rebuild instead of on its market value. One thing to note is if you live in an area where market values are high compared to the cost to rebuild, you could be paying for more coverage than you need. Your home insurance broker can help you determine what limit is right for you.

Does your policy cover water damage?

While it’s true that most standard home insurance policies cover some types of water damage , you may be able to purchase additional water damage coverage, to protect you in the event of these increasingly common events, such as overland flooding. Contact your broker to find out if additional water coverage is available to you.

Are you undervaluing your personal belongings?

Remember that big ticket Christmas gift your grandmother gave you? Is it insured? Certain high-value items may require additional insurance coverage. As well, your other personal belongings may be worth a lot more than you think, especially when you add them all up. If your coverage limit is too low, you could find yourself unable to replace essential items following a loss. If you’re unsure of how to keep track of these items, consider creating a home inventory checklist and storing it someplace safe, such as in a fireproof safe.

Are earthquakes covered in your policy?

Your home insurance policy more than likely covers most natural disasters and severe weather events, but it is always good to check with your insurance broker to see what is and what is not included and what you might want to consider adding to your home insurance policy. For example, if you live in an area at risk for earthquakes, you should consider getting this coverage to make sure you’ll be protected in case your home or property sustains damage during an earthquake. 

Can you pay the deductible?

Your deductible is the amount you agree to pay out of your own pocket before your insurer will step in and pay the remaining balance of a claim (up to the limit in your policy, of course). Why is this important? Well, when you’re shopping for home insurance, you may notice that choosing a higher deductible generally leads to a lower premium, which sounds great, but it’s important to choose a deductible you’ll actually be able to pay. Even though a lower deductible might mean your premium payments are slightly higher, that might be easier for you to manage than paying a larger lump-sum deductible in the event of a claim.

Make sure you have the home insurance coverage you need for your lifestyle and for where you live. If you have questions about your home insurance policy or need help updating your coverage, reach out to an OTC  Insurance broker today.