Types of home insurance coverage in Canada
There are several types of home insurance coverage you can choose from. Each one adds more protection, but it will also cost more. You can choose a basic plan, get a comprehensive plan, and even customize it with endorsements. The type of policy you require will depend on your location, dwelling type, needs, and a variety of other personal factors. For example, whether your home is new or older, you have a swimming pool, or you are living in an area with greater flooding potential.
The type of policy you require will depend on your location, dwelling type, needs, and a variety of other personal factors. For example, whether your home is new or older, you have a swimming pool, or you are living in an area with greater flooding potential.
Most people opt for comprehensive because it covers more expenses. All are subject to a deductible. The deductible amount can vary based on the plan type and your preference.
Here is an outline of the different types of protection available:
Basic coverage / named perils
Basic named home perils coverage includes everything that is explicitly stated in the policy. It is an ideal choice for people looking to save money. It is the cheapest option, providing you with the most savings, but the least protection. It’s the least popular coverage option among our customers. About 6% of policyholders have this protection.
You are only protected from what is listed. Here is a scenario to explain how this works:
You have a named perils plan. You choose not to include vandalism as a peril. You wake up one morning to find your garage door has graffiti on it. Your insurance will not cover the repair because vandalism was not listed in your plan.
Broad coverage provides comprehensive protection on the building and named perils coverage on contents. It is a more affordable option. About 9% of our customers choose this coverage.
In this situation, you have coverage for most types of damage or loss to the structure of your home (some limitations may apply). But, you only have protection for belongings that are listed in your policy.
Comprehensive home insurance coverage provides you with the greatest amount of coverage against the largest range of threats. For this reason, it's the most popular among our policyholders. Based on quote data from our customers, 85% choose comprehensive coverage over other options.
It covers your structure and its contents. You will be insured unless a peril is specifically excluded.
This does have a few exclusions – sewer backup, overland flooding, and earthquake. These can be added as endorsements.
No frills coverage
All insurers do not offer this. It provides basic protection for homes that are not typical properties. This could include properties under construction, vacant properties, and other uncommon situations.