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Home insurance tips for first time buyers

 
First time homebuyer

Buying a home is an exhilarating and emotional experience. There are so many things to take into consideration that extend far beyond your budget and your ideal location. Before you get too deep into the process, you'll want to consider home insurance.

Home insurance is what protects you, your family and your possessions from loss and liability. It also protects your mortgage lender, which is why it's a requirement for securing a mortgage. Reputable mortgage lenders will not consider an offer to homebuyers without proof of homebuyers insurance.

Here are some of the things you should look for in a home insurance policy to ensure you're getting the coverage you need.

What matters to you, matters to your home insurance provider

When you're shopping for a new home, you may be researching how safe the neighbourhood is, if it's close to police or fire stations and if the house is new, old or in need of some major upgrades. Home insurers factor these variables into your home insurance quote too.

Other components can also impact your insurance quote. Your personal insurance history, the amount of contents and liability coverage you will need (more on those later); the age of your home and the neighbourhood it's located in can have all have an impact on your insurance rates.

If the home you're considering has outdated wiring and plumbing, for example, you may be required to upgrade this to modern methods before you're eligible for home insurance. Don't let this discourage you; this is something OTIP can help you with.

Talking to a home insurance broker before you buy

Working with one of OTIP’s licensed insurance brokers can help to ensure you're getting not only the best rates, but also the best coverage for your needs. We work with insurance partners from across the province to help educators like yourself find the coverage you need at a price that aligns with your budget.

To get an idea of what the cost of home insurance might be, go to otipinsurance.com and compare quotes for the various properties you're looking at. You may notice some variances in price among the properties, which may factor into your long-term budget for your home. However, this quote will look more accurate once you determine exactly what types of coverage you need.

Related: Up and Coming Ontario Neighbourhoods

Types of coverage

There are several types of coverage that fall under the umbrella of your home insurance policy, and each one of them can be customized to suit your individual and family needs. Here are the main components of a home insurance policy:

  1. Named Perils – Just like with your car insurance policy, ensuring you're protected from the proper perils is crucial. Most home insurance policies cover named perils such as fire, wind and theft, but you also have the option of adding additional coverage to your policy. Popular choices include sewer backup coverage and overland water protection, which protect you in the event of flooding.
  2. Contents Insurance – If you've had tenants insurance before then you're likely familiar with contents insurance; the portion of your policy that protects your belongings. It is under this section of your policy that you may wish to set up additional coverage, called a rider or an extension, for specific items of value such as jewelry.
  3. Liability – This part of your policy protects you in the event someone is injured or killed on your property.
  4. Loss of Use – This portion of your policy protects you in the event that damage from one of your named perils prevents you from being able to live in your home while it is being repaired. It typically covers emergency expenses as a result of your displacement, including the cost of hotels.

Deductibles

We get a lot of questions about deductibles. Your deductible is the amount you agree to pay in the event of a home insurance claim, and it can have a significant impact on your monthly home insurance savings. However, what's important is to ensure that you establish a realistic deductible that you can afford to cover in the event of a claim. This is something we can help you to determine. 

Talk to your broker today

Talking to an OTIP Insurance broker will help you to ensure that your home insurance policy provides you with the coverage and peace of mind you need. We know you have a lot to consider when purchasing your first home, so let us help you with the home insurance component so that you can devote more time to finding your dream home.

Please call us at 1-866-523-4111 today, or anytime during your home buying process, to learn more about your home insurance options and how we can assist you in the process.

We look forward to speaking with you and congratulations in advance on the purchase of your new home.

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