Home Insurance for First Time Home Buyers in Ontario, Canada

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First-time homeowners can soon be overcome with this new home experience. There are a lot of steps to buying a home. The responsibilities don’t end when the deal is closed either. The need for insurance has to be addressed. There are two types of insurance that are going to be of concern.

  • The mortgage insurance
  • The home insurance

Do I Need Home Insurance?

Nobody can predict when a mishap may take place that involves homeownership. Statistics show just how often this happens. The latest statistics are clear indicators as to how important home insurance is

Statistics indicate:

  • A sharp increase in property claims going from 24.4% up to 39.3%.
  • Catastrophic losses are what the insurance companies report when they total $25 million or more.
  • The IBC (Insurance company of Canada is reporting catastrophic losses due to natural disasters are on the rise over the last decade. The following table is an example of the most common catastrophic events that took place between 1983 and 2016. These do not take into account catastrophic events that were under the $25 million figure. For example, storms that only affect some regions. Or where a tree has fallen on one particular house in a windstorm. Something that can happen to anyone’s house.

Common catastrophic Events between 1983 and 2016

Storms32
Wind14
Toronado7
Flooding5
Mixed weather storms62
Hail23

A National fire database has been developed  that show some startling statistics;

  • Between 2005 to 2014 there were 439,256 fire incidents
  • Same period 1,733 fire-related deaths
  • Same period 12,503 persons injured
  • In 2014 there were 19,062 structural fires – 74% of these were residential fires
  • Two leading cause of residential fires cooking and smoking equipment

On top of these potential perils, there are other insurance concerns such as liability, which is part of home insurance.

The statistics create a good argument as to why first time home buyers need home insurance like everyone else. But it isn’t just previous statistics that should encourage the new first time home owner to buy home insurance. It is facts about what has even taken place in the last five months. Which happens to be five major storms in Ontario alone that caused millions of dollars in damage.

What is Home Insurance Going to Cover?

The home insurance that you buy determines what will be covered. The insurance policies usually start off with basic coverage which is;

  • Your house
  • Other buildings on your property
  • Personal property
  • Liability

This forms the foundation for building the rest of the insurance package on. First-time homeowners insurance is a personalized product just like any other insurance product.

How Do I Personalize My Home Insurance?

You could have the same house as your neighbour, but your insurance needs are going to be different. You may have more personal property than what they have. There may be more people living in your home. Plus, you may have specialty items. It might be that you do a lot more entertaining so the liability risks may be greater.

You personalize your insurance by looking at what additional options are available that you may need coverage for. For example, you may want an additional property insured.

Then ask yourself is the coverage going to be enough to allow you to replace any of the items in the case of a mishap.

How Much  Home Insurance, Do I Need?

Look at each segment of your insurance and how much the coverage is. Then ask yourself is that going to be enough if you had to replace it? That will give you a good starting point in determining how much insurance you need. Then combine this with personalizing it.

What is the Best Way to Go About Buying Home Insurance?

The best way to go about buying home insurance as a first time home owner is to do some comparison shopping. Don’t just settle on the first quote that is given to you. Also, don’t just make your decision based on the cost of the premiums. There are several things you want to keep in mind when doing your comparison;

  • How extensive is the basic coverage?
  • How good is the selection of options?

What Kind Of Discounts Are There That Apply to You?

As a first time homeowner don’t underestimate the importance of the discounts. But, at the same time, a long list of discounts being offered shouldn’t sway you. Some may not be applicable.

Here are some common discounts;

Claims-free discount

As a first-time homeowner, this is not going to be of much benefit to you as you have never had home insurance before. It may be that the insurance companies offering this will not make it applicable to you.

Mature homeowner’s discount

Again, it is not likely that as a mature individual that you are buying your first home.

Mortgage free Discount

It is very few people who are buying their first home can afford to pay all cash for it.

Renewal Discount

May work for the future but not for the immediate

Focus on the Discounts You Can Control Now

There are several discounts that you can have control over, by making sure that your house has what is discounted for. For example,

  • Security system discounts
  • Deadbolts on locks
  • Smoke-free discount
  • Bundling discount

Which Insurance Company Should I Buy Home Insurance From?

The Insurance Company that you should buy insurance from is going to be the one that can meet your personal home insurance needs as a first time home buyer. Remember that insurance is a personalized product. Keeping this in mind along with the discounts that serve you best will help you to narrow down your choices as to which Insurance company is going to offer you the most for your dollars. You can even take it a step further. Do some general reviews on forums to see what kind of customer service an insurance company of interest has been rated for.

Resources

http://nfidcanada.ca/wp-content/uploads/2017/09/Fire-statistics-in-Canada-2005-to-2014.pdf
http://assets.ibc.ca/Documents/Facts%20Book/Facts_Book/2017/Fact-Book-2017.pdf
https://www.allstate.com/tools-and-resources/home-insurance/covered-in-homeowners-policy.aspx
http://assets.ibc.ca/Documents/Brochures/All-about-Home-Insurance.pdf
https://globalnews.ca/video/4239035/what-you-need-to-know-about-home-insurance

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