Warmer weather is here, and the real estate market has never been hotter.
This past March, Saskatchewan saw a record-setting increase of 85% in home sales.
If you鈥檝e decided it鈥檚 time to take the plunge and purchase your first home, this is a must read for you.
What things should you consider when getting home insurance? It can be a complicated, overwhelming discussion, but it doesn鈥檛 have to be.
To help navigate the process and all your options, Westland Insurance provides the following list of subjects to consider before meeting with a broker:
1. What does a homeowner鈥檚 insurance policy generally cover?
鈥淚t breaks down your building, its contents, and liability,鈥� says Daniel Newark, an insurance advisor with Westland Insurance. 鈥淭hat last part, liability, is your legal protection in the event you are negligent, and someone is hurt on your premises.
鈥淚t covers instances such as not clearing the snow from the sidewalk outside your home where a passerby may slip and fall, injuring themselves.鈥�
Plus, many policyholders don鈥檛 know that theft from their vehicle is covered by home insurance, not automotive insurance.
2. How are policy rates determined?
A long list of factors goes into determining what your insurance premiums will be.
Insurance companies consider where you live, your past history of insurance claims, and the insurance loss history of your neighbourhood.
鈥淎ctuaries, the people who come up with the rate, research the likelihood, severity and frequency of a loss, and this becomes your premium,鈥� Newark adds.
That鈥檚 why direct comparisons to a neighbour or friend鈥檚 premium cost can often be different.
3. What are the basic levels of coverage?
Home insurance usually begins with coverage for 鈥渁ctual cash value,鈥� the market price of an item, minus its depreciation, meaning if you claim an item, you are reimbursed not for the cost of a new replacement but one reflecting its age.
Replacement cost value insurance coverage will give a policyholder the value of buying a new item that has been lost, regardless of its age.
And guaranteed replacement cost coverage gives the policyholder complete replacement of a loss, regardless of the cost.
鈥淭he only caveat to guaranteed replacement cost coverage is that a home evaluation must be completed every five years to ensure the property is insured for the proper amount,鈥� Newark says.
4. What types of things are excluded from homeowner鈥檚 insurance that new home buyers should be aware of?
Most insurance policies are wide-ranging, but they do not cover instances of intentional destruction, faulty workmanship, wear and tear, corrosion - generally anything that occurs over a period of time.
鈥淐overage generally kicks in for events that are sudden or accidental,鈥� Newark explains.
5. What are some tips for new homeowners on how to cut down on insurance premiums?
Credit consent is a new tool that allows an insurance provider to lower your premium, Newark says.
鈥淚t鈥檚 simply a way to offer clients they deem less risky a discount.鈥�
An important protection for the customer is their premium cannot be increased if it鈥檚 determined their credit rating is poor.
Monitored fire and theft alarms can also help lower your insurance costs, but the cost-benefit should be discussed with your broker before you invest in a potentially costly system that could yield relatively minor savings.
Bundling home and auto insurance with your broker can also save money. 聽Plus, be sure to shop around to ensure your current broker is offering you a competitive rate.
If you鈥檙e a first-time home buyer or if you would like more information about home insurance, visit Westland Insurance at .
