Home is where the heart is, so protect it

You’re set to purchase a property and commit to the biggest financial decision of your life and you’re already feeling the weight of paying a mortgage. This is adulting on a whole new level. When considering the costs that extend beyond a mortgage, though, home insurance absolutely needs to be right there alongside property taxes and maintenance fees.

While it’s not mandatory by law, the only way to avoid paying property insurance is if your home is fully paid for (since any mortgage broker will require proof of insurance) so make sure you know that’s another fixed cost you’ll be tacking on top of everything else you’ve accounted for. And yes, even if your home is fully paid for it would be foolish to not have what is likely your most important financial investment uninsured.

Keeping home insurance in mind can help you when you’re shopping around since factors like the size of the house, how close it is to a fire station and fire hydrant are all reasons your home insurance could be higher or lower. In Ontario, for example, budgeting around $100/month is a good estimate considering the house prices we see now.

Which brings us to: what exactly are you paying for?

Protection against property damage is the most obvious answer, but the different types of possible causes are what you’re protecting yourself for. Whether it’s fire or vandalism, you can find coverage for it and what’s critical to understand here is that you can insure the approximate worth of your personal belongings as well, not just the value of the property. Damage that extends beyond your property can be covered as well and this falls under liability coverage. If you own a car and items are stolen from it, that can also be covered.

While all this applies to homes, it’s important to remember there’s condominium insurance as well, which is different from both home and tenant insurance. Condo insurance covers both your unit as well as a locker if you own one. Once again, damage to your unit and your personal belongings are covered as well as damage to other units. If you’re curious about if it covers what happens in the common areas of the condo, know that the condo itself will generally have its own protection for those incidents.

Condo insurance isn’t anywhere nearly as expensive as home insurance but is still more than what tenant insurance usually works out to. Whether you’re occupying the condo as your primary residence or renting it out to a tenant, protecting yourself is vital.

If you’re shopping around, Ratehub.ca is always a good place to start!