Types Of Home Insurance

Have you ever thought about how many different types of home insurances there are? Many people often assume that basic home insurance will cover all common damages or losses, however, that is not the case. The amount of coverage you have for your home will vary depending on the type of home insurance you select.

There are three types of home insurance: 

  1. Basic: this policy covers a specific list of events, meaning if any damage occurs from an event not listed, you are not covered.
  2. Broad: as expected, this policy covers Basic Insurance and then some, however, again, if any damage occurs from an event not listed, you are not covered.
  3. Special/Comprehensive: this is the most expansive form of house insurance. Unlike Basic and Broad, Special policies instead list exclusions from their policy–meaning, if damage occurs from the list of excluded events, you are not covered.

A model of a house with keys on a wooden table

Why do you need Home Insurance? 

Your home is the most expensive purchase you will ever make. If it is damaged or requires major repairs (for example due to a fire), house insurance will help protect you by making sure you can be partially or fully reimbursed for your losses.

Your lender will also require house insurance as a condition of your mortgage when you are purchasing a home so that they know their funds are safe. The minimum level of insurance you need will be based on the conditions and instructions the lender requires you to have.

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When should you talk to your insurance broker?

When you first purchase a new home you should first speak to a broker to discuss your options. Your broker will help you decide which policy will best protect your home and valuables. 

It is also a good idea to review your policy with a broker periodically. If you have made significant changes to your home, purchased contents that have a high value, or the market has fluctuated dramatically, your original policy may no longer be sufficient to protect you against loss. It is in your best interest to update your broker about these changes to ensure that you are still covered within your policy. 

By researching more about the type of home insurance fit to best satisfy your needs, you will be able to make the right decision and find a policy that is best suited for you and your home.