Do you have enough coverage for your home?


If you have a proper home insurance coverage your home should be valued to the amount it would cost to rebuild the house to the standard it is now which like quality material. Many people think that the amount of insurance they have on their house should be similar to a banks appraisal or the market value of the property. This is not true. Consider an old Victorian style home located in the south end. Market value or appraisal would exceed $500,000 easily.  If this exact home were built  outside of the city, it is very likely the marker value would be less than $250,000. It is important that your insurance company has an appropriate rebuilding cost for the home or you could be left in a tough situation after an unfortunate loss. 


What does my home insurance cover?


A good home insurance policy will cover any source of loss that the wording does not specifically exclude. Some insurance companies will write policies that only cover specific sources of loss called “named perils”. You always want to make sure that the policy that covers your home is a “Comprehensive” policy. The major area of loss in Nova Scotia over the past 5 years has changed drastically. In the past insurance companies paid out the most money for claims relating to fire and oil tank leaks. In recent years, claims relating to water have surpassed both fire and oil to become the number 1 source of loss for homeowners in Nova Scotia. Many companies have begun to limit or completely exclude coverage for damage caused by water. The reason they do this is to be able to attract insurance buyers who are concentrating on the cost of the coverage. It is easy for these companies to offer low prices for their policies when they won’t cover the major sources of claims. It is extremely important to be covered for all sources of water related claims. 


Does my home insurance policy cover me for flood?


Many homeowners are confident that they would be covered by their insurance company if their home was affected by a flood. What they consider to be a flood will determine whether or not they are covered. A good insurance policy will cover the home for the two types of water related damage, “water damage” and sewage backup. These are the number one and two areas of loss in Nova Scotia over the past five years. Water damage covers leaky roofs, damage caused by burst pipes and a overflowing washing machine, among other things. “Sewage backup” coverage provides coverage for backup of water through a method it is meant to leave a home, such as a drain, toilet, downspout of eaves trough. Neither of these coverages will cover damage caused by rising groundwater, water than comes in through cracks in a home’s foundation or damage caused by the continuous leakage of a pipe or other water holding device. Generally these are considered to be uninsurable perils under a personal home insurance policy. 


Broker or direct insurance writer, what is the difference?


In Canada there are two ways that insurance companies can market their policies to potential clients. Insurance companies must choose to do this directly through their employees or they can choose to deal with licensed insurance brokers. Employees of Insurance companies are not required to obtain licenses or take courses, they are only required to be knowledgeable about the policies they sell. The downfall of this is that they may not know what is available in the marketplace. Insurance brokers on the other hand, are required by law to take government licensing examinations. These courses teach them what is available from all companies in the market. Another advantage of having a broker is in the event a client has a question. When you call a broker with a question, the broker will know whether you should or should not bring this information to insurance company. If you have a question for your insurance company and you do not deal with a broker you will not have anyone to advise you before talking to the insurance company about an issue. 


Actual Cash Value Vs Replacement cost!


There are many ways to value property after a loss. Some insurers value property and belongings on Actual Cash Value(ACV) and other value on a replacement cost basis. Do you know which one you have? Do you know which is better? Replacement cost coverage will provide replacement or repair of property with like kind and quality materials in new condition. The limit for the coverage is limited by the cost to actually replace or repair the property. ACV coverage will limit coverage to the replacement cost LESS depreciation. Replacement cost is far better coverage, always make sure that if it is available to you, that you have at least replacement cost coverage for your home and your property on your insurance policy. 


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