Why you may need home insurance

Home insurance may help protect your home and its contents in case of theft, loss, or damage to the inside and outside of your home or property. It may also help you cover additional living expenses if you're temporarily unable to live in your home. These additional living expenses may include living in a hotel or renting a home.

Home insurance may cover:

- damage or loss to your home
- damage, theft, or loss of your personal possessions
- personal property stolen from your vehicle
- damage or injury to others who visit your home or property
- accidental damage you cause to somebody else’s property

Insurance companies may refer to home insurance as property and casualty insurance. Property and casualty insurance also include car insurance, business insurance, and disaster insurance.

Examples of when home insurance may protect you

Home insurance may protect you in the following situations:

- Someone slips and falls in your driveway and makes a claim against you for the expenses incurred as a result of damage or loss caused by the injury"
- A fire starts in your house and causes damage to your home and your neighbor’s home

Condominium insurance
Condominium coverage is different from home insurance because it covers damage or loss for the inside of your unit and your storage locker. It also covers personal liability claims in case someone is injured in your home.

The condominium corporation will have a master insurance policy that covers the outside structure of the building and its common areas.

Condominium insurance may pay for:

- damage to the inside structure of your unit
- damage to, or loss of, your belongings
- damage to improvements you, or the previous owners, made to your unit
- damage to other units or the condominium common areas if they are caused by an accident that happens in your condo
- additional living expenses, up to a certain amount, if you're temporarily unable to live in your condominium because of a loss covered by your policy

Review your condominium unit’s insurance policy coverage and the condominium corporation’s master insurance policy coverage.

Tenant's insurance
You may want to consider buying a tenant’s insurance if you live in an apartment or rent your home from someone else. Insurance companies may refer to it as renter’s insurance.

You should have enough insurance to cover the cost of replacing everything in your home if it's destroyed or stolen.

Tenant’s insurance may pay for:

- damage to or loss of your possessions if you rent or lease your apartment or home from someone else
- personal property was stolen from your vehicle
- accidental damage you cause to any part of the apartment building or home you're renting
- injury to visitors
- additional living expenses, within a certain limit, if you're temporarily unable to live in your apartment because of a loss covered by your policy

For example, if a fire starts in your apartment, tenant insurance can pay for the damage caused to your apartment, the apartment building, and other tenants or their property.

Who a home insurance policy covers

Generally, your home insurance policy covers you and your family members.

If you share your home or rent out a part of your home to a friend, relative, or roommate, you must let your insurance company know.

Check with your insurance company, agent, or broker to review who your policy covers.

What a home insurance policy covers

Be sure you understand what your home insurance covers and what types of settlement to expect if you make a claim.

Types of home insurance coverage

Coverage is the maximum amount of money your insurance company will pay you if you make a claim for a loss or an event covered by your policy.

For home insurance, you may need a combination of two types of coverage.

Personal property coverage

Personal property coverage protects you from loss or damage to:

- your home or personal possessions
- your car

To figure out how much coverage you need, make a list of all your possessions with the following information:

- cost to replace the item (replacement value)
- make and model of the item
- serial numbers
- pictures of your belongings
- receipts for major items

This could be useful should you need to make an insurance claim in the future.

Liability coverage

Liability coverage protects you against legal liability for losses caused by:

- injury to other people
- damage to the property of others

Read the policy carefully before signing. Make sure you understand what your policy does and does not cover.

Ask your insurance agent or broker about anything you don't understand.

Types of home insurance policies

Insurance companies offer a range of home insurance policies with different levels of coverage against various risks and causes of damage. 

Home insurance policies vary from one company to another. It’s a good idea to shop around to get the best insurance for your needs.

- Comprehensive
- Standard
- Broad
- No-frill

Unexpected events

Generally, your home insurance covers unexpected events or accidents such as fire, windstorm, or theft. Insurance companies may refer to these types of events as perils. For unexpected events such as earthquakes, you may be required to buy additional coverage.

Predictable events

Events that your insurance company considers predictable and related to the maintenance of your home aren't covered. For example, if you're away for more than 4 days in a row when it's cold outside, your home insurance may not cover damage to your home as a result of your pipes freezing.

How your insurance company calculates your premiums

Premiums are the amount you pay to buy insurance.

When determining how much you'll need to pay for premiums, insurance companies may consider factors such as:

- the type of residence you live in, such as a single-family home, semi-detached, condo, rental property, or seasonal residence
- characteristics of your residence, such as materials your house is made of, age, size, location, the replacement value
- value of your property and contents to be insured
- the distance between your home and a fire hydrant or a fire station
- the crime rate in your neighborhood
- your claims history
- the type of policy and coverage you selected
- the amount of your deductible

A deductible is the amount of your claim that you agree to pay before your insurance company pays the rest.