Home Insurance

Your Home maybe your most valued possession –  purchasing the right Home Insurance can be a very important part of home ownership.  

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WHY You Need It

If you are purchasing a new home (with a mortgage), your lawyer will not release the keys to you until you provide them with written confirmation that you have placed a Home/Homeowners Policy on the house.  All Mortgages require that the owner purchase home insurance.  In addition, it is a condition of the mortgage that the homeowner must maintain home insurance until the entire mortgage is paid off.

The mortgage company (bank, credit union, mortgage broker) will usually offer you life or disability insurance on your mortgage.  This policy will pay off the balance of your mortgage if you are disabled and cannot work or die.  Home Insurance is very different, it pays for the cost of repair or replacement for damage caused to the home from an “insured peril” (ie. covered by the policy).  Without Home Insurance, this cost would be paid by yourself.

Description

Home Insurance Packages (also called Homeowners Insurance Policies) provide coverage for your home and will automatically include coverage for outbuildings (shed, garage, fences) and personal property (contents of the house), as well as additional living expenses (in the event that your home becomes uninhabitable due to a claim), this would cover the cost of the additional costs of temporary lodgings.

Home Insurance Packages provide coverage on a replacement cost basis, so if your house has a fire, the insurance company will pay to repair or rebuild the home with a brand new home of similar quality.  If for example your TV is stolen, the insurance company will pay the cost of a new TV (after you replace it and submit proof of purchase).

If your home is heated by Wood or has a Woodstove, outdoor wood fired  boiler/heat, or any wood burning devices – see Wood Heat Section.

Liability

This coverage is included with all Home Insurance Packages.  It will provide coverage for:

Bodily Injury – covering injuries that happen to other people while on your property, or as a result of an injury for which you may be held liable).

Damage to Property Owned by Others – covering if you accidentally cause property damage to others (ie. To a neighbor’s property).

Liability coverage will follow you anywhere in the world.

How Much Coverage do you need?

When insuring your home, it is very important to determine the appropriate limit of insurance to be sure that in the event of a total loss, there is sufficient insurance to rebuild the home.

Part of the service provided by Reider Insurance, is that we will conduct a rebuilding cost estimate called an evaluation.  This is done by asking questions about the home and using appraisal software to work out the rebuild cost of your home.    In the end, the software provides an estimate of the cost of rebuilding the home.  Insurance companies require that clients insure to at least this amount. 

We recommend that all our clients purchase a Home Insurance policy that includes “Guaranteed Replacement Cost”.   If your home is destroyed by fire, an insurance company would pay for the cost to rebuild the home up to the limit insured by the policy.  With the “Guaranteed Replacement Cost”, the insurance company will pay to rebuild the home, even if the cost goes over the limit of insurance for the home.   

If you want to know what questions we are going to ask to provide rebuilding cost estimate  – click here for our Home Insurance Questionnaire Form.

Homeowners policies will automatically provide coverage for Personal Property (contents) based on a percentage of the building amount.  This is designed to make it easier for a client to purchase insurance without having to put much thought into how much coverage is needed.  

There is no requirement that you make a list of your possession in order to get insurance, however if disaster strikes, you will need to know what you are missing and it will help you significantly in knowing what you had.  Creating a Personal Property Inventory is the best way to make a list and to ensure that you have the correct amount of coverage.  See our: Reider Inventory Form.

An alternative way to do an inventory is to take pictures of everything you own, of each room (one wall at a time).  This will not help you in determining how much coverage you need, but it will help you in determining what was destroyed if there is a claim. 

It’s important to remember to keep your inventory and/or photos stored off-site – so that they don’t get destroyed if there is a claim.

What’s Covered

There are two types of coverage that make up the underlying layers of the home insurance policy.

Specified Perils

This type of coverage will list (or specify) what is covered (perils insured against).  In the event of a loss, only those perils on the policy will be covered.  The following is a list of the most common perils covered under a specified perils coverage:

 

N

fire or lightning

N

explosion or implosion

N

smoke

N

falling objects

N

impact by aircraft or land vehicles

N

riot

N

vandalism or malicious acts

N

water escape from a pipe, rupture or freezing

N

windstorm or hail

N

glass breakage

N

theft, including damage caused by attempted theft

N

water escape from a pipe, rupture or freezing

All Risk

This type of policy does not list the type of perils covered. Instead this policy agrees to cover all losses (all risks of direct physical loss) except as specifically excluded (it lists losses that are not covered). In the event of a claim, the loss would be covered as long as it is not excluded from the policy.

This type of policy will cover all of the losses of a specified perils policy but goes much further. Due to the structure of the policy it will cover circumstances such as accidental breakage, mysterious disappearance, losses that were never even contemplated.

Common Exclusions include:

M

sewer backup

M

flood

M

earthquake

M

wear and tear, mechanical breakdown, rust or corrosion

M

faulty workmanship

M

war, invasion, revolution

M

scratching, abrasion or chipping or accidental breakage of “fragile or brittle” articles

M

Water Escape, Rupture and Freezing will not be covered if you are away for more than 4 days during the normal heating season; unless you arrange for a competent individual to check your home daily. (Some insurance companies will allow you to have an alarm system monitoring temperature and some will allow more days or do not have this exclusion).

Home Insurance Packages

Homeowners Standard Form – This package provides Specified Perils coverage on your home and contents and is the most basic package policy available.  Some insurance companies no longer offer this coverage as the protection afforded by the Broad and Comprehensive Form is considerably enhanced and there is little call for these types of policies.  It’s important to note that we do not recommend this type of coverage, unless you cannot qualify for better coverage.

Homeowners Broad Form – This package provides All Risk coverage on your home and Specified Perils coverage on contents.  For example if you take a pot off the stove and put it on your countertop it would be covered as All Risk coverage applies to the building and the countertop is part of the building.  However if you take the pot off the stove and put in on the dining room table it would not be covered as Specified Perils coverage applies to contents and the dining room table is part of the contents.

Homeowners Comprehensive Form – This package provides All Risk coverage on your home and contents and is the best package available.  Reider Insurance recommends the comprehensive package as it ensures that you have the best coverage available and the annual premium difference is minimal.

Claims Examples Homeowners Standard Homeowners Broad Homeowners Comprehensive
Building(s) Contents Building(s) Contents Building(s) Contents
Fire or Lightning or Explosion
Smoke Damage (from cooking)
Riot, Vandalism or Malicious Acts
Theft
Glass breakage (Rock through window)
Windstorm or Hail (shingles blown off roof)*
Water damage from a pipe rupture or freezing
Falling Objects (Tree falls on House)
Impact by aircraft or land vehicles (Car hits garage)
Personal Liability
Collapse due to weight of ice or snow
Burned countertop (building) and kitchen table (contents) with hot pot
Red wine spilled on wall to wall carpet (building) and couch (contents)
Mysterious Disappearance (diamond missing from wedding ring or entire wedding ring missing)
Client sprays bug with bug spray – realizes it was spray paint and got all over kitchen cabinets (building) and microwave oven (contents)
Client roto-tilling garden accidentally hit air conditioning line (building) and patio furniture (contents)
*All insurance companies will cover the water damage to the home, some restrict coverage to the roof depending on age and condition of the shingles

 

What are the options?

There are many different optional coverages that can be purchased in addition to the Homeowners policy.

Glass Rider

This is an optional add-on offered by most insurance companies.  The Glass Rider reduces the deductible that you would have to pay for broken glass/window claims.  This does not modify the coverage, as all of the Homeowners policies will already provide coverage for your glass/windows, it just reduces the deductible and depending on the insurance company to either $25.00 or $50.00 or $100.00.

Sewer Backup

Sewer Backup coverage can be added to most home insurance policies.  In order to qualify, there is a sewer backup questionnaire that needs to be completed and approved by the insurance company.  This coverage will insure the water damage to your house, caused by escape of water from backup of your sewer, septic system, sump or drain.

When purchasing sewer backup coverage, it’s important to be aware that there is a sub-limit of coverage, which is the maximum amount of coverage in the event of a sewer backup claim.  Most insurance companies will provide coverage in $5,000 increments, so the client can optionally purchase $5,000, $10,000, $15,000, $20,000, or $25,000.  There are some insurance companies that offer higher limits and some offer the option, where there is no sub-limit and if available, this is the best coverage that you can purchase.

It is difficult to decide how much sewer backup coverage is the correct amount, however we recommend that clients think about how much damage could be caused to your home (buildings) and contents and think about the absolute worst case scenario.  These sub-limits have been the same for the past 20 years, however the cost of construction and cleanup have been skyrocketing.

A client with $5,000 coverage, will use most of this limit just for the emergency cleanup.  If you have a finished basement and have a sewer backup claim with 8 feet of water in your basement, you will need to think about the cleanup costs & tear out of drywall, insulation and flooring, the costs to replace your furnace/geo thermal, hot water tank, electrical systems, electrical wiring redone for entire basement, new flooring, new insulation, in addition to furniture and contents.

We recommend clients purchase sewer backup coverage based on their actual individual needs and based on the worst-case scenario exposure.  In the event that your limit is not sufficient, you will end up having to pay out of pocket for any amounts that go over your sub-limit.

One of the common pitfalls customer make when selecting their sewer backup limit, is that they choose a smaller sub-limit then they need, based on the odds of them actually having a sewer backup claim.  In Manitoba we also have a much higher risk of sewer backup and there is a reason why sewer backup coverage can be expensive.   We regularly see people using their sewer backup coverage and insurance companies advise that in an average year, the cost of sewer backup claims is on the rise.  In the past fire insurance claims have always been the most expensive claims paid out, however across Canada, insurance companies now pay out more in water claims than they do for any other type of claim.

 There have been changes in the coverage that sewer backup policies provide and there is generally no coverage for sewer backup that occurs where there is ANY evidence that it was caused by flooding or overland water or ground water.  

Overland Water

Most insurance companies offer Overland Water coverage as an optional coverage, however it can only be added to the home insurance policy if the client also purchases Sewer Backup Coverage.  This coverage will insure the water damage to your house caused by overflow of any body of fresh water (such as lakes and rivers) and run off or surface water (such as rain).

When purchasing Overland Water Coverage, it’s important to be aware that there is a sub-limit of coverage.  The amount of the sub-limit differs between insurance companies.  Some companies will provide the same limit as provided by the Sewer Backup Coverage.  Some companies allow you to select choices of different limits and some insurance companies do not have a sub-limit and this is the best coverage that you can purchase.

When selecting an Overland Water limit, we recommend thinking about how much damage could be caused in the absolute worst case scenario.  With sewer backup coverage, the maximum exposure is usually based on the amount of damage that would occur to the basement, however with Overland Water coverage, there is a risk of the entire first floor or possible the entire house being under water.

According to the Government of Manitoba Flood Facts, in the last 60 years, we have had 4 major floods (1950, 1997, 1999, 2011), which have caused substantial damage.   Sewer Backup policies no longer cover water that enters a home from overflow of a body of water, unless Overland Water coverage is purchased.  If you watch the news, it may come as no surprise that weather experts have said that flooding and major weather events are happening more often and the predictions for the future is that this will see this trend continue.

There is generally no coverage for Overland Water that occurs where there is ANY evidence that it was caused by ground water.

For more information on flooding, check out the Manitoba Government Flood Information Website:  www.gov.mb.ca/flooding/

Ground Water

Most insurance companies offer Ground Water Coverage as an optional coverage, however it can only be added to the home insurance policy if the client also purchases Sewer Backup Coverage and Overland Water Coverage.  This coverage will insure the water damage to your house caused by water entering through a basement walls or foundations or basement floors.

Ground water coverage is not available from all insurance companies.  Some provide a separate sub-limit of coverage and the option of adding the coverage, while others bundle the coverage together with the Overland Water coverage.  Some insurance companies do not have a sub-limit and this is the best coverage that you can purchase.

For more information see our guide on how to prevent Sewer Backup, Ground Water and Flooding

Service Line

Service Line coverage is an optional coverage.  Some insurance companies will include it when you purchase Sewer Backup coverage.  This coverage will insure the costs of repairing your underground water and sewer lines. In the event of a claim, it covers the costs of digging up your yard and then repairing the broken lines and cleaning and fixing up the yard if it was damaged by the repair.

In many cases, the insurance company will pay the cost of replacing the old water or sewer line with a new water or sewer line and this can often mean that the contractor will need to dig up the concrete floor in your house.

Some insurance companies also provide coverage for underground power lines, internet, and phones.   

This coverage has a sub-limit and most insurance companies offer the option of $10,000 of coverage – which can go a long way.  Without this coverage you would be forced to pay for all of these costs out of your pocket.

Earthquake

Earthquake is an optional coverage, which can be added to most home insurance policies.   Earthquake Coverage will insure the damage caused to your home and its contents by the shaking of the earth.

Earthquake coverage is especially worth considering if you live in an earthquake prone region, however as with any coverage it could still be worth considering.  The cost of earthquake coverage is usually relatively inexpensive in Manitoba.

Home Equipment Breakdown

Home Equipment Breakdown is an optional coverage, which can be added to most home insurance policies.  It will provide coverage for the breakdown of any of your homes systems, appliances and equipment caused by mechanical, electrical and pressure systems breakdown.

This coverage will ONLY apply if a breakdown is “Sudden”.  Wear and tear would not be covered as it typically occurs over time (for example the performance of the equipment slowly declines and its capacity diminishes).

We recommend this coverage, especially if you have expensive systems such as Boiler Heat, Geo/Thermal Heat, Pool/Hot Tubs, Home Automation, Electronics, etc.

Special Limits

There are many items which are covered by the home insurance policy, but that have sub-limits that apply to coverage.  These sub-limits are the maximum amount of coverage that the insurance company will pay in the event of a loss with respect to these items.  Each insurance company and type of policy will have different limits, so it’s important to ask about the special limits and make sure that they meet your needs.  We recommend thinking about a worst case scenario – such as a total loss fire, how much coverage would you need to replace all of your items in each type of item.

Some insurance companies offer a Special Limits Enhancement Endorsement where the sub-limits are bumped up to a higher limit and this could fit your needs.  All insurance companies offer the option to get more coverage by scheduling (listing the item(s) on the policy (Personal Articles Floater or Rider).  Some items (such as jewellery), will require an appraisal to establish value.  An additional premium will be charged based on the value of the each scheduled item.

  • Business Property (pertaining to a business, profession, trade or occupation)
  • Books, Tools and Instruments
  • Computer Hardware pertaining to a Business trade or occupation (including farming)
  • Computer Software
  • Securities
  • Money or Bullion (including gift cards, cash cards and gift certificates)
  • Watercraft (including furnishings, equipment and trailers that are not licensed (Coverage is only provided on a Specified Perils basis even if the policy would normally provide All Risk) – if you have a boat see Boat Insurance Section
  • Animals, birds and fish
  • Spare Automobile Parts
  • Motorized lawn mowers and other modernized gardening equipment or snow blowers (including attachments and accessories)
  • Trading and collectible cards (including sports cards), comic books, sports memorabilia
  • No Sub Limits if caused by Specified Perils, otherwise:
  • Jewellery, watches, gems
  • Fur garments and garments trimmed with fur
  • Numismatic property (such as coin collections)
  • Bicycle, tricycle, unicycle (including equipment and accessories)

deductibles

All policies contain a deductible clause – this is the portion of the loss that you will be responsible for.  If you have a break in and the claim comes to $2,000 – you would be responsible for the deductible (in Winnipeg the standard deductible is $500) and the insurance company would pay the remainder.  One purpose of the deductible is to prevent smaller claims and therefore a reduction in premium is available for higher deductibles.

  Insurance companies offer options such as $750, $1,000, $2,500, $5,000, $10,000, $25,000 and sometimes higher deductibles.  The decision to go with a higher deductible will save you money if you do not have any claims, however every client should chose a deductible that they feel is appropriate to what they would be willing to pay if they have a claim and compare this to the cost savings provided.  The most popular deductible increase options are the $1,000 or $2,500 deductible.

Payment Options

There are different payment options available such as:

  • Full Payment
  • 3 Pay Plan
  • Monthly Automated from bank account or credit card

We accept:

  • Cash
  • Cheque
  • Debit Card
  • Credit Card (Visa, Mastercard, American Express)
  • Online Banking
  • E-transfer

Cottage, Boat, Rented Dwelling or Home Based Business

Cottage or Seasonal Residence or Seasonal Trailer

Boats

Rented Dwellings

Home Based Business

High Value Home Insurance

High Value Home Insurance packages are designed for insuring Custom Built Homes and high net worth individuals.  These policies are more expensive, however they will appeal to the person who always wants the very best – including their insurance coverage.  The best coverage for your home with significant enhancements.  Some of the key features of these policies include, appraisal of home to determine appropriate rebuilding cost, Simplified Claims Settlement – all claims are paid out at the replacement cost but with no requirements to repair or replace the building and/or contents.  As well, the sub-limits of insurance on these policies are enhanced for such things as Jewellery, furs, silverware, etc.)

There are also insurance companies that are now offering some of the high value home enhancements for clients who either don’t qualify as their home value is not high enough or who may want some but don’t want to have to pay for all of these enhancement features.

*  Please note all types of policies have exclusions, conditions and limitations.  This information is not intended to be a full explanation of coverages and in all cases the wording of the actual insurance policy will apply.

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*  Please note all types of policies have exclusions, conditions and limitations.  This information is not intended to be a full explanation of coverages and in all cases the wording of the actual insurance policy will apply.