What does home insurance cover?
Types of home insurance available in Canada  There are three types of home insurance policies: basic, broad and comprehensive. You can think of them in tiers. Basic home insurance is the standard type of insurance available in Canada, covering your home against specific events that may cause damage. Its also called perils insurance. Broad home insurance is the next level of home insurance, which gives more coverage. But its not full coverage and your home is covered only for specific situations. Comprehensive home insurance is the most extensive type of insurance, as it covers both your home and your belongings. The coverage provided by basic and broad policies can come up short of insuring your needs because they only cover a list of named perils. (A peril is an event/risk that causes damage to a property.) Both policies have a capped list for what is insured and a basic policys list of named perils is shorter than that in a broad policy. For example, if you have a backyard chicken coop that a visiting coyote destroys and the loss is not clearly described as a peril in your policythink damage caused by coyotethen that financial loss will not be covered. Comprehensive insurance, on the other hand, offers the most coverage. Instead of naming perils, it lists all the instances in which you are not covered or your uninsured perils. In other words, the damage a hungry coyote causes doesnt have to be spelled out clearly in the policy and youll have peace of mind knowing that more possibilities are insured. The home insurance coverage you receive depends on the type of policy you choose:  Basic Broad Comprehensive A pre-set list of events that may damage the home, which may or may not include fire, lightning, smoke, theft, falling objects, etc. This is the same as basic but with extra coverage for bigger-ticket items, like the structure of the home and belongings. This policy covers both the building and contents (some exclusions) for many risks. Optional add-on coverage can include earthquake and sewer backup, as well as other perils.  Heres a quick checklist to help you determine the best coverage for you:  Property damage and loss, including attached structures (such as the garage or deck), permanent additions (like your saltwater pool or your kids custom backyard climbing wall) and detached structures (such as a separate in-law suite or detached garage). Damages and loss of personal belongings on your property. Unintentional damage to someone elses property caused by yourself, your partner or your child. Any unintentional injuries on your property. For example, if someone slips and falls into your pool, you have a financial cushion if they decide to sue you and to pay for their medical bills. Everything covered in your home insurance will be listed from the get-go in your policy. As for whats not covered, know that there are some risks that can be protected with additional coverage. And there are some that wont be covered at all. Heres a list:  Earthquake, landslide and avalanche insurance isnt standard issue in Canada. Youll have to top up your policy for extra coverage if your postal code is at risk of this kind of damage. Heres how it works. Damage from rodents, insects or termites (yet another reason why they deserve to be called pests). Pricey artwork, jewellery or possessions. While the contents of your home are insured, there are dollar-amount limits. If you have these items, ask about topping up your coverage to insure the complete value of your valuables. Sewer backup or overland water sometimes catch people by surprise, says Natasha Noordin, director of PC Insurance. Theyre typically not automatic coverages included on a homeowners policy, and if they are included there are likely sublimits applied. Sublimits are caps for the coverage. If in doubt about how much coverage you may require, ask your broker or agent about adding onto your policy. They can help you to weigh the risk, price and the cost to replace or fix.