Buying a home is the largest purchase most of us will ever make. On top of paying for your home, there are many other costs that come with buying a home in Ontario: real estate agent and legal fees, land survey fees, land transfer taxes, home inspection fees, even HST on new homes. So, it’s not surprising that when it comes to home insurance, many homebuyers look for ways to cut costs. But do you know what home insurance really covers you for? Here are seven facts about home insurance you need to know.

1. Your insurance is based on the cost to rebuild your home.

Your insurance isn’t based on your home’s market value, tax appraisal value or on the price of your land. Instead, it’s based on the cost to rebuild your home. Your insurance company determines this amount by consulting comparable real estate listings or having an appraiser visit your home. Since your insurance is based on your rebuild cost, it’s important to advise your insurance provider whenever you make major home improvements. As for how much your deductible should be, you should try to go as high as you comfortably can, to help lower your insurance premium.

2. Home insurance covers more than just your home.

Home insurance protects your home and any other buildings on your property against damage caused by fire, smoke, water, vandalism or theft. It also protects your personal belongings, so keep an inventory of personal belongings (list valuables like jewellery or artwork if they are valued more than the basic coverage) and review/adjust the list each year. Many people don’t know that home insurance also protects you personally. If someone were to get injured on your property or if a flood in your home spread to your neighbours’ place, you are protected by the liability coverage of your home insurance policy.

3. Optional water coverage is well worth considering.

Water damage accounts for half of all home insurance claims. While burst pipes are usually covered by standard home insurance, not all water damage is. Optional Water Coverage protects against water coming from outside the home due to flooding rivers, heavy rainfall and sewer and septic system backups. Damage expenses are covered, and if you have to leave while repairs are being done to your home, living expenses will be covered too.

4. Optional service line coverage can protect your utility lines.

Did you know that as a homeowner, you’re responsible for the underground service lines that run from the street to your home? Suppose a water line froze and then burst, a sewer pipe ruptured from a tree root, or an underground power line deteriorated. These would all be your expense. With something like CAA Service Line Coverage¹ you would be covered for expenses up to $10,000 per occurrence.

5. Optional home equipment breakdown coverage can protect your electronics and appliances.

Appliances break down - usually at the worst time. With Home Equipment Breakdown Coverage¹, your air conditioning system, water heater, electronics, and major appliances, would be repaired or replaced if broken, and your living expenses will be covered if you have to move out.

6. Legal expense insurance can be very valuable. It is also included at no additional cost.

Suppose you needed advice on a contractor dispute, or a disagreement with a neighbour over a property line. CAA Home Insurance includes complimentary Legal Expense Insurance², giving you access to legal counsel and coverage for reasonable legal expenses incurred while pursing or defending an accepted claim.

7. You should review your home insurance every year, before renewing it.

An annual review will ensure your policy reflects any renovations you’ve done, any major purchases you’ve acquired, or any other adjustments you might want to make. CAA Home Insurance³ offers complimentary policy reviews - regardless of who your policy is with. If you’re a CAA Member, you can save 10%⁴ on your home insurance - even more if you bundle CAA Home and Auto Insurance³ - so it’s worth looking into. To talk to a licensed CAA Insurance Agent, call: 1-877-222-1717.

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Terms & Conditions

¹Underwritten by CAA Insurance Company, Claims administered by Mutual Boiler Re. 

²CAA Legal Coverage is underwritten by CAA Insurance Company. Claims are administered by ARAG Legal Solutions Inc. (ARAG).

³Auto and Property Insurance are underwritten by CAA Insurance Company. Certain conditions, limitations and underwriting guidelines apply.

⁴To qualify for the discount you must be a current CAA Member in good standing (CAA Membership dues paid in full by membership expiry date). Eligible CAA Members may qualify to receive a Member Loyalty Discount based on membership tenure and Roadside Assistance usage. Subject to certain conditions and approvals. Underwriting eligibility rules apply.