Insurance Overview

Tuesday Apr 19th, 2022


I thought I would do an overview on insurance when buying a home or refinancing your mortgage.  I, myself, was uneducated on this topic.

Address, City, Postal Code?
Closing Date?

  • What is the approximate age of the house?
  • How much did you pay for the house?
  • What is the age and type of roof?
  • What type of plumbing is in the house?
  • What type of heating and age of system?
  • What type of wiring...Amperage....Circuit breakers?
  • Is there any knob and tube wiring?
  • Have you had the house inspected?
  • Approximate square footage of the house?
  • Is there a single or double garage?
  • Is there an alarm system?
  • Approximate value of the home, if known?
  • Extras to be insured.?

Coverage to consider when purchasing your new home

1.  Mortgage Life Insurance

In the event of the death of the owner/s of a home, the balance of the mortgage will be covered by the mortgage life insurance.  Particularly for families with young children who could not afford to run the risk of losing their home if the breadwinner should unexpectedly pass away, the mortgage agent or lender will recommend you get Mortgage Life Insurance.  However, the mortgage life insurance only covers the amount of the mortgage outstanding and as the balance is paid down over time, you are paying the same premiums for lower coverage.

It is recommended that you purchase individual life insurance for several reasons. The first reason is that you can obtain life insurance to cover not only the mortgage, but also other expenses that may be required and the beneficiary is your family, not the lender. The second reason is that your premiums will be fixed for the term of your life insurance policy and you don’t have to reapply every time you change mortgage lenders or you renew your mortgage.The amount of your individual life insurance never changes, unlike mortgage insurance, where the premiums increase as you get older and it covers only the outstanding balance of the mortgage.

Purchasing individual life insurance is a smarter choice to protect your family. I work with reliable Insurance  Brokers who I am happy to recommend should you need one.

2.  Fire Insurance

No one plans on or expects a fire to happen to them.  But it is possible and fire insurance on any dwelling is an absolute necessity.
If you have a mortgage on your home the fire insurance policy you take out should be equal to the FULL REPLACEMENT VALUE of the building.  As housing costs rise so should the amount of your policy.  Also, your policy should be large enough to help you recover your investment in the building.  Policies are generally renewable each year.  If you are building or having a home built, you should also consider having insurance to cover the building period as an added security measure.

3.  Third Party Insurance

Civil liability or third party insurance is highly recommended to cover your personal liability in the event a visitor to your property sustains an injury.  It protects you in the event the visitor sues you for damages.
Package policies are available to homeowners to provide them with a full benefit package.  Fire and third party insurance can also be included in a package protecting you against theft, loss or destruction of contents as well as property damage caused by Mother Nature.

4.  Personal Property

Coverage for your household contents and personal belongings is usually expressed in your policy as a percentage of the insured value of the dwelling.  Insurance for these items is now offered by most companies on a full replacement cost basis.  Therefore, care should be taken to ensure there is sufficient insurance to cover the cost of replacing these items with new ones.

5.  Additional Considerations

Most policies contain limits of coverage for certain categories of property such as jewelry, furs, silverware, etc.  These limits can usually be increased by separate riders to your policy and should be discussed with your agent.  In addition, cabins, boats and rental property are all examples of items which can be insured through your homeowner's policy.

Each individual's insurance needs are unique.  A professional can explain your policy to you.  Significant discounts are extended to homeowners who use alarm systems which detect intrusion.

6. Title Insurance Saves You Money and Hassle

What can go wrong with the title to your dream home?  Unthinkable things that even the most careful lawyer can't be held accountable for.  Fraud, forgery, survey errors, registry office errors and omissions, zoning by-law infractions and other title defects can delay your closing, stop the deal or even worse, surface years later.

Title insurance protects your investment and saves money too.  It streamlines the search process helping reduce lawyer fees, is accepted by most lenders in place of a costly up-to-date survey and can eliminate delays that threaten closing day.  A very affordable, one-time premium protects you and your heirs against loss, damages and legal costs.

If you have any questions after reading this article, please feel free to email or call me.


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