For most people, home ownership represents their single largest financial investment. According to the 2013-2014 Canadian Homebuying Trends Report by RE/MAX, 71% of prospective purchasers surveyed in British Columbia believe that housing values will climb or remain the same in the next 12 months. Whether you are a new homeowner, about to renovate or sell, making informed decisions about your home insurance is essential to protecting this valuable asset.
Looking to move up?
With 68% of prospective B.C. buyers ready to trade in a starter home or take their third or fourth step up the property ladder, moving up is trending. While aesthetic features like curb appeal, gourmet kitchen appliances and character features may top your list—Park Insurance is happy to review basic construction features when assessing potential insurance options for your new home policy. Rosanne Queen, Manager – Group & Direct Sales advises: “For older homes, it’s important to know if the wiring, roof, furnace and plumbing are updated. Is there an oil tank or woodstove on the premises? Is the wiring made of aluminum, or knob and tube? Are the water pipes made of polybutylene or ‘Poly B’?”
From a safety perspective, are railings installed for all stairs, decks and balconies? Liability is a consideration with swimming pools. And, if you plan on operating any type of business from your new home, check local bylaws to confirm there are no restrictions. The Insurance Bureau of Canada also cites proximity to a fire hydrant, (in particular, for rural properties), replacement cost (square footage and construction quality), wood-burning stoves (new or additional), and the age of your roof (ideally <20 years) as key items that may impact your insurance costs.
Ready to remodel?
Now that you’ve discovered the perfect location, community and neighbours, your attention may turn to a bathroom or kitchen remodel, or full-scale renovation inspired by HGTV. A 2012 Canada Mortgage and Housing Corporation report notes that 1.7 million households in 10 major cities spent $20.9 billion in 2011 on renovations. Almost 80% of home renovations are designed to add value, update or sell a home.
Rosanne recommends, “Contact us before you start renovating to make sure your home is insured to value. Also, moving offsite during a renovation can impact your insurance. And if you use a contractor, we recommend that they have liability insurance.” A home insurance policy will often exclude vandalism, water damage and glass breakage for buildings that are under construction or vacant; therefore, depending on the extent of your project, special coverage during your renovation may be needed. The Guaranteed Replacement Cost (GRC) protection is based on the condition of your home when the policy was purchased, therefore, unreported renovations or improvements could result in the insurance company voiding GRC protection in the event of a claim. Because renovations may increase the ‘replacement cost’ value of a home, insurance companies need to adjust coverage and premiums accordingly.
‘For sale’ sign on your lawn?
“If you move out before your house is sold, you need to inform your insurance company,” advises Rosanne. She notes that “shutting off the water supply and draining your pipes can prevent issues in the event of sudden temperature changes – such as water damage due to frozen or burst pipes.” With anyone able to view interior photos of listed properties online, vacant homes can draw unwanted attention from thieves and vandals. Ensuring that you, or a responsible friend or family member, checks your vacant residence every day, installing monitored water flow and/or security alarms can help protect your property and give you piece of mind.
Contact our experienced insurance advisors at 1-800-663-3739 to learn more.