Your home is probably your largest and most important investment. It is also one of the most important assets you and your family own. An insurance policy will help you protect that investment. If you were to suddenly lose your home due to fire or have the contents damaged or stolen, like most of us, you probably could not afford to replace everything immediately. In addition, if someone sued you for an injury or damage caused by you or arising from your property, the cost of defending that suit could run into tens of thousands of dollars in legal fees (in addition to any judgement or settlement). All of these situations are covered by a homeowner’s package policy. Important: Park Insurance works to get you the right coverage that:
- Protects your assets
- Delivers problem-free claims processing and satisfaction
- Provides peace-of-mind
We provide insurance packages for the following:
- Standard homeowners policies
- Specialty homeowners policies – homes over $1,000,000
- Condominium owners policies
- Tenant policies
- Seasonal residential policies
- Rental property policies
- Small home-based business packages
Contact us—the friendly experts—as we will be pleased to answer your questions and provide you with the information you need to make an informed decision about your home insurance.
Basics of a Homeowners Policy
Homeowners’ insurance provides protection against various risks such as:
- Property damage coverage protects your home or belongings if they are damaged or destroyed by certain causes
- Liability coverage will pay for costs incurred if you cause another person to be injured or another person’s property to be damaged or destroyed
- Additional living expenses coverage will pay for you to move into a motel or apartment temporarily and will cover certain other additional living expenses when you cannot live in your home because of damage that is covered by your policy
- Other coverage is also available through your homeowner’s policy for such things as other structures or greenery on your property, debris removal, home-based businesses, etc.
Let’s consider in greater detail each of these types of coverage.
Property Damage Coverage
This coverage offers protection of your property against damage or loss from fire and other causes such as windstorm, hail, vandalism and theft. Property damage coverage is further available as either a “named perils” policy or an “all risks” policy. The “named perils” policy covers you against perils that are specifically named in the policy. The “all risks” policy covers you for damage or loss to your property from all causes except those that are specially listed as exclusions in your policy. Park Insurance offers both “named perils” and “all risks” homeowner’s insurance policies. However, it is important to realize that even an “all risks” policy does not cover all losses. For example, no homeowner’s policy pays for damages caused by flood. Nor does it cover rust, corrosion or dry rot. Personal Property: This coverage provides protection for the contents of your home against fire, theft, and vandalism. In fact, in some cases your personal property is covered if it is stolen or damaged away from home, such as when you are on vacation. Some personal property classes have special limits such as for jewellery, cash, and bicycles. Additional coverage can be purchased for these items. Contact us for more details.
Under the liability section of your homeowner’s policy your insurance company will pay if another person is injured or if another person’s belongings are damaged due to your fault, though unintentional. Liability coverage in a homeowner’s policy is not limited to accidents that occur at your home. It provides protection for you and your family wherever an accident may occur worldwide. For example, your insurance will protect you if:
- Your child injures a playmate at school
- You hit a golf ball through a window
- The letter carrier slips and falls on your front steps
- You accidentally break a window at a store
- Your dog bites a neighbour
When you or a member of your family are legally responsible for injury to others, the liability coverage under your homeowners policy will usually cover the damage and pay for a lawyer to defend you. There are some exceptions. The liability coverage will not protect you if you are sued as a result of something you did in your job or something you did intentionally to harm someone else. And, it will not pay for liability arising out of the use of an auto, or most motorized land vehicles including mopeds. In addition, this coverage does not cover “punitive” damages assessed by a court as punishment for your actions. Your liability insurance automatically covers you for losses arising from your ownership or non-business use of a trailer (except when it is attached to a motor vehicle), small boats of limited horsepower, golf carts on a golf course, self-propelled lawn mowers, snow blowers and garden tractors used mainly on your property, and motorized wheelchairs. Note that liability coverage for all-terrain vehicles, snowmobiles, similar vehicles and personal watercraft must be purchased separately. Your insurer will defend you against any suit for compensation related to your insurance coverage, even if the suit is groundless, false or fraudulent. Also, you may not be legally responsible for accidentally injuring someone or damaging someone else’s property, but you may feel morally obligated to pay for damages. That’s where “voluntary payment for damage to property” and “voluntary medical payments” can be useful.
Additional Living Expenses
If it is necessary for you to move into a motel or apartment temporarily because of damage caused by a peril covered by your policy, your insurance company will pay reasonable and necessary additional living expenses. It is important to note that your insurance company will not pay for all the living expenses that incur. It will only pay those additional expenses above and beyond the normal and customary expenses.
The homeowner’s policy can also provide coverage for the following assets: Other Structures on Your Property: In this section of your homeowners policy, your insurance company promises to pay if a garage, tool shed or other building (often referred to as “out-buildings”), on your property, but not attached to your home, are damaged by a peril covered by your policy. More coverage is available for an additional premium. Trees, Shrubs, and Plants: This section of your policy provides protection against damage to greenery on your property. The coverage on trees, shrubs, and plants is provided only against certain perils. For example, damage to greenery caused by windstorm or ice is not usually covered even if you buy an “all risks” policy. Debris Removal: This section of your policy pays to remove debris of covered property if the damage that caused the debris is covered by your policy. For example, in the case of your home burning down, you will be covered for debris removal. This coverage is included in the limit on your policy. Home-based business coverage: Provides special coverage for your home-based business, including off-premises equipment and liability protection. As an add-on to your home coverage, you can save money over stand-alone business insurance options.
Types of Homeowners Policies
The “standard” policy is rarely sold and is not even offered by some insurance companies. The majority of homeowners (90%) buy the “comprehensive” policy because it represents the best coverage and greatest value. Only 10% of homeowners buy the “broad” coverage policy.
The “broad” policy provides “named perils” coverage for contents or personal belongings. Again, a “named perils” homeowners’ policy covers losses to your home or its contents that are caused by the perils actually named in the policy. If your property is damaged due to a peril not listed in the policy, your insurance company will not pay for the damage. The “named perils” policy covers only limited causes of damage to a person’s home or belongings. Therefore, the “broad” policy usually covers damages or loss caused by the following (this list is not exhaustive):
- Fire and lightning
- Removal of property endangered by any insured peril
- Riot and civil commotion
- Vehicle or aircraft damage to your property
- Vandalism and malicious mischief
- Breakage of glass
- Falling objects
- Weight of ice, snow or sleet damage
- Collapse of building and any part thereof
- Sudden and accidental damage, cracking, burning or bulging from steam or hot water heating system or appliances for heating water
- Accidental discharge or overflow of water or steam from plumbing or heating systems
- Water escape from, or rupture or freezing of, a plumbing, heating, sprinkler or air-conditioning system or domestic appliance*
- Sudden and accidental injury from artificially generated electrical currents
- Limited coverage for trees, shrubs or plants
- Additional living expenses
- Personal liability insurance protection
- Medical payments coverage
* Water escape is an insured peril that is often misunderstood. Excluded are floodwaters (i.e. overflowing creek), water seepage that is repeated or continuous (from a cracked basement wall, perhaps), malfunctioning sump pumps, leaky eaves troughs and downspouts. Sewer back up is excluded unless specifically added. Your policy will not normally cover damage caused by freezing that occurs during the usual heating season, if you have been away from your premises for more than four consecutive days. However, if you had arranged for a competent person to enter your home daily to ensure that heating was being maintained, or if you had shut off the water supply and had drained all the pipes and appliances, you would still be insured. Damage from freezing outside the home is not covered.
Approximately 90% of homeowners purchase “comprehensive” insurance policies as this type of policy represents the best coverage and greatest value. A “comprehensive” policy (sometimes referred to as an “all risks” policy), provides coverage on the building, other structures and contents by promising to pay for all losses to your property except when the loss is caused by a peril that is specifically excluded by the policy. The “comprehensive” policy provides broader insurance protection and often the extra cost for better coverage is relatively small. When shopping for insurance ask for a price quotation on both the “broad” and “comprehensive” policies. Where the price differential is small, it is recommended that you buy the “all risks” policy. If you do, you will have purchased much better insurance coverage. The “comprehensive” (“all risks”) policy usually insures a building against all perils except (this list is not exhaustive):
- War and nuclear accident
- Damage resulting from freezing of an unoccupied building
- Enforcement of an ordinance
- Damage to fences, patios, swimming pools, etc., by freezing, thawing or pressure or weight of ice or water
- Interruption of power or other utility away from insured premises
- Windstorm or hail damage to overhead structures, fences, seawalls, green-houses, wharves, etc.
Buying the Correct Amount of Coverage
A common mistake when buying homeowner’s insurance is to buy too little, which usually means a big disappointment at claims time. When deciding how much insurance you need, the options are to purchase an “all risks” policy or a “named risks” policy. To get the right coverage tailored to your unique needs, while at the same time, getting the best value for your money, it is important to discuss your options with us.
Determining Your Policy Limits
The first step towards determining what policy limits you need is to determine what it would cost to replace your house. The best way to do this is to have an appraiser estimate how much it would cost to rebuild your home if it were totally destroyed and document his estimate in writing. However, appraisals are expensive, so you may want to rely on advice from your insurance broker. Most brokers have home replacement cost estimation procedures to help you determine how much insurance you need. In order to arrive at an accurate estimate of the coverage you require for your home, here are some details your broker will ask for:
- Style of home
- Age of the home
- Square footage
- Type of roof on the home & the age
- Age and type of wiring and electrical
- Age and type of plumbing
- Age and type of heating
- Special features or special materials used in your home
- Any built in features of the home
- Any home business exposures
- Any out buildings on the property
Next, take an inventory of everything you and your family owns in your home and in other buildings on your property. You should include everything except autos, animals and items that are insured under other policies. One simple way of making an inventory is with a camera or video recorder. These pictures, your insurance policy and any receipts you have supporting the value of the property insured should be stored away from home, possibly at work or in your safe deposit box. This inventory provides an estimate of the value of your belongings and it will also help you to collect if you ever have to make a claim. After that, consider:
- How much your furniture and other personal property are worth
- How much you are willing to pay out of your pocket for small losses; if you are willing to pay a higher deductible, then your policy will cost less.
Things to Consider When Choosing Your Policy Limits
You should purchase an amount of insurance on your dwelling at least equal to 100% of its replacement cost. Replacement cost is the amount of money needed to rebuild your house buying all the materials and labour at current prices. Replacement cost can be a lot different from the price you paid for your home. All companies offer a provision, however, whereby your limits will automatically increase to provide the necessary level of coverage to keep up with inflation. Contact us and we will help you determine whether you need any additional coverage.
Choosing Policy Limits for the Contents of Your Home
Adequate coverage on your personal items requires special attention. This is especially important for those items for which coverage may be limited such as watercraft, garden tractors, bicycles, computer software, jewellery, manuscripts, coin or stamp collections, securities, money and gold or silver, furs, etc. You may need to increase your policy’s limits by paying an additional premium. Contact us for details.
Most homeowner’s insurance policies have a deductible amount of $500. This means that you agree to pay $500 out of your own pocket before you are entitled to collect from your insurance company. You may purchase a homeowners policy with a larger deductible amount. For example, deductibles of $1000 or $1,500 and even higher are available. If you choose a higher deductible, your annual premium will be less. The disadvantage of a larger deductible is that you will have to pay more out of your own pocket each time a claim occurs. Contact us to find out how much your premium will be reduced by increasing the deductible.
Price and Value
Price is important, but it is only one of a number of considerations that you should review when choosing your insurance broker. In addition to coverage and price, it is important to consider the broker’s reputation for:
- Quality of Service;
- Experience and Expertise
- Claims Handling Practices
- Years of Service
Savings on your homeowners insurance can be realized if you qualify for various discounts. Each insurance company has their own specific discounts. We will shop around to get you the best coverage at the best price, which will be determined by whether you qualify for the following discounts:
- Age Discounts
- New Home Discounts
- Claims free
- Loyalty Discounts
- Mortgage free
- Monitored Alarm System Discount
Park Insurance has been serving British Columbians in every corner of the province since 1950.