By Lori Bamber, Managing Editor
There are few words more weighted with meaning than “home.” It’s not surprising – for many Canadians, home is their biggest investment and their most significant financial obligation as well as the heart of family life.
Todd Lawrence, the senior vice-president of insurance at CIBC, answers questions on the important role that insurance plays in protecting our homes.
What are some of the most important insurance-related decisions for new homeowners?
New homeowners often get caught up in the excitement of buying a house and may consider home insurance as a last step in closing their mortgage. But there are a number of important decisions to make when it comes to protecting their investment.
• Look at the type of insurance. This can range from comprehensive coverage for your building and contents to more limited coverage for specific perils only, such as fire and theft. It is very important for homeowners to take the time to review their insurance coverage in detail, to understand what is and isn’t covered.
• Consider the amount of coverage. This is the amount of money you would need to replace everything you lose in the case of an unforeseen event like a fire, including the cost to rebuild the house itself, and to replace clothing, furniture and other covered personal property destroyed.
• Think about affordability. Increasing the deductible, the amount you would pay toward the total amount of a claim, will reduce your home insurance premium.
We also urge new homeowners not to overlook the importance of mortgage creditor insurance. It provides protection by paying off or reducing the balance of your mortgage in the event of your death, if you become disabled and unable to work or if you involuntarily lose your job. It isn’t required in order to secure a mortgage, but it can be an important element of protection for your home and finances that supplements other insurance and provides a tax-free benefit.
Creditor insurance benefits provide financial security to you and your family – the comfort of knowing that all or part of your mortgage will be paid if you die, become disabled or involuntarily lose your job.
What are the key steps homeowners should take to ensure they have the coverage they need?
Ask yourself, if something unfortunate were to happen, would your family be able to continue with the mortgage payments, and to continue with its current lifestyle?
Then take the time to talk to an insurance professional, ask questions and fully understand your coverage in order to ensure that you, your family and your home are adequately protected.