Understanding the Awesome Benefits of Home Insurance (That'll Convince You to Get It ASAP)

Updated on June 10, 2019

Canadians receive over 56% of every dollar back that they pay to insurance companies each year.

How? They’re claiming items and events by taking advantage of their insurance premiums.

This means that if you have insurance on your car, home, or even life, you’re going to receive benefits for what you’re paying for.

The same study shows that, while home insurance isn’t required by law in Canada if you own your home, many people opt to purchase it because they feel it pays off.

Ready to explore the benefits of home insurance? Let’s go.

Why Do You Need Homeowner’s Insurance?

To put it simply: home insurance protects your home and all of your belongings inside of it.

Depending on the insurance premium, it will cover various different situations and events.

This means that if there is any sort of damage, theft, or natural disaster, you will be able to receive money to replace your personal belongings.

Protection from Natural Disasters

This is one event that you really can’t control. Due to the fact that many homes in Canada are in high-risk flood areas, this is one of the biggest benefits of home insurance for Canadians.

With insurance, you can protect your home from common natural disasters. This could include floods, fires, tornadoes, and more.

Your home insurance policy will pay for any damage and repairs, which can save you thousands of dollars and hassle.

Depending on where you live, your policy might naturally include certain natural disasters and not others. It’s best to check with your insurance agent to confirm what’s in your coverage.

Protection from Theft

While we’re hopeful that you won’t ever have to use this, home insurance also protects you from any type of theft that occurs on your property.

Not only will your insurance cover the cost of any items you lost, but it will also cover the cost of any damages to your home that occurred during the break-in.

In this case, you can get additional coverage by requesting riders. These will increase the amount of coverage you have and cover higher-value items such as expensive jewelry.

Protection from Damage to Other Properties

Let’s say you accidentally start a fire in your kitchen. If the fire spreads from your home and damages your neighbor’s home, your insurance policy will cover the damages.

Because the fire wasn’t technically an unexpected event and you started it (even by accident), your policy might not cover damages to your own home.

It will, however, cover all of the damages and repairs to your neighbor’s home. That will save you hundreds of thousands in lawsuits and repair bills.

Protection from Damage to Other Structures

If you have built a large garage, shed, or separate-standing apartment on your property, your homeowner’s insurance will usually cover this as well.

This is important to look into. It could mean that you might receive payment for any damage to expensive, classic cars that you store in a freestanding shed next to your home.

Speak with your insurance agent about this and any other important questions you might have. Everybody owns different items that are important to them and will require different coverage.

Is Home Insurance a Mortgage Requirement?

We get this question a lot. “Do I need homeowner’s insurance if I own my home?”

In Canada, if you own your home and it’s fully paid, it’s not a requirement to have home insurance.

However, if you are looking to take out a mortgage to pay for a home, then you will have to obtain minimum homeowner’s insurance before the closing date.

Lenders in Canada will require this regardless of the amount you’re trying to borrow to pay for your home. This is because they technically have a stake in your property and want to make sure they’re protecting their investment.

It makes sense. It’s the same reason why it’s a good idea to insurance even if you do own your home. It’s a smart way to protect your investment!

Buying a home is one of the biggest financial investments you’re likely to ever make. Protecting it against accidental damage or even natural disasters is a smart idea.

You would do the same for any other type of financial investment you make, why not protect your home the same way whether it’s a requirement or not?

Hidden Benefits of Home Insurance

While you might think that the benefits of home insurance in Canada extend only to the physical home and any physical items inside of it, there are actually other hidden benefits.

Liability insurance is one of them.

Standard home insurance usually includes liability coverage. This type of insurance covers you in case someone has an accident or injury on your property.

Imagine, for example, that you have hired contractors to renovate your dining room.

If one of them falls, injures themselves, and tries to take legal action, your homeowner’s insurance will cover you and all of the fees included in the legal proceedings.

This type of insurance is great for other situations, which can include:

Damage to a neighbor’s roof if a tree falls on their property
Injury if someone slips on your driveway when it’s icy outside
Dog bit protection if you have pets and they hurt someone
Refrigerator re-stocking fees if the electricity goes out

Because there are so many different types of benefits, it’s best to read through your policy to find out how you can take advantage of them.

And, the best part? This coverage usually extends to anywhere you go.

If someone tries to claim that you’re responsible for their injuries, your homeowner’s insurance policy might cover it. Yes, even the accident didn’t occur on your property.

Coverage Extended to Your Family

As mentioned, if you have minimum homeowner’s insurance coverage, the policy and the benefits can extend beyond the limits of your home.

This means that if your child is a full-time student, they will receive coverage under your insurance policy wherever they go.

As long as your child lived in the house that has insurance before they moved away to go to school, they can receive all of the benefits of the premium until they turn 26.

Sometimes there are limits on this type of coverage. These limits usually depend on the amount of coverage you have taken out.

If you’re paying for $1 million worth of personal property coverage, for example, your insurance policy might cover 10% of that for those who are living away from home.

This means that if your child needs to make a claim while away at college, they could potentially receive $100,000 in damages paid to them if they lose their property or if it’s damaged.

This is extremely beneficial if your child is studying abroad or living in a high-risk area where they’re more likely to lose their things or have them stolen.

The Ability to Personalize Premiums

Perhaps one of the nicest things about modern-day home insurance is the ability to personalize your premiums.

Maybe you don’t live in an area where flooding is a threat. Maybe you have particularly precious items you’d like to protect.

You can add all of this to your home insurance policy as you wish. There is no one-size-fits-all insurance policy.

You can change certain aspects, such as:

Increase or decrease your deductible
Increase coverage limits to cover luxury items
Opt out of certain coverage that you don’t need

The best way to find the perfect policy for you is to browse around. Compare different policies against each other and speak with a qualified professional about your household’s specific needs.

Chances are that, if you’re open about your needs, they’ll be able to develop a policy that fits you and falls within your budget.

In general, however, it’s suggested that you choose your coverage limits and deductibles wisely.

Experts suggest paying for a coverage limit that would cover the cost of the repair of your home. This isn’t the market value or even the purchase cost.

To figure out the cost to repair your house, multiply the square footage of your home by the cost that construction companies charge per square foot.

This is the amount you’ll want to insure your home for just in case it’s completely damaged or totaled.