Even as adequate housing supply and affordability continue to remain top of mind for many Canadians, for those of our readers who are fortunate to be homeowners or are considering buying a home in the near future, the importance of getting your home insured cannot be stressed enough.
With extreme weather events, such as flooding, wildfires, hailstorms, and windstorms becoming extremely common across Canada and around the world, a homeowner’s insurance has to factor in coverage that protects homeowners against these growing impacts of climate change.
Today, we will share some key aspects that existing and prospective homebuyers should consider when insuring your home for the first time or modifying your home insurance taking into account the current reality of global climate change.
What does homeowners’ insurance cover?
- Interior Damage
- Exterior Damage
- Loss to personal effects or assets
- Any injuries caused while on or inside the property
Why is it important to get homeowners’ insurance?
As with all insurance products, homeowners’ insurance protects you against any unforeseen damage or injuries that might take place on your property. When buying a home and applying for a mortgage, a lender will usually require you to get home insurance first, which can be procured from the same lending institution or bank or another one if you get a better offer. Shop around for the best deal you can get.
The cost of getting homeowners’ insurance
Any policy you opt for will have a liability limit, usually pegged at around $100,000. Monthly payments towards the insurance policy are usually included in or clubbed with your monthly mortgage payments. Some homeowners may also choose to pay higher premiums for insuring certain portions of their home at a higher value than the rest.
Annual payments for insurance policy premiums are usually between $1,000 and $2,000 a year but can vary depending on location, coverage limits, credit scores, the insurer, local laws and regulations, etc. The type of home you live in—condominium, townhouse, semi-detached, or detached home—its age and condition are also important determinants of your final insurance coverage.
Factoring in climate emergency costs
The accelerated pace of climate change has made us all much more vulnerable to the vagaries of nature. Catastrophic weather events across Canada during the summer this year, which included flooding, wildfires, and hailstorms, have resulted in over $7 billion in insurance losses, a figure that is only expected to appreciate in the future given the current evidence-based forecasts for climate change.
Insurers across the country have seen an exponential increase in climate-related weather claims, which has also resulted in higher reinsurance premiums and driven up insurance costs for individuals and businesses alike. If you are an existing homeowner or are planning to become one in the future, it is important to make sure that the home insurance coverage you opt for protects you against any such contingencies in the future.
Next week, we will delve further into this topic, including the different types of home insurance and how to keep your insurance costs low.
Additional Resources
Home insurance - Financial Consumer Agency of Canada
Do get in touch with the RE/MAX Royal Team Sachdeva Realty for more information about any of your real estate needs.
Have a great weekend!