Consumers are naturally hesitant about purchasing insurance policies they think superfluous, however, suspicion often beclouds their better judgement
While it may seem counterintuitive to pay for home insurance and not understand the extent of its coverage, that’s exactly the case for 52% of Canadians surveyed by belairdirect.
“Fifty-two percent of Canadians with home insurance find it difficult to understand their policies and find them complicated, meaning they aren’t sure what they’re covered for,” said Émilie Dutil-Bruneau, director of communications, social responsibility and employer brand at belairdirect. “Thirty-one percent of Canadians with home insurance haven’t taken inventory of their properties, and when you don’t know what you have in your home, and what the value is, we recommend you take regular inventory of your belongings and share them with your insurance agents to assess if you have appropriate coverage.”
About 40% of respondents to belairdirect’s survey also believe their coverage automatically covers all of their valuables, however, there are, in fact, limits that extend to possessions like jewelry, bicycles, boats, and even money.
Mortgage brokers who sell insurance products can play pivotal roles ensuring consumers have proper coverage for their needs, which includes previously unavailable flood coverage.
“The most important thing we do is educate clients on the coverages available, their differences, and about the insurers and their reputations,” said Aly Kanji, president and CEO of InsureLine. “Generally speaking, natural disasters are more common occurrences, so we encourage people to have policies like overland water and sewer backup policies.”
Consumers are naturally hesitant about purchasing insurance policies they think superfluous, however, suspicion often beclouds their better judgement.
“People presume insurance is vanilla and that it doesn’t matter what you buy, but it couldn’t be further from the truth,” continued Kanji. “Insurance companies are all different and it’s kind of like buying a car: Chevy or Cadillac? There’s difference in cost, but you get what you pay for, generally speaking, and that’s another thing consumers don’t understand.”
A simple way to help new homeowners choose the right home insurance policy is by paying close attention to home inspection reports because contained therein are clues about what’s likely to go wrong.
“The home inspection is an important step because you get to know the house you’re buying,” said Dutil-Bruneau. “You’ll get all the information about the home’s heating system, the age of the water tank if there is a water tank, the age of the roof; these are all useful things when getting a quote for home insurance. That inspection report is a good place to start to help consumers assess their needs.”
Dutil-Bruneau added that an opportune time for consumers to take inventory of their belongings is while packing up their old homes.