Buying a home? Things to know before calling your insurance company
Avoid frustrationIt’s finally time for one of the last chores when buying your new house: getting insurance.
But surprise, surprise: this is often a very frustrating call. And it may actually take several calls before you’ve secured coverage!
Your insurance company will want to know a fair amount about your new home. After all, buying a home is probably one of the biggest investments you’ll make. So you want accurate coverage!
The insurance company isn't going to want vague or approximate estimates. They need exact details, or as close as you can get! If you don’t have all this info, save everyone’s time and get the specifics on paper and in your hands before calling.
When to callDon’t leave calling to the last minute, a good idea is around 30 days before closing. If they require additional information you don’t have (and this happens a lot!), the last thing you want to be doing in a time crunch is scrambling for documents or reports.
What they need to know
- The complete civic address for the home. I know right? Seems obvious, but having the correct postal code and address to make sure you have coverage at the 100% right address. Confirm it with me or Canada Post! The last thing you want after buying your new home at 123 St W. is to find out you’ve been insuring 123 St E.!
- When is the closing date. If you don’t know your closing date, don’t call. You can’t insure something you don’t own. And they need to know exactly when to start insuring.
- Square footage. “I guess it’s between…” isn’t good enough. They need you to be as accurate as possible.
- Exact age of home. If it’s older than 20 years, this can open up a whole line of additional questioning. From plumbing and electrical, to heating systems and hot water tanks. If it’s older, be prepared to have lots of cold hard facts available.
- Name and full mailing address of your mortgage company. This is probably NOT the location of the bank or mortgage broker where you signed the paper work. Banks and brokers often deal with mortgage centres located in major hubs such as Calgary, Toronto, or Montreal.
- Pool? If so, is it fibre-glass or concrete?
Sometimes the bare-bones default coverage isn’t enough. You should also consider these carefully, depending on your new home:
- Water coverage. Not all forms of water damage are included by default. And yet water damage is more common than fires, and can be extremely costly! You may want to consider extra protection from sewage backup, and flooding. If the insurance company doesn’t mention extra water coverage, you may have to ask. And if the water coverage seems pricey, you may want to ask why. Expensive coverage may indicate the area is prone to flooding. All the more reason to make sure you’re covered!
- Guaranteed replacement cost. Say your new house burns to the ground. Tragic, but at least your insurance will rebuild it completely right? Maybe not. You’re only insured for a set amount at the time you signed up. After a lot of time has passed, what if material pricing has changed, or labour ends up being more expensive than estimated? The max you're insured for is the original amount you valued your home at. You could be on the hook for the rest of the bill! This is where a guaranteed replacement cost (or “GRC”) comes in. A lot of companies will add this to your policy automatically without charge! But some may want a fee, or if your house is too old, it might not even be an option! If that’s the case....
- Shop around. Don’t be afraid to shop around and make sure you ask about these important coverages. Calling early enough will give you time to choose the coverage right for you!