Home insurance: what are the top 5 mistakes to avoid?

First mistake: rushing your decision because it’s boring to shop around for insurance

Even if you prefer to be doing something other than shopping around for home insurance, it’s absolutely in your best interest to not rush this important responsibility for you and your family.

• Take the time to read the policy that is being recommended to you.
• Don’t be afraid to ask questions so that everything you’re not sure about can be explained to you.
• To facilitate the process, have your notarized deed of sale on hand when speaking with your insurance broker on the phone. You’ll be asked to provide much of the information contained in that document. If you’re not the property owner, take the time to contact your landlord if you lack certain information.

Second mistake: focusing exclusively on price

Rather than immediately choosing the least expensive insurance policy available, take the time to carefully study the various options and choose the policy that offers the best value and best matches your needs:

• What type of home would you like to insure: a house, an apartment, rental accommodation for yourself or shared rental accommodation?
• Are you an owner or a tenant?
• Are you self-employed?

Don’t forget to carefully read the exclusions that cover all the situations where the insurance policy does not apply. Pay careful attention to reviewing the deductibles and the compensation limits.

Be careful: an attractively low premium could include a high deductible, an overly low compensation limit or overly broad exclusions. In the event of a disaster, you could be in for a nasty surprise!

Third mistake: automatically rejecting any endorsement

With a view to paying as little as possible, it might be tempting to reject all endorsements (additions to the basic policy) the broker might suggest. Perhaps you don’t need any, but at least take the time to consider them.

In general, house insurance covers usual risks such as fire (including forest fires), wind, hail, lightning, explosions, civil disturbances, theft, vandalism, and leaks or overflows in baths, toilets, washing machines, dishwashers or water mains.

However, be careful: flooding, water backups and outdoor swimming pools or hot tubs are not covered and require additional protection.

Animals, jewelry or art objects can also require special attention because standard policies often provide only limited coverage for these types of possessions. That’s why it could be appropriate or sensible to add some endorsements to your insurance policy.

To decide whether this is the case:

• assess your situation and your estate with your home insurance broker;
• try to anticipate all the situations you could face, such as fire, natural disaster, neighbourhood dispute, water damage, etc.;
• think about how you would feel if you were the victim of a disaster, and what you’d expect from your insurance at that time.

Fourth mistake: taking out your various insurance policies with different brokers

It’s usually preferable to buy your various insurance policies (home, vehicle, secondary residence, etc.) from the same insurer. This will facilitate your monthly payments and administrative procedures. In addition, your broker might also qualify you for a discount by combining your home and vehicle insurance with the same insurer.

Fifth mistake: lying (or… not disclosing everything)

Not telling the whole truth to your broker when you take out home insurance would be a very bad idea.

For example, failing to declare work activities at your home could, in certain cases, invalidate your insurance. If you’re self-employed and work at home, tell your broker so that you have the right coverage.

Concealing past problems you’ve had with your home could also put you in a very bad position if a similar problem recurs.

You’re required to maintain this transparency throughout the entire period of your insurance policy. In fact, according to the Civil Code of Quebec, the insured party is obliged to inform their insurer of any change that could modify the risk assessment made when the insurance policy was signed.

For example:

• if your new spouse (or… a pet!) has moved in with you, you need to have your policy updated;
• you need to notify your broker if you decide to redo the roof.

Choosing home insurance that closely matches your needs will let you sleep well at night. Contact one of our brokers – they’ll be happy to guide you in choosing the right home insurance even though the process might seem difficult at times. We’re there to help!