Admit it. You’ve never actually read through your entire home insurance policy have you?
Well, if you’re like most Ontario Homeowners then you probably just scan through the pages quickly to check your renewal premium, and then file it away with the rest of your paper work until next year.
But, do you actually understand the details of the home insurance coverage you’re paying for?
What most people don’t realize is that every home insurance policy has exclusions and limitations; and these are details that you definitely need to know. Not taking the time to review your home insurance coverage is a common mistake that could end up causing you a lot of unnecessary headaches in the future.
To help get you started, we’ve handpicked 5 common things that are not covered by a standard home insurance policy in Ontario.
1. Home Business
If you work from home or operate a business out of your home, you probably need additional property and liability insurance coverage. A standard home insurance policy may provide a minimal amount of coverage for some of your business property, but you want to make sure you are adequately insured to protect all of the things that help you run your business every day. Including items like furniture, equipment, computers, software, phones, inventory, and other business property located in your home. In addition, you’ll want to consider business liability insurance if you have clients, employees, or even delivery drivers visiting your home business. It is important that you disclose any home business operation to your broker because many insurance companies only allow certain types of business to be operated out of a home. Having an undisclosed business could result in a claim being denied or even your insurance policy being cancelled.
2. Flood Damage
Yes, some water damage such as burst pipes or overflowing toilets may be covered under a standard home insurance policy. However, water damage caused by flooding and/or sewer backup is not automatically covered. There may be options to protect your home from these additional risks, as some insurance companies do offer optional enhanced water damage coverage. Additional premiums and limits for extended water damage coverage vary by company and eligibility is based on your prior claim history and geographic location.
3. Earthquakes and Landslides
Although a standard policy may offer coverage for resulting damage caused by a fire, explosion, and smoke following an earthquake, any direct damage caused is not covered. This means things like structural damage, foundation cracks, or even complete collapse of the home would not be covered under the standard policy. Although the risk of a serious earthquake in Ontario is unlikely, earthquake coverage may still be purchased separately as an add-on to your policy.
4. Damage caused by birds, insects, skunks, rodents or bats
Generally, damage caused by rodents, birds, insects, skunks or bats is not covered by a standard home insurance policy. Similarly, neither is the removal of any of the above pests. Since infestations and the resulting damage are usually considered matters of home maintenance, the onus is typically on the homeowner to pay for repairs and/or pest control measures.
5. Wear and Tear, corrosion or gradual deterioration
As a homeowner, you are responsible for regular maintenance of your home. Any damage resulting from failure to deal with maintenance issues will not be covered by your home insurance policy. Generally speaking, anything that is not sudden and accidental, but instead occurs gradually over a period of time, would be considered wear and tear and would not be covered by your home insurance policy. A common example of this would be a crack in your foundation that results in a wet basement. Because a foundation crack is a maintenance item, it would not be covered and neither would the resulting water damage.
It is important to remember that in some cases, extensions of coverage may be available to cover any gaps resulting from the exclusions on the standard home insurance policy. It is a good idea to go through a detailed policy review with your insurance broker every year to make sure you have the coverage and limits you need to protect your home and your family.