Home or Property insurance is essential for anyone who owns either a principle residence or an investment property. Property insurance protects you in cases of both financial loss and personal liability. It is imperative that you have property insurance in place on the day you take ownership of the property to ensure that your investment is protected. In fact, property insurance is often necessary to secure mortgage financing. The lender needs to feel comfortable that in the event of loss or damage to the property that they will be reimbursed for the loan. A standard home insurance policy will ensure that if something like fire or burglary occurs, then you will be properly looked after and your valuables will be replaced. It also protects your financial assets against financial loss in the event that someone is injured on your property. This liability insurance protects you not only from having to pay damages to persons injured on your property, but also the legal fees to defend yourself in court. Keep in mind that personal liability is a legal responsibility. Review this section of the policy carefully, and make sure that the coverage limit is adequate for any situation you may run into.
How Much Insurance Do I Need?
Your insurance broker will help you to determine the right amount of insurance that fits your needs. You need to consider the replacement value which is how much it would cost to rebuild your home, not the market value of the property. There may be a significant difference between what the insurance policy will pay and what it will actually cost to rebuild your home. Another important aspect of property insurance is to ensure that the policy you choose provides a standard level of coverage for the possessions inside the property. This coverage should be adequate to replace everything in your home from your furniture to your clothing. As for the special limit items such as antiques and jewellery you can purchase additional optional coverage for those items. In the event of a loss, you will be asked to supply a detailed list of your belongings and a record of their value. Photos, original sales receipts and service orders are excellent methods to prove value and ownership while speeding up the time it takes to settle your claim.
It Pays to Compare
As an investor there are many ways in which to save money and benefit from insurance policies. Did you know that you can extend the coverage from your main residence to cover up to 2 income generating properties? Think ahead. If you must provide a mortgage lender with proof of property insurance, take this opportunity to cover your valuable personal belongings as well. Some insurance companies offer discounts for customers who have multiple accounts with them or who have been long term policyholders. When looking for a property, start by checking with your lawyer about the existing home insurance on the property. Be sure to discuss all your options with your broker.
Should Renters Have Their Own Insurance?
As a tenant, a mishap can occur that can cost you money. Landlords buy insurance policies that cover their liability, their buildings and personal property. Contrary to popular belief, these policies do not cover any of the tenant’s property or liability. By reminding tenants to look into tenant insurance for their personal property, the owner is assured that the tenants will not assume that the owner’s policy provides coverage for their property or personal belongings. Many renters don’t think they need insurance but tenants’ insurance protects you in many ways. It allows the tenant to replace their property if it destroyed, stolen or damaged. It covers additional living expenses for the tenant are forced to leave the rental unit. It covers injuries that happen to other people or property while at the location and it provides coverage for your personal liability if one tenant accidentally causes damage to another unit of the rental suite. All this while reducing the risk to the landowner as well.
Home or Property insurance provides protection against your property and your personal belongings. It is recommended that you shop around and find the right policy for your particular situation. Remember to ask about discounts and other incentives from each insurer so that you can make an informed decision and get the right policy for you as a landowner and/or as a tenant.
DISCLAIMER: Please note that the Mortgage Centre does not intend to provide insurance advice. Individuals considering the purchase of an insurance product should consult with a professional advisor. We do not intend to solicit any action with respect to insurance. This article is for informational purposes only.