How to Keep Your Home Insurance Current on Vacation

Rear view of woman in a hotel room pulling the curtains to see the view. There is a small suitcase and large suitcase in the foreground.

Taking a vacation is always exciting. Whether you’re headed out for an adventure, a family visit, or a trip somewhere warm, you’re going to be away from home for a while. Did you know that it’s part of your agreement with your insurer to have someone check in on your home? Insurance companies generally require a check-in every 48 to 72 hours if you’re away. If this isn’t done, you as the homeowner are at risk of a void insurance policy and potentially catastrophic repair costs. We’ll break down how to keep your home insurance current while

Why is my home insurance at risk of being voided?

Home insurance is meant to offer coverage in the event of something catastrophic and sudden. That’s why it doesn’t cover regular home maintenance. When we purchase an insurance policy, we are inherently making an agreement with our insurance company. Part of this is ensuring our home is not left vacant for too long. Why? Vacancy means damage goes unnoticed for longer and it can also attract vandals, thieves, and other nefarious characters.

Generally, insurers will require someone to check on your home at least once every 48 to 72 hours. You may also be required to turn off and drain the water if you are going away for an extended period over winter (and do not have someone living at your home full-time). The exact requirements vary by the home insurance policy.

How can I prepare my house before my vacation?

While it is important to remember that every insurance policy is different, the majority of companies will call for similar requirements. Even if you are away for a small vacation, you are responsible for guaranteeing that your property will be looked over from time to time. Consider organizing a plan for a trusted family member or friend to come into your house every day while you are away to make sure that your house is in good shape. They should ensure:

  • Your heat is working.
  • There are no taps running.
  • There is no water in the basement or main floor (especially if it has rained).
  • Windows and doors are securely closed and locked.
  • Mail is picked up.
  • There is no damage to the exterior of your home from a storm or wind, such as loose roofing or fallen branches.

Concerned about pipes bursting? You could shut off your water supply and drain your pipes prior to your departure. Even though it might seem trivial, your insurance company wants to guarantee that it isn’t covering a house that is at higher risk than originally agreed upon.

The older your home is, the more beneficial it is to give your house a good once-over before you go. This is especially true if you’re leaving for the winter or any longer trips. Check your roof, your appliances, and so on to ensure they’re in good working order. Make sure your house’s doors are all locked when you leave, including pet doors and garage doors. This guide offers more thorough steps for preparing your home inside and out for your vacation.

Why do I need a house-sitter? 

There is a section in most home insurance policies that restrict how much an insurer is obligated to pay out if damages are incurred while a house is left vacant and unsupervised. It only takes an instant for a situation to arise, no matter how short of a time you are away for. Additionally, damages can be mitigated if they are stopped early enough – such as if a tap started to leak – but with no one to regularly monitor the state of your home these issues can grow out of control and cause some serious problems.

It’s not uncommon for costly repairs to arise due to negligence over a long period. But as long as you are up to date on the upkeep of your home and can demonstrate this to your insurer, your coverage should remain secure.

If you aren’t certain as to what your responsibilities are, consider reading over your home insurance policy. Alternatively, you could always ask your insurance broker to clarify for you. By doing this, you can formulate an appropriate plan for this sort of situation.

5 Common Home Insurance Claims in Alberta

White room interior decor with burning hand-made candle and bouquet of fresh roses on table, luxury home decorations in daylight closeup.

There are plenty of reasons why a home insurance claim can happen including an accident, bad weather, poor maintenance, or a criminal act. In any case, the best way to lessen your chance of having to make a claim is to be aware of the risks and take the necessary precautions to protect your home. Here are 5 common causes of home insurance claims in Alberta:

  1. Fires started by fire.
  2. Hail damage.
  3. Burst pipes.
  4. Theft.
  5. Barbeque fires.

Below, we’ll discuss these in a little more detail. Plus, we have a few ways you can prevent these common claims.

1. A fire started by candles.

You might not think much of your little decorative candle, but in reality, they can pose a massive hazard to your home. It can be easy to forget to extinguish a candle before leaving a room or going to sleep. Candles are easy to knock over – by pets, by kids, and even by you. If one is left lit and unsupervised, you might be surprised at the damages that can result. To avoid this sort of threat, be sure to avoid lighting candles in your bedroom or near curtains. Always extinguish a candle before going to sleep or leaving the room it is in. Finally, if a candle is becoming shorter than two or three inches, dispose of it and replace it. You should also ensure that the candle is held in a proper receptacle.

2. Hail damage.

Hail storms tend to be a common occurrence in Alberta. We even have “hail alley,” which stretches from High River north to Edmonton. It’s no surprise hail damage is one of the most common causes of home insurance claims in Alberta. Summer storms cause more costly losses in this province than in any other in Canada. Damage resulting from hail affects roofs, siding, and windows. It can also damage outdoor furniture and structures like decks and sheds.

You can help prevent or mitigate hail damage to your roof by installing protective roofing. Exterior materials such as brick and stucco also bear the brunt of hail far better than normal siding. Shuttered windows can also help protect your home if you deal with hail and wind regularly.

3. Burst Pipes

A burst pipe is often caused by the pipe freezing. This is generally caused by extremely low temperatures and weather fluctuations. A burst pipe is a very common cause of home insurance claims in Alberta and it’s one of the largest causes of water damage, as well. A burst pipe can damage your belongings, floor, drywall, and even your wall studs. It can also occur on an upper floor, leading to more damage as water travels downwards.

To prevent burst pipes, ensure your pipes are well insulated. You can wrap them in special tape. You can also install insulation to your attic and any other area where your pipes are left more exposed. Keeping your home’s thermostat at 12C or warmer will also help. You can also drip taps to help keep water moving. This will discharge pressure and prevent them from erupting. Keep your garage and outside doors closed shut.

4. Theft

There is an increasing number of home insurance claims thanks to theft and burglary. Deterrents are effective – theives often go for the easiest targets. Make sure your windows are closed and your doors locked (including the garage). Fences, lighting, cameras, and signs all act as deterrents. Alarm systems are also a good idea, as long as they’re turned on. You can get discounts from many home insurance providers for having security on your home. Talk to your broker for more info.

5. Barbecue Fires

Grease and fat, both highly flammable, can build up at the bottom of a grill and spark a flame. If this should happen and spread to other regions of your property, you could be faced with significant damage. There are ways to prevent this, however. Make sure your grill is well maintained and cleaned every use. This helps prevent the buildup of any flammable material. It’s also a good idea to keep a fire extinguisher or baking soda near the barbeque so you can stop a fire before it gets out of hand.

While these are only preventative measures or means to mitigate damage to your home, not everything can be anticipated. Accidents happen. That’s why home insurance is key. Your broker can provide more information on how you can protect your home and your loved ones from these common causes of home insurance claims in Alberta.

Do I need business insurance if I work from home?

Professionally dressed business woman working from home.

Working from home can be fantastic – no commute, more flexibility, and working in your pyjamas, what else could you want? But with this freedom comes some additional risks, which is why working from home affects your home insurance. For example, you may be bringing home papers, materials and equipment from work or you may be inviting clients over to your home office. Any work-related property damage or liability claims won’t be covered by your home insurance unless they’re notified and you have the proper coverage. You may need business insurance if you work from home or run a business from your home – talk to your broker to determine if this is the case for you.

Why would your home insurance not cover you if you work from home? It’s pretty simple:

  • Businesses have greater liability risks.
  • Home insurance only covers damage to others as a result of your personal – not professional – actions.
  • Additional property would need to be protected.
  • You didn’t notify your insurance company.

 

What are my insurance options if I work from home?

First, you should check with your employer to see what insurance coverage they offer for employees working from home. This coverage may not cover everything, but it gives you a good idea of where to start when it comes to protecting yourself.

Second, you should talk to your broker and current home insurance company. Some insurers offer a home-based business add-on which will cover work-related property and provide the liability insurance you need. However, it may not be available from all insurers or your type of business may not qualify. If that’s the case, you may need to purchase separate business insurance if you work from home. Your broker will be able to help you find the coverage you need and take care of the research and price shopping.

Do I really need business insurance if I work from home?

Not necessarily. It will depend on your business and your home insurance provider. You may need to switch providers to get the proper coverage or purchase separate business insurance.

If you decide to depend on only your home insurance, you could be paying out of pocket if your business property is damaged (or causes damage) or if you’re sued by a client visiting your home. If you store inventory or use a work computer and it’s damaged or stolen, you could be on the hook for replacing it. If a customer trips walking up to your home, they could sue you – and you’d be responsible for all of the legal expenses. Finally, if you fail to inform your insurer, they can deny coverage or void your insurance. This is especially true if you lie on a new home insurance application.

Furthermore, your home insurance won’t provide any coverage for:

  • Professional Liability (if someone blames you for financial loss because of your professional service or advice and sues you)
  • Product Liability (if a product you sell injures someone or damages their property)
  • Business Interruption (if you’re forced to close your business temporarily due to a mandatory evacuation or covered loss)
  • Cyber Liability (if your company is the victim of a cyber-attack or data breach)
  • Equipment Breakdown (covers repairs or replacement of essential equipment)
  • …and many more protection options available, depending on your business.

Whether or not you opt for business insurance if you work from home is up to you, however, you should inform your home insurance provider and talk to your insurance broker.

 

8 Factors Affecting Alberta Home Insurance Rates

Exterior picture of a eco-friendly, minimalist vacation home. The siding is a combination of wood and concrete with a black slate roof and deck cover. There is a patio table set and a gently sloping lawn with trees in the background.

There’s nothing like your home. It’s where you spend a lot of your time. It’s an investment. It’s your place of refuge. In Alberta, your home also shelters us from the outside elements: wind, rain, cold, snow, and everything else our tumultuous weather has to offer. Our homes are also one of our most valuable assets – they can be expensive to repair or replace. It makes sense to protect our homes with insurance.

Alberta home insurance provides financial help in the event of a catastrophe or an unexpected event. Unfortunately, many people don’t understand how this type of insurance works and opt for the cheapest Alberta home insurance rates they can find. This can leave them frustrated when disaster strikes and they may not have the best coverage. Here’s what impacts Alberta home insurance rates and why they fluctuate:

  1. Your insurance and claims history.
  2. Your credit rating.
  3. Your address.
  4. Your home’s age, type of build, and building material.
  5. Your roof’s age and material.
  6. Your home systems’ (plumbing, heating, electricity) age and type.
  7. The replacement cost of your home and belongings.
  8. Your insurance options.

 

1. Your Insurance and Claims History

Alberta home insurance rates are heavily influenced by your insurance and claims history. First of all, how long have you been consistently insured? The longer you have insurance, the better you look to insurance companies. Second, have you always paid your insurance on time or had any issues with insurers? They’ll know if you’ve missed payments or switched around mid-term. This makes you look like a less desirable client and can increase your rates. Third, the number of claims you’ve made has a significant impact on your home insurance premiums. The fewer claims you’ve had, the cheaper your rates. Some insurance companies even offer discounts for remaining claims-free for a certain number of years.

 

2. Your Credit Rating

You can give insurance companies permission to check your credit rating for a discount. This provides proof that you pay your bills on time and will likely pay your insurance. Not all insurance companies offer this perk, but you can ask your broker if this is available to you.

3. Your Address

Your address determines your location, which impacts a number of factors in your Alberta home insurance premiums:

  • The proximity to a fire hydrant and fire station.
  • The frequency and severity of natural disasters such as floods, tornados, wildfires, and hail storms.
  • The crime rate of your neighbourhood.
  • The claim rate of your neighbourhood.
  • The proximity to hazards such as rivers.

The farther you are from fire services, the more likely your home is to be severely damaged by fire. The frequency and severity of natural disasters also impacts your rates as it means you’re more likely to make a claim. Alberta holds several of the most expensive events in history due to flooding, wildfire, and hailstorms. This makes it more expensive to insure a home in Alberta, especially if you live in an area with a high flood, wildfire, or hail risk.

The crime and claim rate of your neighbourhood also impact your home insurance rates in Alberta, as it helps determine how likely you are to make a claim or be a victim of theft. Higher crime areas tend to be more expensive to insure. Your neighbourhood claim rates will depend on a number of factors from income to the age and building types of homes in your area to how often you experience severe weather.

Obviously, if you live near a river, you are more at risk for events like flooding. Some insurance companies may increase your rates or simply not offer certain types of coverage.

4. Your Home’s Age, Type and Building Material

The older your home, the more likely it may have problems due to wear and tear over time. The type of building and what it’s made of can also impact your home insurance rates in Alberta. For example, a wood-build with regular siding will likely be more expensive to insure than its neighbour that’s concrete or stucco since the wood-build is more likely to be severely damaged by fire or hail.

5. The Age and Type of Roof

Your roof is critical to protecting your home from an element. The older it is, the more likely it will fail or be damaged. Generally, it’s recommended to replace your roof every 15 to 30 years, although it depends on the roofing materials you’ve chosen. Repairs may also be required.

Some insurers will raise your premiums or reduce coverage if your roof is over a certain age.

6. Your Home Systems

Your home’s plumbing, electrical, heating and other systems all impact your home insurance rates. Certain types of systems are more likely to cause damage. For example, knob and tube wiring (generally used before the 1940s) has a higher fire risk. Wood-burning stoves also have a higher fire risk and will make your home more expensive to insure.

7. Replacement Cost of Your Home

How much would it cost to rebuild your home? How much would it cost to replace all of your belongings? These costs factor into your home insurance prices in Alberta. This includes the labour and material costs, as well as replacing appliances, furniture, and your other personal belongings. It can also include debris removal and, if you have the coverage, upgrading your home to current bylaws.

Keep in mind that the purchase price and market value are not the same as the replacement cost. Your home’s purchase price could be far lower or higher than the expense to rebuild it.

 

 

 

8. Your Insurance Options

Of course, your Alberta home insurance rates are also influenced by what you choose in regards to protecting your home. This includes your deductible, policy limits, and coverage options.

Your deductible is the amount you’ll pay if you have a covered claim. The lower this amount, the higher your home insurance premiums. For example, if you have a deductible of $500, you’d pay higher home insurance rates than if you choose a deductible of $1500.

Policy limits are the maximum amount that will be paid out in the event of a claim. There are usually multiple policy limits for different aspects of your home insurance and some insurers have an overall limit as well. For example, you could have a $50,000 contents limit to protect your personal belongings, a $400,000 structural limit to rebuild your home, and $6500 additional living expenses limit. If your house burnt down and was covered by your insurance, that means you’d have up to $400,000 to rebuild the structure of your home, $50,000 to replace your belongings, and $6500 to help cover your additional costs of living away from your home while it’s rebuilt.

Finally, you have your coverage options. The more extensive your coverage, the more expensive your home insurance will be. An insurance broker can help explain your coverage options and determine which ones are necessary and fit your budget.

 

 

Home-Sharing Insurance

aerial view of suburban neighbourhood

Home-sharing is an alternative to hotels that allows visitors to a city to stay in a privately-owned room, apartment, or home. This phenomenon has exploded in popularity across the globe as an affordable alternative for travellers. Plus, homeowners can make some side income from their property. Home sharing isn’t without its risks, however – it was a nightmare for one Calgary family when they agreed to rent out their home for a group attending a wedding. Once the Calgary family returned home, they discovered their house in ruins. The group staying as guests in the home had caused roughly $150,000 in damages. Unluckily for this couple, home-sharing insurance was not yet offered in Canada.

While home-sharing can be a great idea and doesn’t usually go this wrong, it’s a good idea to be prepared for what happens if it does. For example, do you know if damage caused during home-sharing would be covered by home insurance? We’ll break down the impact of home-sharing on your insurance as well as your options for protecting yourself.

Is home-sharing covered by home insurance?

Your coverage may depend on your individual policy and your insurer. Generally, since you’re generating an income through home-sharing, your home insurance will not cover you.

However, more and more insurance companies do offer a special add-on coverage (“endorsement,” in insurance lingo) that will help protect you if you participate in home-sharing. There are often a few conditions, such as:

  • You must list and rent your home through an approve home-sharing platform such as Air BnB.
  • You can only rent your home for a particular number of days each year (to qualify it as a short term rental).

The conditions may change depending on the insurance company.

Do home-sharing platforms offer coverage?

The “Host Guarantee” from Airbnb is “designed to protect hosts in the rare instance of property damage to their possessions by a guest staying in the space. The Host Guarantee is not insurance and doesn’t replace your homeowner’s or renter’s insurance.” Therefore, only direct damage induced by a guest is covered by this policy. This means no liability, no damages to cash or pets, and no theft compensation. There is also Host Protection Insurance in a situation where a guest is injured on your property during their stay which covers up to $1,000,000 in liability. Other liability cases are not covered.

Other home-sharing companies offer similar insurance coverage to Air BnB, but it’s important to read the full terms and conditions to see exactly what’s covered. Every company is different.

While you’ll hopefully never need to use this coverage, there is the potential for a lot to go wrong with home-sharing: theft, damage, harm caused to your pets, someone getting hurt, getting sued and more. These are all costs you may have to cover out of pocket. Ensuring you’re protected with the home-sharing platform coverage and personal or commercial insurance will help reduce the financial burden on you if the worst happens.

What are my home-sharing insurance options?

Aviva and Wawanesa both offer their clients coverage for home-sharing with special add-on coverage. This protection includes:

  • Damages or losses to personal belongings or the building
  • $1500 worth of a guest’s damaged or lost property
  • Any criminal acts or intentional acts by a guest
  • Fair compensation for loss of rental income

Your premiums for this additional protection depends on how frequently you plan to have guests. Generally, you are only covered if you home-share through an approved third-party home-sharing service such as Air BnB.

If you plan on participating in home-sharing more than 60 to 180 days per year or have purchased a property exclusively for home-sharing, you should look into landlord or rental property insurance. This can provide comprehensive coverage for a home that you are planning on home-sharing long-term, including property damage and liability. This may help reduce the costs of paying to rebuild or repair the home and replacing furniture and other items owned by you. It can also help cover your legal expenses should you be sued by a guest. Many policies also include fair rental value, which can provide you with some financial help if you lose rental income during a covered loss.

Your insurance broker is an excellent resource if you plan on home-sharing: talk to them about your plans and they’ll help you review your insurance options.

 

Protecting Yourself While Home-Sharing

Opening up your home to temporary guests can be daunting. While most people will be great temporary tenants, there’s always the possibility of an accident or a bad guest. Here are some tips to help you protect yourself while home-sharing:

  • Protect yourself with home-sharing insurance.
  • Follow the rules laid out by the home-sharing company.
  • Remove any valuables or things you don’t want others seeing or messing with.
  • Change any passcodes/how to enter the home regularly (especially if you don’t personally give each guest a key).
  • Have an inventory and review it after each guest.
  • Leave a guide on how to operate everything, including heating, appliances, and the shower.
  • Establish rules for your home and communicate them to guests.
  • Check your home for hazards and perform maintenance as needed.
  • Ensure smoke and fire alarms are working.
  • Install a water alarm to warn you of potential water damage.
  • Cover all electrical outlets except for one or two.
  • Don’t put candles in the home.
  • If you allow smoking in or outside of the home, provide ashtrays.

With any luck, you’ll have great guests and never need to worry about damage or someone getting injured. But accidents happen – and so do bad guests. Protect yourself and your home with the proper insurance coverage to reduce the impact on you should the worst happen. Talk to your insurance broker today to find out more.

Bylaws and Home Insurance: Expectations vs Reality

 

View of Calgary neighbourhood and downtown on a winter evening

Bylaws and Home Insurance: Expectations vs. Reality

Imagine a situation where you’re out to a fancy dinner in Canmore to celebrate an important milestone. Near the end of the dinner, you get a frantic call from a neighbour. Your home is on fire! Thanks to Calgary’s great fire fighting services, only your kitchen has significant fire damage. However, there is still smoke and water damage to other areas of your home.

It would be quite a shock, but luckily an adequate home insurance policy will cover most of the costs. You would be compensated for the clean-up, tear-down, and reconstruction of the damaged areas as well as for the replacement of your belongings. You’d also receive some help with additional living expenses if you needed to vacate your home during this process. However, the one thing you may not be covered for is the costs to conform to the updated bylaws of the city. This can be a huge expense depending on when your home was built and should be a concern for all homeowners, as municipal regulations are always changing. For example, if your home had been built 50 years ago, there would be a lot of updates you would be required to comply to – and these upgrades wouldn’t be covered by your home insurance.

Bylaws and home insurance aren’t often thought of together, but it’s important you consider the impact of municipal regulations on your home insurance and finances in the event a catastrophe occurs. While the expectation is that bylaws would be covered in your home insurance, the reality is that they’re often not included in standard coverage.

Bylaws and Home Insurance: How Home Replacement Cost is Affected

Bylaws are difficult because they are constantly changing. These changes are necessary to help protect lives and infrastructure, however, they can be a nightmare to deal with when you’re rebuilding a home after an insured claim. That’s because most standard home insurance policies agree to rebuild your home nearly exactly like it was. However, this is sometimes impossible as bylaws have changed to prohibit certain designs or materials.

For example, if an Edmonton home that was built 30 years ago were to be rebuilt after an insured loss, the reconstructed property would need alterations to comply with the current municipal bylaws. Say, hypothetically, it was now regulation for all homes to install a sprinkler system. These can be up to $2,500 or more. Since this was not a part of the home which was destroyed in the first place, your insurer probably won’t compensate you for this additional cost. Generally, if a property is over a decade old it no longer meets the requirements of the present public regulations.

Basically, bylaws increase your home’s replacement cost. However, these changes are not covered as it was not originally part of your home as per your insurance contract.

Bylaws and Home Insurance: The Exceptions

There are two exceptions where bylaws wouldn’t impact your insurance coverage:

  1. Your insurer pays out actual cost value or replacement cost instead of rebuilding.
  2. You have an add-on that covers bylaws.

In the first case, your insurer does not require you to rebuild your house as-is. Instead, your insured claim is paid out based on your settlement option and your policy limits. As the insurance company isn’t rebuilding the house, you’re free to construct the building you want. Of course, you’d still have to follow the bylaws, but you could alter your rebuild to be within your budget.

In the second case, you have an endorsement or add-on coverage that would cover the cost of updating to current bylaws. So, if you had an insured loss and needed to rebuild your home, the difference in costs to be compliant to municipal regulations would be covered. Otherwise, you’d be on the hook.

Some insurers are now including bylaw coverage in some of their comprehensive home insurance packages. Check with your broker to see if bylaws are covered.

 

 

In order to protect yourself, you should discuss your options for covering bylaw update expenses with your independent insurance broker. Insurers and policies differ from company to company; some companies will include this coverage, where a lot of others will request that you add it to your policy.

7 Uncontrollable Factors Affecting Home Insurance Rates

View of a Calgary or Edmonton cal-de-sac with large, nice, new-build homes, each with a 2-car garage. The garbage and recycling containers are on the curb

7 Uncontrollable Factors Affecting Home Insurance Rates

Factors affecting home insurance rates include those that determine the likelihood of damage to your home and the cost to repair or replace your home. Some of these factors are manageable by you but others are entirely out of your control. Unfortunately, many people don’t know what factors affect home insurance premiums and this results in a lot of frustration when there is an increase in their insurance bill. This is especially true if they’ve been claim-free for years. So what affects your home insurance rates? First, we’ll look at what individual factors are affecting your home insurance rates and then we’ll review the ones you have no control over.

Personal Factors Affecting Home Insurance Rates

  • How much your home and your belongings cost
  • What your deductible is
  • What your coverage options are
  • Your insurance history and claims history
  • Any remodels or upgrades done to your home
  • High-risk features, like pools, wood stoves, and trampolines

These factors can affect your home insurance rates positively or negatively. For example, if your home is older, it may cost more to insure as the wiring or plumbing may be more likely to fail and cause damage. On the other hand, an upgrade could increase the cost of replacement for your home. It’s a complicated formula, that’s for sure.

Uncontrollable Factors Affecting Home Insurance Rates

While you can control some factors affecting your home insurance rates, others are out of your hands (unless you move).

1. Frequency of Natural Disasters

Alberta has experienced a string of natural disasters over the last few years and these are likely reflected in your latest home insurance renewal. Between the 2016 Fort McMurray fires and the 2013 floods across the southern areas of the province, Alberta experienced a blow of $14 billion dollars in damages. The frequency of these natural disasters impacts your insurance rates, as the more at risk your location is for such events, the more expensive insurance will be. With the number and severity of these natural disasters increasing, it is likely that insurance costs will continue to rise.

2. Insurance Fraud

Insurance fraud occurs when a home insurance policy owner deliberately makes a claim that is exaggerated or misleading. A few situations that would count as fraud include:

  • Deliberately damaging property to make a claim
  • Exaggerating the cost of items stolen in a burglary
  • Constructing fake receipts or repair bills
  • Lying about commercial or rental usage for a property
  • Overstating the severity of the damage
  • Failing to disclose the true circumstances of the damage

An increase in the frequency of fraud has put a considerable amount of pressure on insurance companies and prompted an increase in rates.

 

3. Labour and Building Material Costs

The cost to repair your home is tied in with labour and material costs. Unfortunately, these follow the cycle of supply and demand which means they can fluctuate. If your area has been hit with a natural disaster, your insurance company could be paying much higher costs than if your home was the only one damaged by a fire.

4. The Frequency and Severity of Claims in Your Area

We know that when you make a lot of claims, your insurance premiums may be higher as a result. On the other hand, should you be claims free or have very few claims you will likely have a lower rate. But this also applies to people living in your area. If there are a lot of claims for weather-related damage or theft, your insurer will probably interpret this as meaning your area is higher risk and will potentially increase your premiums.

5. Your Home’s Proximity to Risks

Where your home is located is a key factor affecting home insurance rates. Proximity to risks such as rivers and cliffs will may your home more expensive to insure.

6. How Old Your Home Is

Your home’s age determines many of its risk factors. An older home often has wear and tear, which can increase its chance of damage. It also often has outdated plumbing or electrical systems. Upgrades can help reduce insurance costs and make your home more efficient and safer to live in. Talk to your broker about your options if you have an older home.

7. You Home’s Distance from Fire Services

The farther your home is from a fire station or fire hydrant, the higher your insurance premiums will be. That’s because when it comes to fire, time is of the essence. If a fire station is nearby, crews can get to your home quickly. If there’s a fire hydrant, they’ll have the resources to fight the flames. If they take a while to get to you or don’t have access to water, their ability to save your home is impaired.

 

If you have any questions about factors affecting home insurance rates, your insurance broker can help. They can also help you save money on your home insurance premiums and get the best coverage for your needs at a competitive price.

8 Scenarios Not Covered by Home Insurance

 

Woman looking forlornly at her kitchen wall which is covered in mould.

8 Scenarios Not Covered By Home Insurance

Home insurance is for anyone who is interested in financial security, peace of mind, and safeguarding their home and belongings. It’s also required by many mortgage lenders. Home insurance covers many different scenarios and causes of damage but the extent of your coverage depends on your insurance company and your coverage options. As a homeowner, you should be aware of what is and what isn’t covered by your home insurance. Even the most comprehensive coverage may require separate endorsements (add-ons) to protect you from certain perils like earthquakes and water damage. Common scenarios not covered by basic home insurance include:

  1. Flooding
  2. Wear and tear
  3. Mould
  4. Actions from public authorities
  5. Vermin infestations
  6. Nuclear accidents
  7. Earthquake, sinkholes, or mudflows
  8. Dangerous dogs

While some of these perils can be protected against with an endorsement (add-on coverage) some of these scenarios are not covered by most home insurance companies. Why aren’t these covered? They’re usually prevented by good home maintenance or they are considered too risky for the insurance companies. We’ll review each of these items in detail to help you understand your home insurance a little better.

1. Flooding

Water damage is not generally covered under your typical basic home insurance policy, although some insurers are offering this as part of a comprehensive home insurance package. Most insurance companies offer flood insurance as an endorsement or add-on coverage. This optional supplementary insurance extends your protection to include overland water and sewer back up damage. This includes water damaged caused by bodies of water overflowing, rainfall, snowmelt, and backup of liquid from your drains into your home. Sewer backup coverage can often be purchased separately without the overland water portion, too.

It’s important to note that “flooding” damages caused by something like a burst pipe or malfunctioning washing machine may be covered by your normal home insurance policy. Other sources of water damage, such as a tsunami or seepage from groundwater, may not be covered at all. Exactly what’s covered will vary by the insurance company, so be sure to talk to your broker to understand your home insurance coverage.

2. Wear and Tear

Any damages caused to your home which can be written off as wear and tear will not be covered by your home insurance policy. This is because your coverage is intended to safeguard your house from sudden catastrophic losses such as fires and major storm damage. You, as the homeowner, are held responsible for performing rudimentary upkeep to protect your home.

3. Mould

Like with wear and tear, you as the homeowner are held accountable for the general maintenance of your home. Mould typically results from negligence following water damage or a home that wasn’t properly repaired afterwards. As mould is preventable and slow-moving, you are expected to notice and repair it. Proper restoration after water damage is critical!

4. Action from Public Authority

In a situation where armed municipal, provincial or national officers or the army needed to breach your home, your insurance policy will not compensate you for any damages incurred. This is because any perils caused by a public authority is not generally included in your coverage. You may also not be reimbursed if any authorities had to seize your personal belongings, take over your land or commandeer your home.

5. Vermin Infestation

Whether it is bedbugs, termites, mice or any other sort of vermin, you will most likely not be reimbursed for the damages caused by the infestation of these creatures. Technically, infestations are made worse by a buildup over time, and most insurance companies consider the removal of vermin and upkeep of your home a part of general maintenance.

6. Nuclear Accident

Should you live near a nuclear power plant, your home insurance is fairly likely not to extend to any damages induced by a nuclear accident. Unfortunately, most insurers do not offer add-on coverage that will extend your protection to this kind of incident. Nuclear power plant companies are often obligated to supply liability insurance in order to compensate for damages as long as you live within the area of risk.

7. Earthquake, Sinkhole or Mudflow

Any damages induced by the shifting of the earth underneath your home are not usually covered by your home insurance policy. This includes earthquakes, sinkholes and mudflows. However, there are additional coverage options that will cover this kind of damage. This only refers to damages directly caused by the earthquake itself, and earthquake insurance often has a higher deductible than regular insurance. Nevertheless, it is recommended that homeowners who live in earthquake-prone areas have this coverage in case of an incident.

8. Dangerous Dogs

Dog bites comprise over one-third of home insurance liability claims, so it may not be a surprise to learn that not every dog breed is covered by your typical home insurance policy. Breeds which are known for having aggressive tendencies or have been otherwise branded as dangerous may be left out of a policy. Some insurance companies might request additional information about your pet to assess whether or not there is a history of aggression or a higher risk of a dog attack. Your broker will be able to determine whether or not your dog’s breed affects your insurance – this isn’t the case for all insurers!

Understanding your policy will help set you up for financial security and peace of mind when it comes to protecting your home. Knowing what your policy does and doesn’t cover is critical. Your broker is an excellent resource for all of your questions and to help you interpret all of the insurance lingo. Contact us today with your questions!

Cannabis legalization and your insurance: What you need to know

On October 17, 2018, the Government of Canada legalized and regulated access to cannabis.

This legislation will:

  • Allow adults to possess up to 30 grams of legally-produced cannabis
  • Allow adults to grow up to four cannabis plants per household
  • Set the minimum age for purchase and use at 18 years of age, with the option for provinces to increase the age limit
  • Enable a regulatory regime for the licensed production of cannabis, which would be controlled by the federal government
  • Enable a regulatory regime for the distribution and sale of cannabis, which would be controlled by the provincial government
  • Establish new provisions to address drug-impaired driving, as well as making several changes to the overall legal framework to address alcohol impaired driving

Should you choose to use cannabis on a recreational or medical basis, here are some important things you need to be aware of with regards to your insurance.

Car Insurance and Cannabis

In June of 2018, Alberta’s alcohol and drug impaired driving offences came into effect to align with new federal drug laws.

With the legalization of marijuana, cannabis use is being looked at the same way as alcohol use when it comes to getting behind the wheel. While legal, if you are driving under the influence of marijuana and are over the legal limit, even if it is intended for medicinal purposes, it will affect your insurance the same way an alcohol conviction would.

Whether it is from alcohol or illegal drugs, a DUI is a criminal code conviction that will stay on your record for five years from the date of conviction. You will also automatically have your license suspended. These things combined can affect the rates you pay for car insurance for several years. During the first three years, you are considered high risk and will be charged an extra free on top of your premiums. The next two years you are eligible to be placed in a regular insurance market but will also be charged an extra fee for a higher risk as well.

The hike in your rates comes as a direct result from insurance companies seeing you as a greater risk based on statistics and actuarial data.

According to data from Intact Insurance, drivers with a DUI conviction are 30-40% more likely to be involved in an accident. Data from MADD Canada says 30% of drivers with a DUI; get another DUI within 10 years.

Lastly, should you cause an accident while driving under the influence, you forfeit the right to claim for any damages and injuries to a third party.


Legal Limits

Under the new drug-impaired driving offences, the maximum amount of THC blood concentration level a driver can have is 2 nanograms (ng) per millilitre (ml).

Note:  Drivers under that Graduated Driver Licensing (GDL) program that are found to have any amount of cannabis or illegal drugs in their blood are now subject to the same provincial sanctions that apply to alcohol. These include:

  • immediate 30-day license suspension
  • immediate 7-day vehicle seizure
  • must remain in GDL program for 2 years and have no suspensions in the last year to graduate from the program

For more information regarding the impaired driving law changes in Alberta, click here.


Cannabis and home insurance

When it comes to having medicinal cannabis, marijuana plants, or cannabis accouterments in your home, depending on which company your insurance is with, you will be provided coverage under the contents section of your home, condo and tenants insurance policy.

For more information on the legal amounts of cannabis possession under the new legislation, click here.

The above mentioned items related to cannabis can sometimes fall under what is called a special limit. A special limit on your insurance policy is essentially a limitation within the wording of your coverage that outlines the maximum that would be paid out for certain items in the event of a claim.

Please contact your Sharp Insurance broker to discuss special limits on your policy as every insurance company is different.

At Sharp, we understand the insurance can be complicated and confusion. As always, feel free to contact your Sharp Insurance broker with regards to any questions or concerns you may have with regards to the legalization of cannabis and your insurance.

10 Foolproof Tips To Save On Home Insurance

Whether you’re an established home buyer or you’re looking to enter the real estate market for the first time, leaving some room in your budget for home insurance is key.

The good news is, our insurance experts have compiled 10 ways that can help you save on your home insurance. Check out the list below, then contact your Sharp Insurance broker to see if you can take advantage of one (or all) of these discounts.

  1. Bundle and Save

Insurance companies want your business, and they want you to consolidate all of your insurance needs in one place, on one policy. The good news is that by bundling your home, tenants or condo insurance with your other insurance needs like your car insurance, you could save up to 20%.

As an added benefit, your insurance becomes simplified with one premium, one renewal date, and in the event of an incident involving your home and car, you only pay one deductible.

  1. Guaranteed 5%

There is lots of choice when it comes to direct writers and insurance brokers in the market today. That’s why at Sharp, we guarantee we can save you money on your insurance. On your next renewal, bring your policy to Sharp and we will beat your current premium price by up to 5% – guaranteed. Some conditions apply. Policy must be within participating markets. To learn more or get a quote, contact us today.

  1. Purchase a newer home or condo

Newer homes, that are roughly ten years or younger, are more likely to have updated roofs, electrical and plumbing – making them less likely to have a claim. Many also come with sprinkler systems or water damage prevention devices. If you’re in a newer property, ask your Sharp Insurance broker if you are eligible for discounts.

  1. Location, location, location!

Another thing insurance companies will look at when determining your premium is the location of your property. They will often ask how many meters or kms to the nearest fire station or fire hydrant. Being near emergency services is more likely to save you money on your home insurance. On the flip side, if you are looking at a property close to the river or areas that are prone to flooding, don’t anticipate saving any money on your premium, as you’re at a higher risk of making a water damage claim.

  1. Give your property a face lift

Whether you’re buying a new home or simply giving your current property some much needed renovations, it’s important to let your broker know. Certain renovations and upgrades can save you money on your home insurance. These include:

  • A new roof – insurance companies love rubber, slate or steel roofs and other more fire and weather resistant materials. They often will come with a discount due to the grade of building material.
  • Water sensors, sump pumps or backwater valves that help protect your property from water damage and can earn you valuable discounts.
  • New electrical – increasing the amp’s to your home
  • Heating – type of furnace or simply having it inspected and cleaned yearly
  • Plumbing systems – type of plumbing, having an automatic shut off.  Did you know you can connect your plumbing system to your monitored alarm to watch in case of an issue?
  1. Annual premiums

Many of the insurance companies we work with will offer discounts if you pay your premium annually in one lump sum, as opposed to paying your premium monthly. You could save up to 4% by paying your premium annually. Talk to your Sharp Insurance broker to determine if this is right for you.

BONUS TIP: Some insurance companies will also offer a discount to homeowners that are mortgage free.

what does home insurance cover

  1. Safety first

By installing devices that protect your home, belongings and loved ones you are not only more prepared in the event of a break-in or fire, but you may qualify for savings on your home insurance.

Houses alarms, sprinkler systems, carbon monoxide detectors and fire extinguishers are all great additions to help keep your home happy and safe. Talk to your Sharp Insurance broker about how they could help you save up to 20% on your premium.

  1. Improve your credit score

Your credit score measures your financial health. More than half of Canadian insurance companies utilize your credit score as a way of calculating the likelihood of you making a claim. If you have good credit, you could be rewarded with preferred pricing on your policy.

  1. Claims free is the way to be

If you have made several claims in the past it could show that there are underlying issues with your home, or that you live in an area more likely to result in a claim. The longer you maintain a claims free status, the less risk you present to the insurance company. Many insurance companies will offer discounts on your home insurance when you have been claims free for several years.

  1. Talk to a broker

At Sharp, we’re not like the other guys. Since we’re not owned by an insurance company you know that we are working to find the policy that meets your needs at a great price. Great coverage, a low price, unbiased advice – what more can you ask for? Talk to a Sharp Insurance broker and start your home insurance quote today.

BONUS TIP: By increasing your deductible you can save on your annual premium. Did you know that many companies will let you place a deductible on specific types of losses – like water or wind and hail.  You can choose to increase those deductibles to save money – great thing to do if you are in a higher risk area.