Home Insurance – Optional or Mandatory?

As the name suggests, home insurance protects your home, and its contents, against various types of damage. Should your home or belongings suffer damage, your insurance policy can reimburse you up to the full cost of repairs or replacement. When purchasing a new home, you should research all available insurance options to ensure you get the best insurance for your property.

Is Coverage Mandatory?

According to Canadian law, home insurance, also called property insurance, is not mandatory for your home. But, most lending institutions will require that you purchase a minimum level of home or property insurance before approving your mortgage. This protects the bank’s investment by ensuring you can afford to repair your home in case of catastrophic damage. (The bank may recommend mortgage insurance but it would be wise to study that further before signing anything.) In addition to protecting the value of your home, the insurance required by most lenders will also protect you from liability due to accidents on your property.

Types of Coverage

There are various types of home insurance policies. At a bare minimum, your insurance company will almost certainly insist on coverage that will pay up to the value of your home. Beyond that requirement, you will have flexibility in which of the following options you choose:

• Basic – As the name suggests, a basic policy is rather limited. While it will cover the full cost of your home, it will only do so if the damage was due to one of a small list of reasons, usually defined by the insurance company.
• Comprehensive – This type of policy is the strongest and safest coverage you can get for your home and property. It protects your home and all of your belongings from nearly every type of accident or catastrophe that exists. Be sure to ask which types of major natural disasters this type of insurance would not cover.
• Broad – A broad home insurance policy is basically a compromise between a basic and comprehensive policy. It covers against every type of event that the basic policy covers and additionally allows you to add coverage for extra types of events at an increasing cost. This is useful if comprehensive is too expensive, but you have specific concerns.
• No Frills – This type of coverage is only offered for homes that are otherwise uninsurable. It won’t cover the entire cost of your home, but will provide minimal insurance in case of disaster.

No Obligation Quotes

Getting insurance for your home is simple, especially if you take an advantage of an insurance broker who will do the shopping around for you to get you the best coverage at the best rate possible. Call Mitchell & Whale Insurance Brokers at 1-800-731-2228 or email us at info@mitchellwhale.com. We’d be happy to find the right home insurance for your needs.

Want to add to this story? Let us know in comments below! Mitchell & Whale is a fast-growing insurance brokerage in Ontario, striving to make insurance _not suck_ one customer at a time. Give us a call today to discuss any of your insurance needs at 1.800.731.2228.

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