Home insurance is a type of insurance that covers the risks of damage or loss to your home and its contents. It also covers other structures on the property like garages and pools. Although having home insurance is not required by law like car insurance is, many first-time homeowners might benefit from obtaining one.
They may need it when they buy their first home as it will give them peace of mind by protecting the items they have invested in. However, it is expected that home insurance policyholders will experience an average 5% rate increase in 2022 due to climate change, renovations, and rebuilds.
Read on to learn why first-time homeowners need to invest in home insurance when they purchase a home.
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Since this is your first home, you probably don’t have much experience with home insurance. Keep in mind that there are different policies and their price depends on several factors. Make sure you look for a reputable company such as aha Insurance, to provide you with all the necessary information about your first home insurance. In addition, make sure they’re fast, easy, and affordable.
Before you get your insurance policy, consider the following factors:
Location. If you’re located near a hospital or a fire department, you’ll probably be able to get a discount, but if you’re located in high-risk areas, you might need to pay extra.
The size of your home. This plays a major role in the final cost of home insurance.
Having a smart home. Smart homes are generally safer and they’ll save you money on insurance. Read more about how the future of home security can benefit you in many ways
Pets. Depending on the type of pet you own, some insurance providers have different requirements and limitations, so make sure you inform yourself before purchasing a policy. Having a separate pet insurance policy is also a wise idea for additional protection for your furry friend.
Working from home. If you’re working from home, you might want to get additional insurance depending on your job type.
How Can Homeowners Insurance Protect You?
Your most valuable investment needs the right kind of protection. But what exactly is covered with home insurance?
Liability Claims
The last thing anyone wants is to be having a gathering, or hosting a playdate for the kids and a guest becomes injured. Your property can unfortunately cause bodily harm, even if it’s just a slip and fall. For this reason, your legal expenses and compensation payouts would be covered - if it ever came to that.
Living Expenses
In the event you have to leave your home due to damages or undergoing repair, your homeowners insurance will cover the cost of hotel rooms, storage, food and more.
Your Belongings
Should you require to replace your belongings such as clothing, furniture, jewelry which have been lost or damaged, your homeowners insurance has you covered.
Your Home
Homeowners insurance not only protects the physical structure of your home, but also any other dwellings you have on your property such as sheds, saunas and external garages.
How to Choose the Right Home Insurance?
It can be difficult to purchase home insurance but it doesn't have to be complicated if you take a proactive approach. Depending on the age of your home, its value, and the number of people living there, you will need to determine the level of insurance you need. Beyond the initial insurance coverage cost, there are other factors you should consider, such as coverage limits, endorsement options, and provider type.
There are three main insurance categories, and insurance policies cover all three of them to a different degree. If you want to make the most of your money, go over different offers with your agent. For instance, dwelling coverage covers the building and its contents against damage caused by fire, theft, and natural disasters.
Personal property coverage protects the insured from the financial impact of loss or damage to their personal possessions. Liability insurance, on the other hand, protects you from medical payments and lawsuits.
Extra Insurance Precautions
Additional insurance may increase the final price, but in different scenarios, it can be worth it. Depending on your state, province and location, some insurance endorsements are required by law:
Hurricane Insurance
Hurricanes are one of the most devastating natural disasters, causing a lot of damage and sometimes taking lives. If you live in an area that is prone to hurricanes, it is important that you obtain hurricane and natural disasters insurance.
Water Backup Insurance
This is a type of flood insurance that covers damages caused by water. It protects against damage to your home or business from any source of water, such as sewer, rainwater, flooding, or overflow. Keep in mind, having a working backwater valve will help to prevent flooding in more minor cases of flooding, which is something that insurance companies will look for when assessing the damage done by water.
Jewelry Insurance
Jewelry insurance can be broken down into two categories: coverage for theft and coverage for loss. Theft coverage will reimburse you for the cost of your jewelry if it is stolen, whereas loss coverage will reimburse you if your jewelry gets lost or damaged.
Fire Insurance
This is a type of property insurance that covers the loss of your home, other structures on your property, and any other personal possessions in the event of a fire.
How Much Does Home Insurance Cost?
The cost of home insurance can vary depending on the several factors mentioned above, but it also depends on the insurance company you choose. Make sure your company is willing to come up with an offer that’ll suit your needs. Note that the average cost of home insurance in Canada is around $960 per year, but it can vary significantly from one province to another.
Home Insurance Cost By Province
The chart below displays the price differentials across provincial borders:
Province
Average Monthly Cost
Average Yearly Cost
Alberta
$83
$1000
British Columbia
$77
$924
Manitoba
$86
$1032
New Brunswick
$65
$781
Newfoundland and Labrador
$65
$780
Nova Scotia
$65
$780
Ontario
$104
$1250
PEI
$65
$781
Quebec
$82
$984
Saskatchewan
$92
$1100
Bottom Line
Even though having home insurance is not a requirement for buying your first home, it’s definitely something you need to think about. Your home will be protected in different scenarios, giving you peace of mind. You’ll be covered for things like floods, tornadoes, roofs collapsing, and many more.
Peace of mind comes in many forms and homeowners insurance is just one of them. What other steps have you taken to protect your family from the financial loss of an unexpected event? Here at Insurdinary, insurance is our specialty. Whether it’s life insurance, health and dental insurance, travel or disability insurance, we have you covered. Visit our page for more details on insuring yourself, or your assets. Prefer to speak to an agent? We can do that too. Our experienced agents are happy to assist you. 1-877-574-7475. We look forward to working with you.
