What Can You Do To Make Certain You Have Enough Insurance
It is my experience that most clients find insurance confusing. Coupled with the bill for a policy you hope to never use they find the process of understanding their coverage boring. But if you are the statistic that suffers a serious loss and your home is not properly insured…it becomes exciting really fast!
All insurance is done in the utmost of good faith, so it is critical that you are familiar with your property. Your broker may not by privy to the specs of your home therefore you are responsible for relaying the necessary information to calculate the proper amount of insurance. This is referred to as the rebuild value.
After a serious loss, what is it going to cost to haul away the debris, prep the site for rebuild and reconstruct the same home in 2020? This includes, but is not limited to:
• The year built
• The total above ground square footage
• The use (single detached vs. multi-family semi-detached)
• The style (bungalow, bi-level, two story, etc.)
• The foundation (slab, crawlspace, un/finished basement)
• The primary exterior finishes (stucco, siding, brick, etc.)
• The number of bathrooms
• The materials used (finish quality can greatly skew the rebuild value. i.e. the interior wall height/covering, flooring, fixture and countertop selections)
• The garage (attached/detached and how many cars)
• The access (it stands to reason that the cost to rebuild can increase if the property is located on an island or in a remote location. Be sure to mention any exceptional location considerations!)
Although I recommend reviewing your insurance policy on an annual basis it is most common when purchasing a new home. All too often I inherit clients that can tell me the colour of the living room feature wall but didn’t think to inspect the mechanical components:
• The roof material and when it was last updated (shingles, metal, etc.)
• The electrical service (60, 100, 200 amps)
• The type of electrical and when it was last updated (knob and tube, fuses, breakers)
• The type of plumbing and when it was last updated (cast, copper, PVC)
• The type of heat and when it was last updated (electric baseboard, woodstove, gas forced air furnace)
New rating systems are rewarding insureds that update these aspects of their home. For example, if you maintain your home and proactively install new shingles before the end of their life expectancy, they will better withstand the weather perils of wind and hail and make you less of a risk!
Further, whenever you increase the value of your home through renovation, you are responsible to notify your insurance professional. By reporting features such as finished basements, saunas, wine cellars, sunrooms, decks, theatres with extensive audio-visual equipment and swimming pools, you will speed up the claim settlement and confirm you have enough insurance in the event of a loss.