November is ‘Financial Literacy Month’ in Canada, a time to learn more about the finance topics that affect us every day. For homeowners (or potential homeowners), financial literacy becomes even more important, as purchasing a home is one of the biggest investments we’ll make in our lifetimes. With that in mind, we’ll be bringing you lots of information to fuel your financial literacy surrounding homeownership over the next month. First up, let’s talk about all things home insurance.
First, a very important question to answer—do you need home insurance? In short, yes!
A house is often the single largest financial investment you can make. Without insurance, your most valuable asset is vulnerable to fire, theft and other disasters. Home insurance can help you pay for big expenses you couldn’t afford after a disaster – for example, replacing your home and all your possessions after a fire. It also includes additional living expenses in the event you are temporarily unable to live in your home due to an insured loss. [Insurance Bureau of Canada]
A home insurance policy protects you against fire, theft, hail or windstorms. Policies, like homes, are not created equal, so you want to be sure to select the policy that suits your specific needs. Some important information regarding home insurance you should know:
- Home insurance covers your property, contents and personal liability of the policy holder, their partner and their children.
- Home insurance covers personal belongings like appliances, clothing, furniture, and electronics (with some restrictions). Certain things can come with restrictions on coverage, like collectibles, jewelry, computers, manuscripts, fine art, etc. Always ask your insurance provider or broker before choosing a policy what is exempt or not.
- Important to note that if you work from home, your home insurance is not your business insurance, you need a separate policy to cover those things.
When it comes time to invest in home insurance, it’s really important that you know the value of your personal possessions. You also want to know which of your possessions are the most valuable, and take an inventory of the things you own.
Here are some tips for valuing your possessions:
- Keep receipts for any possessions of worthwhile value.
- In addition to receipts, keep warranties and manuals for your more valuable possessions (these can serve as proof of ownership in the future as well).
- It’s a good idea to take photos or video evidence of your most valuable possessions.
- Keep receipts and your personal inventory in a safe place (like a safe or safety deposit box), and review the information each year. The value of most items changes over time so you’ll want to make adjustments on a yearly basis.
For more information on home insurance in Canada, check out the Insurance Bureau of Canada.
