Home insurance 101 for homeowners and renters

The word “home” means something different to everyone. Whether home is a detached house, a duplex, a townhouse, or a condo, it’s important to ensure that your home and belongings are protected.
 
We’ve put together a quick guide to help you determine what type of insurance policy is best suited for you and your home. 
 
Detached home
If you own a detached home, you likely have freehold ownership. Freehold ownership means you own the house and the land it sits on. It also means that you are responsible for maintaining and insuring your home, the belongings stored inside it, and the land underneath and around it. A detached home is typically protected by a home and property insurance policy.
 
A standard home and property policy will provide coverage for the structure of your home (interior and exterior), your belongings, and personal liability protection. Additional coverage can be added to protect against risks that are not covered by a typical policy, such as sewer back up and identity theft.
Liability coverage protects you if someone is injured on your property and you’re held legally responsible. An example of this would be if a visitor slipped on your stairs, broke a leg, and sued you. It also covers instances where your negligence damages someone else’s property. For example, if you live in a duplex and cause a fire that impacts your neighbour’s unit, your insurance protects you.
Virtually all mortgage companies require borrowers to have insurance coverage for the full or fair value of a property (usually the purchase price) and won't offer a loan or finance a residential real estate transaction without proof of it.
 
Connect with your insurance broker to find a home insurance policy that meets your needs and ensures you have enough coverage.
 
Semi-detached home or townhouse
The type of insurance you need for your semi-detached home or townhouse depends on how the title of your home is registered. Typically, semi-detached homes (including duplexes and triplexes) and townhouses are registered as either a freehold or condo title. 
 
Check with your real estate agent or land registry office to confirm what your home is titled as. If it is freehold titled, your coverage needs will be like those of a detached home (see above). If it is condo titled, it means that you own a percentage of the condo corporation rather than owning the structure of your home and the land it occupies. In this case, you’ll need to speak with your insurance broker about a condo insurance policy rather than a home insurance policy.
 
Condo
Ownership of a condo unit (or semi-detached home that is condo titled) generally means you own your unit and co-own the common areas of the building or condo complex. As a unit owner, you are responsible for maintaining and insuring your unit. A standard condo insurance policy will provide coverage for the interior of your unit, your belongings (including those stored in a storage locker) and personal liability protection. 
 
Your condo corporation’s insurance will generally cover the building structure, grounds, and common areas, such as the lobby, hallways, and parking garage. In the event a claim is submitted through your condo corporation’s insurance policy, the deductible is typically shared by all unit owners. Speak with your condo corporation to understand what is covered under their insurance policy and what deductibles or maintenance fees you may be asked to pay in the event of a loss. 
 
Rental
If you’re renting your home, you’ll need to review your rental agreement with your landlord to determine what is covered under their insurance policy versus what coverage you will need as a renter. Typically, your landlord’s policy will cover damage to the structure of the house/unit or property but will not provide coverage for your personal belongings or liability exposures. Additionally, if the damage occurs due to an accident on your part, such as a kitchen fire caused by an unwatched pot, you could be on the hook for the damages. Ask your insurance broker about the benefits of a tenant insurance policy to ensure you and your belongings are protected.
 
Regardless of what type of dwelling you own or rent, you need to have enough coverage to get back to where you started if disaster were to strike. The best way to determine what kind of insurance policy is right for you is to connect with your insurance broker. Your broker will work with you make sure you have the coverage you need. If you have questions about your current home insurance coverage, contact us at 1-888-494-0900. If you would like to get a quote for home insurance, connect with an OTIP broker today at 1-888-892-4935.