Home Insurance FAQ

Starting with the basic notion that all homeowners should insure their houses according to the amount of rebuilding the house in the event it was destroyed, there are three ways of determining adequate insurance.

First, know your dwelling… including the year it was built and how it is built. Helpful home assessment checklists can be found online. Second, use an insurer to help calculate the proper rebuilding value based on your dwelling details. And third, take stock of what you own and create a complete room-by-room inventory of your belongings. It'll help you get the right protection and make it easier filing a claim.

Replacement cost is the total amount your insurer will pay to fully rebuild your dwelling if it is destroyed.

This can include things not included in the resale value, such as the fess for skilled labour, debris removal, extra expenses from stricter building codes, and so on. Recent upgrades and renovations can make rebuilding your dwelling more expensive than originally estimated.

There are a number of reasons why the estimated replacement cost could exceed what you paid for your house. Here are six :

• Upgrades, renovations and other improvements made to your space can make rebuilding it more expensive than the original amount.
• Construction may need to meet newer, stricter building codes.
• Demolition and preparation fees need to be included.
• Building materials used may have gone up in price or may no longer be available.
• A contractor rebuilding only one location won't benefit from the same efficiencies as a builder constructing many within a development.
• Following some catastrophic events (such as a wildfire), labour and building materials may be scarce, resulting in inflated construction fees.

If your insurer doesn't know about your renovations, you may not have enough protection. Have the improvements you've made affected the replacement cost?

For example, by expanding your kitchen and adding new appliances and granite countertops, you have added value. Your insurance should reflect those changes to ensure you have an adequate plan. While some policies cover minor remodeling work, always check with your insurer to be sure, even if you think the changes are small.

Your policy is issued with the expectation that you will reside in the dwelling. Some policies do not permit you to rent your place out, even for a brief period. Always check with your insurer before considering any kind of rental.

Just as the owner of a house needs insurance, you also need condo insurance to cover your unit and personal belongings and to provide personal liability protection.

While every condo association will have specific details in its master insurance policy, as an owner you're typically responsible for everything inside your unit's walls. For example, the corporation's master policy would usually cover the drywall and primer, but yours covers the paint you put on the walls.