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Tag: Home insurance

  • Canada’s home insurance under pressure as extreme weather costs rise

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    Raising premiums above the rate of inflation—sometimes steeply above—has been a common response, but experts say insurers are also increasingly excluding coverage of some risks, raising deductibles, and reducing their exposure to higher risk areas. 

    As Morningstar DBRS said in a November report: “The Canadian market is showing early signs of coverage tightening.”

    Insurers trim exposure in severe weather zones

    While insurers haven’t withdrawn from areas entirely, some have thinned their exposure.

    “We’ve rebalanced in some of the higher severe weather regions,” said TD chief executive Raymond Chun during the bank’s most recent earnings call. “Where we had a higher concentration in some of the high severe weather zones, we’ve moderated.” The bank is aiming for growth in regions with lower catastrophic risk instead, said Chun. 

    Have a personal finance question? Submit it here.

    Definity Financial Corp., which says it’s Canada’s fourth-largest property and casualty insurer after closing a $3.3-billion takeover of Travelers last month, has also taken steps to pull back in higher-risk areas. Chief executive Rowan Saunders said on the company’s November analyst call that they had worked to churn the portfolio, shifting new business to less catastrophe-exposed areas and reducing concentration in areas of higher peril scores. 

    He said the heavy lifting on shifting away from higher risk is largely done, but it will be a continuing effort. “That’s just ongoing good portfolio management.”

    Pressure to rebalance portfolios rose after costs spiked in recent years from already elevated levels, most notably 2024’s record $9.4 billion insured losses. But it’s far from a one-off. 

    What rising insurance losses mean for homeowners

    According to a report from TD, average personal property losses between 2020 and 2024 were nearly double the prior stretch, while the number of catastrophic weather events averaged 15 a year, up from around two per year in the 1980s. 

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    “Growing insured personal property losses are placing considerable strain on Canada’s home insurance sector,” said economist Likeleli Seitlheko in the report.

    In response to the costs, insurers are raising deductibles to upwards of $10,000 for perils like hail, reducing coverage, or simply not offering it for some risks such as flooding, he said. “In worst case situations, insurance coverage is simply not available for certain perils,” said Seitlheko.

    Coverage gaps persist despite growing flood risk

    Flood coverage, which was only introduced in Canada about a decade ago, has been patchy, with limited availability in higher risk areas. According to Public Safety Canada, Quebec has the highest number of properties at risk of flooding, followed by Ontario and British Columbia.

    The Insurance Bureau of Canada estimates that about 1.5 million households, or about 10%, can’t get flood insurance, while for those who can, it can add as much as $15,000 a year to premiums.  

    But even that’s overestimating how many can get coverage, said David Nickerson, who studies property economics at Toronto Metropolitan University. “The industry says that flood insurance is available to 90% of Canadians. That’s a gross exaggeration. Maybe 50%, effectively, because of the idiosyncratic nature and redlining of high-risk areas.”

    Part of the problem is patchy and outdated data to know which areas are at risk, said Nickerson, which is why the federal government is spending hundreds of millions of dollars to upgrade flood maps.

    Industry absorbs shocks while consumers pay more

    While insurance companies have a variety of sources of information, they can also still get caught out with concentration risk, as TD did in the 2024 Calgary hailstorm, said Nickerson. “They got pasted with that huge, huge loss, and so they withdrew to replenish their financial reserves.”

    Alberta has been a focal point of losses, where events like the $3 billion hailstorm and $1.1 billion Jasper wildfire in 2024 led to industry operating costs exceeding premium revenues by nearly 20% that year, according to the TD report.

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    The Canadian Press

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  • How much does a swimming pool cost in Canada? – MoneySense

    How much does a swimming pool cost in Canada? – MoneySense

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    The family was swimming in the pool less than a year after putting down a deposit with their pool contractor. However, the process wasn’t all smooth sailing. “Originally, we budgeted $80,000, and they laughed at us,” Rubinoff says. “There are costs you don’t think of, [and] cheaper isn’t always better.”

    If you’re interested in getting an inground pool, it’s important to know that there are many things outside of the pool itself that influence the total cost. There are numerous upfront choices to make regarding pool design, shape, size and pool decking, and each affects pricing, which can differ greatly from one contractor to the next. As with most major purchases, it’s best to shop around, do your homework and get detailed written estimates before signing a contract. This guide will help you through the process.

    Vinyl, fibreglass or concrete pool: Which is the best option?

    Most pool shoppers start by choosing one of the three most common pool materials: vinyl, fibreglass and concrete (also called shotcrete or gunite). Each type has pros and cons in terms of cost, construction and maintenance, which can also vary depending on the frequency of pool use, quality of upkeep, and quality of the pump, filtration and sanitation systems. Here are some average price ranges to help you make that initial decision:

    Vinyl-liner pool Fibreglass pool Concrete pool
    Installation cost  $60,000 to $100,000 $70,000 to $120,000 $100,000 to $250,000
    Installation time A few weeks One week A few months
    Seasonal maintenance cost  Up to $2,000, including $475 for chemicals   Up to $1,800, including $325 for chemicals   Up to $2,500, including $695 for chemicals 
    Long-term maintenance costs  • Replace vinyl liner every 8 to 10 years: $4,500 to $6,500 • Repair cracks (as needed): $3,000 
    • Replace interior gel coating every 20 to 30 years: up to $15,000     		 • Acid-wash pool every 3 to 5 years: $2,000 
    • Re-plaster pool surface every 10 to 12 years: $12,000 to $15,000
    • Replace pool cleaner parts: $500
    Pros • Lower initial cost
    • Easy upkeep
    • Customizable shape and size     		• Lower maintenance and lifetime cost (most economical) • Many shapes, sizes and designs available 
    Cons • Higher lifetime cost
    • Some vinyl pools can’t accommodate salt water
    • Possible liner punctures or tears (e.g., from pets)
    • Liner warranties may be prorated
    • Less resale value    		 • Higher initial cost
    • Limited shapes, sizes and designs (no wider than 16′)
    • Repairs on coloured finishes may not match    		 • Most expensive to build 
    • Requires more maintenance
    • Needs more chemicals and pump run time (using more electricity) for sanitation 

    Building an “outdoor living room” to go with your pool

    If you want your pool to be the centrepiece of an outdoor living oasis, you may want extras like fire pits, tables, a cabana, a roof or other covering for your patio area, an outdoor kitchen space or a bar. These items aren’t included in standard pool packages, and their costs can differ greatly among pool contractors.  

    Pool decking, water features and landscaping

    The pool decking is the material that covers the ground around the pool. It’s sometimes referred to as landscaping, along with the trees, flowers or shrubs around your pool area, and it might be as expensive as the pool itself—maybe even more.

    Marc Luff, co-owner of Betz Pools in Stouffville, Ont., notes that, on average, his firm charges $30 to $35 per square foot for premium interlocking stones, while imported natural stone can run about $40 to $50 per square foot. Flagstone laid on concrete is about $55 to $65 per square foot, and natural Canadian dimensional stone is $75 to $95 per square foot. 

    Decking prices vary among pool and landscaping companies, so these prices are only examples of what you might pay. You may be surprised that wood decks are the priciest option. That’s because wood on its own rots quickly from the pool water, and therefore needs poured concrete installed underneath. A wood deck made with cedar or low-end pressure-treated woods will set you back $50 per square foot, while premium woods and premium wood composites will run you $75 to $90 per square foot.

    Water features like waterfalls and fountains create a zen atmosphere, but even a small one can add around $5,000 or more to your total cost, depending on the materials you choose. 

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    Jackie Gillard

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  • Paying high home insurance prices in Florida? Here’s how experts say you can save some money

    Paying high home insurance prices in Florida? Here’s how experts say you can save some money

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    Hurricane season starts June 1, but Karen Harris’ current home insurance policy won’t cover her house near downtown Orlando beyond the first month of what’s shaping up to be a busy season. “I got my notice last fall that Farmers would be dropping me at the end of this term, so July, I’ll be out of luck,” Harris said. Her situation, unfortunately, is not uncommon for Central Florida homeowners who have been navigating the state’s home insurance crisis for more than four years.”It’s getting to where people are going to not have insurance or have to move,” Harris said. Although WESH 2 Investigates has reported this year on some promising trends like fewer citizens policies and more insurance companies operating in Florida, homeowners across the state are still paying about four times more than the national average to insure their homes.In the Orlando area, Insurify estimates that the average homeowner pays $5,700 a year and could spend more than $6,000 by the end of the year. For years, industry experts said Florida homeowners could save money on their premiums by shopping around and comparing policies, but there are other ways to reduce costs. Chase Gardner is Insurify’s data insights manager and says homeowners can save money by making improvements to strengthen their homes against severe weather. “Insurance companies will see that, and they will recognize that that makes your home more resistant to storm damage and they should give you a discount on your premium for having those features in place,” Gardner said. Not only could home improvements help save you money on your insurance premium, but you could get money from the state to make those changes.Under the My Safe Florida Home program, homeowners can apply for a free inspection, which will detail any necessary improvements.If you make the recommended upgrade, you can then apply for a grant from the state, which covers two-thirds of the project cost up to $10,000.Raising policy deductibles may also help save money.”It’s definitely an option for homeowners who maybe feel more secure that they could raise that deductible in a way that they feel financially safe with that,” Gardner said.Until the market calms down, Harris plans to find another company to insure her home.”About six weeks out, I’ll start calling around,” she said. “I’m just going to go with the cheapest.” Have your insurance rates gone down over the past few years? WESH 2 Investigates wants to hear from you. Email Investigates@wesh.com.

    ORLANDO, Fla. —

    Hurricane season starts June 1, but Karen Harris’ current home insurance policy won’t cover her house near downtown Orlando beyond the first month of what’s shaping up to be a busy season.

    “I got my notice last fall that Farmers would be dropping me at the end of this term, so July, I’ll be out of luck,” Harris said.

    Her situation, unfortunately, is not uncommon for Central Florida homeowners who have been navigating the state’s home insurance crisis for more than four years.

    “It’s getting to where people are going to not have insurance or have to move,” Harris said.

    Although WESH 2 Investigates has reported this year on some promising trends like fewer citizens policies and more insurance companies operating in Florida, homeowners across the state are still paying about four times more than the national average to insure their homes.

    In the Orlando area, Insurify estimates that the average homeowner pays $5,700 a year and could spend more than $6,000 by the end of the year.

    For years, industry experts said Florida homeowners could save money on their premiums by shopping around and comparing policies, but there are other ways to reduce costs.

    Chase Gardner is Insurify’s data insights manager and says homeowners can save money by making improvements to strengthen their homes against severe weather.

    “Insurance companies will see that, and they will recognize that that makes your home more resistant to storm damage and they should give you a discount on your premium for having those features in place,” Gardner said.

    Not only could home improvements help save you money on your insurance premium, but you could get money from the state to make those changes.

    Under the My Safe Florida Home program, homeowners can apply for a free inspection, which will detail any necessary improvements.

    If you make the recommended upgrade, you can then apply for a grant from the state, which covers two-thirds of the project cost up to $10,000.

    Raising policy deductibles may also help save money.

    “It’s definitely an option for homeowners who maybe feel more secure that they could raise that deductible in a way that they feel financially safe with that,” Gardner said.

    Until the market calms down, Harris plans to find another company to insure her home.

    “About six weeks out, I’ll start calling around,” she said. “I’m just going to go with the cheapest.”

    Have your insurance rates gone down over the past few years? WESH 2 Investigates wants to hear from you. Email Investigates@wesh.com.

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  • Alberta wildfires’ effects on tourism in Canada – MoneySense

    Alberta wildfires’ effects on tourism in Canada – MoneySense

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    “We’re already hearing people question whether it’s a good summer to come (to the Okanagan),” Ballingall said. “You can never out-market the news.”

    Canada’s PR issue with the wildfires

    Marsha Walden, CEO of tourism marketing Crown corporation Destination Canada, said last year’s headline-grabbing fire season—as well as the fires currently raging in Western Canada—have an impact on people’s perception of this country. But she said her organization’s own research shows only one in 10 potential visitors to Canada will consider completely cancelling a trip due to wildfire activity.

    “Most will adjust their itinerary or their timing,” she said. “So we have seen short-term dips in visitation… but people still want to take their holiday.”

    Stavros Karlos, with the Tourism Industry Association of Alberta, said increasing incidences of wildfire and smoke across the country are a huge concern to the sector as a whole. 

    He said it’s important that tourism businesses have access to up-to-the-minute, accurate information about wildfire activity and air quality so that they can cancel events, change their hours, or move activities indoors if necessary.

    “In some cases, operators may have the opportunity to still provide an experience, albeit somewhat modified,” Karlos said. While a final tally hasn’t been completed, last summer’s wildfires likely cost B.C.’s Okanagan region millions of dollars in lost tourism revenues, said Ellen Walker-Matthews, CEO of the Thompson Okanagan Tourism Association.

    What makes wildfire so challenging from a planning perspective is its sporadic nature, Walker-Matthews said. Smoke, for example, can shift rapidly on changing winds, affecting one community one day and one 1,000 kilometres away the next.

    “We’re just trying to really promote what we have and make sure that people know what the real-time, actual situation is,” said Walker-Matthews, adding the long weekend weather forecast for the Okanagan this year is “beautiful… spectacular” with no fire activity in sight. ”There’s lots of things to see and do, and I think as long as we just communicate out the facts accurately, we’ll see tourism continue to be strong.”

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    The Canadian Press

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  • Everything you need to know about filing a car insurance claim

    Everything you need to know about filing a car insurance claim

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    A depressed adolescent who was texting their best friend while driving ran a red light and collided with your vehicle. While you were away on vacation, someone broke into your flat and took a lot of your belongings. Your living room was inundated when your washing machine malfunctioned. However, that is the purpose of insurance, and having the appropriate policies in place shields you from financial collapse in the event of the unimaginable. Also, depending on the type of damage you’re dealing with, submitting an insurance claim could help lessen your financial burden.

    What Is Insurance Claim

    A formal request for reimbursement for repairs and other costs resulting from a policy event (such as a vehicle accident or a home burglary) that is covered by your insurance is made to your insurance company when you file an insurance claim. The insurance company will typically send an insurance adjuster to look into the incident after you’ve filed all the necessary documentation for the car insurance claim process to begin. You will subsequently get a payment for the amount of your losses in the mail if the claim is verified and accepted. The Insurance Information Institute estimates that one in every twenty homeowners who are insured makes a claim each year. Additionally, as more and more people drive, the number of auto insurance claims is growing as well. In 2017, almost 6% of all drivers with collision coverage made a claim. That means that if you haven’t filed a claim yet, you most likely will in the future!

    When to File It

    Should I file or not file? Maybe you never had to deal with insurance claims, but following an accident, that is the question we should pose. And it depends, is the response. Generally speaking, it’s not worth the bother to file a claim for a very modest payout, if you get one at all, if your damages are less than your deductible or only a few hundred beyond it. So bear in mind to look after some mistakes before buying a new car’s insurance. It’s also critical to keep in mind that your insurance provider may decide to increase your premiums if you file a claim. Yes, even in cases where the weather is beyond your control or the other motorist was at fault. In some cases, there’s even a potential they’ll cancel your policy. Suppose your car hits a tree by accident. Your collision policy has a $1,000 deductible, therefore the cost of fixing your automobile would be $1,200. For a $200 insurance reimbursement and increased insurance rates, is it worth going through the insurance claim process? Most likely not. If so, it would be wiser for you to use your emergency fund, which is intended for just that—to pay for the repairs. You ought to register a claim as soon as you begin to experience financial hardship. Here are three particular situations where you ought to give submitting a claim serious consideration:

    Injury

    Should an automobile collision occur and injuries occur to you, the other driver, or any passenger in either vehicle, you will automatically need to submit a claim.

    Who Is at Fault

    There is perhaps some misunderstanding over who is at fault for an incident. The insurance firms for both parties will then be left to resolve the matter.

    Big Damage

    You may be looking at thousands in damages if your car is totally devastated. Those are some very substantial expenses that you most likely won’t be able to pay. Making a claim makes sense, then.

    Since every case is unique, it’s crucial to speak with an agent from your insurance provider or an independent insurance broker to help you assess the benefits and drawbacks of submitting a claim.

    How to File It

    Let’s imagine that your car was just involved in a severe collision and that the front end is now smashed in like a shattered accordion. Thankfully, you’re not hurt, but it appears that your automobile will most likely be completely destroyed, so you’ll need to make an insurance claim.

    What precisely do you do? We appreciate you asking! The following are crucial actions you should take to submit an insurance claim.

    Call the Police

    Don’t just stand there if there has been serious damage, an accident has resulted in injuries, or a crime has been committed. Get assistance by dialing 911! A police record isn’t required to file an insurance claim, but having one doesn’t harm either.

    A police report will include details that will simplify the process of filing an insurance claim as well as a detailed account of what transpired at the crime scene or during the accident.

    Information

    It’s time to gather information from all persons involved in the collision and record as much information as you can from the scene. Consider it similar to a treasure hunt. Ensure that you receive the following: if at all feasible, include the other driver(s)’ name, address, phone number, and a picture of their driver’s license, policy numbers for insurance, all involved vehicles’ years, make, models, license plate numbers, and images of the mishap taken from many perspectives. Keep all doctor’s notes, hospital bills, and other records you receive for the treatment of your accident-related injuries if you’re harmed and need medical attention.

    How about claims from homeowners insurance? Make a list of the goods that were taken or destroyed during a break-in, or take pictures of the damage done to your house. Additionally, save your receipts as evidence of expenditure if you must stay at a hotel while your home is being repaired.

    Call Insurance Company

    After you and any other accident victims are safe, contact an insurance company representative to find out what more you’ll need to submit a claim. Your agent can provide you with the guidance you require because they are well-versed in the nuances of the claims procedure.

    The insurance company may dispatch an insurance adjuster to look into the accident and the damage after you make your claim. Consider an adjuster to be the insurance industry’s man who is saving your day. To determine the true cause of the incident, the insurance adjuster will review all available information during the investigation. The adjuster will recommend to the insurance company the amount of money it should pay for the loss after figuring out what caused the accident.

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    Gadgets Magazine 11

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  • Upscale Westside L.A. neighborhoods hit hard by State Farm home insurance cancellations

    Upscale Westside L.A. neighborhoods hit hard by State Farm home insurance cancellations

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    Thousands of Californians who won’t see their home insurance renewed by State Farm this summer are homeowners in Los Angeles County, with some upscale Westside neighborhoods hit hard, according to the insurer’s recent filings with the Department of Insurance.

    A majority of the insurer’s customers in neighborhoods in West Los Angeles as well as in or near the Santa Monica Mountains including Bel-Air, Pacific Palisades and Woodland Hills are going to lose their coverage.

    The State Farm move affects some of the county’s toniest neighborhoods — adding another layer of expense and financial risk for homeowners in areas that were already costly and imperiled by wildfires. Older homeowners and those with comparatively lower incomes who bought when housing was much cheaper could be hard hit.

    Last month, State Farm — the largest home insurance provider in California — said it would drop 72,000 property policies across the state amid a home insurance crisis. Of those, about 30,000 are home insurance policies.

    Denise Hardin, president of State Farm, explained the company’s decision in a March 20 letter to Insurance Commissioner Ricardo Lara, stating that rate hikes that were recently approved by the Department of Insurance amid high inflation would be insufficient to restore the company’s financial strength.

    “We must now take action to reduce our overall exposure to be more commensurate with the capital on hand to cover such exposure, as most insurers in California have already done,” she wrote. “We have been reluctant to take this step, recognizing how difficult it will be for impacted policyholders, in addition to our independent contractor agents who are small business owners and employers in their local California communities.

    “A financial failure of [State Farm] will detrimentally impact the entire market,” Hardin added, “an outcome we are all trying to avoid.”

    The letter also included several pages of ZIP Codes and the number of homeowners who would lose their coverage this summer.

    In Pacific Palisades, according to the letter, 69.4% of the 2,342 policyholders — or about 1,600 — will lose coverage. In Brentwood, 61.5% of State Farm’s 2,114 customers there will lose their policies, or about 1,300 non-renewals.

    Of the 1,805 policyholders in Woodland Hills, 60% — or about 1,090 — won’t be renewed, while in Bel-Air, 67% of 987 customers, about 660 customers, will be affected,

    Orinda in Contra Costa County and Los Gatos in Santa Clara County also will see a high number of policyholders lose coverage.

    As part of its assessment, the insurer looked at communities in areas prone to wildfires as well as those at risk of fires following an earthquake, which included communities such as Beverly Hills and Westwood.

    Thelma Waxman, president of the Brentwood Homeowners Assn., whose 1,200 members own about 4,000 properties, said it had been a stressful time for members, and for residents living near high-risk fire zones.

    Losing State Farm coverage “is the No. 1 topic of discussion” among association members, she said. “Everybody is nervous.”

    Last year, the association created its first California Fire Safety Council and worked closely with My Safe L.A., a nonprofit providing fire and safety education, as well as the Los Angeles Fire Department in an attempt to reduce fire risks in the area.

    Waxman said the formation of the safety council was partly in response to insurance companies dropping policyholders in the state.

    “At first we thought we could get a discount,” she said, “but then it became about trying to keep our policies.”

    Waxman said she’d been urging residents who will lose their home insurance with State Farm to start shopping now for a new home insurance policy as it’s difficult to find insurers writing policies in the state.

    State Farm said those losing their policies would be notified between July 3 and Aug. 20.

    State Assemblywoman Jacqui Irwin (D-Thousand Oaks), whose district includes many of the affected neighborhoods, expressed concern but hoped that the state could end the crisis by altering regulations to encourage insurers to “return to the business of writing policies for Californians and their properties.”

    Insurance companies have cited high inflation, catastrophe exposure, the cost of reinsurance (a type of insurance for insurance companies) and the limitations posed by decades-old insurance regulations as reasons for scaling back policies in the state.

    Left with no other choice, a number of Californians have turned to the FAIR Plan as a last resort. Funded by the insurers doing business in California, the Fair Access to Insurance Requirement plan provides more limited coverage as a fallback for property owners unable to find conventional policies they can afford.

    But the enrollment surge is putting a financial strain on the state insurer as it faces a potential loss of $311 billion, up from $50 billion in 2018.

    State officials said the FAIR Plan had a surplus of $200 million and was at risk of insolvency should a catastrophic event occur.

    Lara has proposed a set of new rules that would allow insurers to raise rates to cover reinsurance costs and projected losses from catastrophic fires, but also require that they provide coverage for more homes in California’s canyons and hills.

    The proposals, which aim to move people off the FAIR Plan and slow the increase in premiums, have won support from insurance industry trade groups and some consumer groups, although some consumer advocates, such as Consumer Watchdog, have criticized the proposed rules.

    In the letter to Lara, Hardin said State Farm would continue to cooperate with the state in finding a resolution to the home insurance crisis.

    “We are acutely aware of the political challenges that the actions needed to improve [State Farm’s] financial position pose to broader reform efforts,” she wrote. “Please know that we have an ongoing desire and commitment to collaborate with you and your staff, as well as the Governor’s office, to achieve these reforms as quickly as possible.”

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    Ruben Vives

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  • Buying home insurance in Canada: A beginner’s guide – MoneySense

    Buying home insurance in Canada: A beginner’s guide – MoneySense

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    By Renée Sylvestre-Williams on February 23, 2024
    Estimated reading time: 8 minutes

    Home insurance is a form of property and casualty insurance that protects your home and personal belongings from damage or loss. It’s designed to cover events that are expected and predictable. This means it doesn’t offer coverage for regular home maintenance costs or even major expenses that are part and parcel of home ownership—such as replacing the shingles on your aging roof. In this guide, we’ll cover everything you could want to know about home insurance in Canada, from how it works to what it covers and how much it costs.

    How does home insurance work?

    When you purchase a home insurance policy, you agree to make regular payments, called premiums. In exchange, your insurance company assumes certain risks and agrees to pay if you experience any of the losses covered in your policy. 

    The premiums you pay go into a large pool managed by the insurer, which is used to cover any claims made by policyholders. This is how insurance companies are capable of covering huge losses that would be financially devastating to individuals. 

    Watch: Do you Need Insurance?

    What does home insurance cover?

    You’ll want to read your contract closely, because your home insurance policy only covers “named perils”—the specific damages or losses outlined within it—unless you purchase comprehensive home insurance.

    Common named perils can include: 

    • Damage or loss to your home
    • Theft or damage to your personal belongings
    • Damage or injury to visitors to your home or property 
    • Accidental damage caused to another person’s property
    • Personal property stolen from your vehicle

    Home insurance is a service to help with sudden, unpredictable events. It isn’t meant to cover every instance of damage or loss to your home. That’s why it’s important to understand what kind of home insurance policy you’re getting. In Canada, there are three broad categories: 

    • Basic coverage comes with a preset list of things that will be covered, like fire and smoke damage, theft and injury. It will cover only what’s listed in the policy.
    • Broad coverage includes basic coverage with some extras, like coverage for your items and home structure. 
    • Comprehensive coverage flips the script on named perils; instead of telling you what’s covered, it will tell you what’s not covered. Unless an event is listed as not covered in a comprehensive policy, the assumption is that it is. 

    You can also choose to add endorsements to your policy. Endorsements are amendments or changes to your insurance policy used to add optional coverages to your policy, for an extra cost, or to waive certain coverages that are typically included. 

    Read more: What does home insurance cover?

    What doesn’t home insurance cover?

    There are certain things standard home insurance won’t cover. Some events that are routinely left out of standard policies include: 

    • Overland flooding
    • Sewage backup 
    • Landslides
    • Avalanches
    • Earthquakes
    • Tsunamis
    • Damage to or caused by your water pipes in certain circumstances. It’s not guaranteed for a reason: The coverage may be voided if you leave your home unattended for too long. However, you can maintain coverage by having someone check up on your place while you’re away.
    • Damage caused to vacant properties. If your home is considered vacant—that is, not occupied for 30 days or more—and damage occurs, then you may not be covered. 
    • Poor maintenance. If you’ve neglected your home (for example, you’ve ignored damage to your foundation or a leaky pipe) then your home insurance claim could be denied. 
    • Valuables. Home insurance will cover up to a certain amount for valuables, usually no more than $10,000. If you have a significant jewellery or art collection, laptops, phones, stamps, coins, toys, etc., you may want to buy additional coverage. 

    These are standard exclusions, but you may be able to purchase optional add-on coverage, known as endorsements, for risks that are not covered by your policy. 

    How to calculate the value of your belongings

    Whatever you do, don’t come up with a number off the top of your head. Take a systematic approach to calculating the value of your belongings; otherwise, you may undervalue how much your stuff is actually worth. 

    Take the time to record a list of your belongings, backed up with written and visual documentation (cell phone pics and receipts). Next, figure out how much it would cost to replace these items if they were lost or destroyed today, and add up the total. Keep a copy of all your documentation in a safe place outside of your home, such as a safety deposit box at your bank. 

    How much coverage do you need?

    It depends on your home, its location and your possessions. Most home insurance providers offer calculators to help you figure out how much coverage you’ll need. 

    How much does home insurance cost?

    No two insurance policies are the same, and not surprisingly, their costs vary, too. But according to Ratehub.ca (whose parent company, Ratehub Inc., also owns MoneySense), the average annual cost of home insurance in Canada is $960. People in Ontario pay an average of $1,250, while those in Alberta pay $1,000, and those in Newfoundland and Labrador pay $780.

    Insurance companies consider several factors when calculating home insurance costs, including: 

    • The impacts of climate change on the type and frequency of claims
    • The assets contained in the home being insured
    • The location of the home 
    • Renovations made to the property

    How to buy home insurance in Canada

    To purchase a home insurance policy, contact an insurance broker, provider or financial institution that offers P&C insurance. They will provide you with a quote, based on the amount and types of coverage you need, as well your personal profile, such as where you live and the type of dwelling you need covered. 

    Before taking this step, consider using an online comparison site to get an overview of the best home insurance quotes available to you. These sites allow you to quickly compare offers from many providers for free.

    Read more: How to compare home insurance policies.

    How to save on home insurance

    There are several things you can do to save on home insurance. Here are a few: 

    • Bundle your home and auto insurance. This grouping is common, because most people have both and it’s a good way to save money. 
    • Upgrade your home. Install a security system, repair your pipes, electrical system and roof and you could get a good deal, because the risk of damage will be minimized. 
    • Absorb a higher deductible. Instead of going for the $500 deductible, go for the $1,000 (if you can afford to pay out of pocket). Reducing the number of smaller claims can net you savings.
    • Pay your annual deductible in a lump sum instead of monthly.
    • Shop around.
    • Have a good credit score. Letting insurers check it could get you a better deal.
    • Be loyal. It’s no guarantee but insurers are more likely to reward loyalty over time.

    Read more: How to save on home insurance.

    How to tell if your home insurance settlement is fair 

    Home insurance settlements are not meant to improve the state of the home compared to before the damage occurred. There is a formula insurers use when calculating a home insurance settlement, and it factors in things like tax (HST) and depreciation. 

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    Frequently asked questions about home insurance

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    Renée Sylvestre-Williams

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  • What to do if you’re a victim of bank account or credit card fraud – MoneySense

    What to do if you’re a victim of bank account or credit card fraud – MoneySense

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    Interac e-Transfer is generally a safe way to send money in Canada. In fact, “for every $100 spent across the Interac Debit and e-Transfer networks, less than $0.02 was lost to fraud [in 2021],” according to Interac.

    Regardless, fraud happens. E-Transfer fraudsters generally use text or email channels to exploit victims. Some examples of fraud in Canada include:

    • Tax refund or government relief scams
      A fraudulent “deposit” of an income tax refund or government financial support is sent to access banking information.
    • Lottery scams
      The fraudster requests the provision of sensitive information or a prepayment of an administration fee.
    • Rental scams
      Someone pretends to be collecting rent on behalf of your landlord or offers a nice apartment for rent at a low price and requests a deposit to secure it.
    • Fraudulent sales
      Typically through an online marketplace, someone may request prepayment for a hard-to-find or rare item and then never send it to the buyer.
    • Relationship scams
      Someone impersonates a family member, coworker or romantic interest and asks for money for an emergency.
    • Work from home ads
      An applicant is asked to prepay for supplies, training or some other work-related expense for a fake job.
    • Hacking an email account
      Scammers find emails containing security questions and answers, and then intercept Interac e-Transfers and deposit the funds to their own accounts.

    If the fraudsters were able to send transfers directly from your account, William, it sounds like they were able to hack into your online banking. This may have been from a phishing text, email or website that tricked you into entering your bank login details and allowed the fraudsters to access your account afterwards.

    How do you report bank account fraud?

    According to the Canadian Anti-Fraud Centre (CAFC), the first things to do when you are a victim of fraud are:

    1. Contact your financial institutions
      Put flags on all of your accounts, even at other financial institutions. You should change your passwords.
    2. Contact the police
      Report the incident to the police and update them on any further developments.
    3. Report the incident
      Contact Canada’s two credit bureaus: TransUnion and Equifax. You can consider credit monitoring that reports suspicious credit activity to you. You should also contact the CAFC by phone at 1-888-495-8501 or using its online Fraud Reporting System.

    What do banks consider unauthorized transactions?

    It sounds like you have done all the right things so far, William. As far as the bank’s responsibility, each financial institution may have different definitions of what constitutes an unauthorized transaction. You have to check your debit card or credit card agreements to see the terms, which could include restrictions on how long after the transaction occurred that the financial institution will take responsibility. That may be where you are running into trouble.

    According to the Financial Consumer Agency of Canada (FCAC), you may be responsible for losses in cases when you:

    • Use your date of birth or telephone number as your PIN.
    • Shared your card’s PIN with someone, including a family member.
    • Keep a written record of the PIN “in proximity to” the card, including writing your PIN on the back of the card.
    • Did not report your card as being lost or stolen in the amount of time specified in your card agreement.
    • Refuse to cooperate in an investigation of unauthorized use.
    • Made fraudulent deposits with your card.
    • Did not take the necessary steps to protect your pin.

    If you haven’t had luck dealing with your bank directly, William, you can contact the Ombudsman for Banking Services and Investments at 1-888-451-4519 or [email protected].

    You could speak with a bank fraud litigation lawyer to see if they can help. An initial consult might confirm whether you have a case or if there are further steps you can take.

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    Jason Heath, CFP

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  • Renting vs. owning: Can you be financially secure without buying a home? – MoneySense

    Renting vs. owning: Can you be financially secure without buying a home? – MoneySense

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    I don’t expect real estate prices to rise at the same 6.75% rate we have seen over the past 10 years, so instead, let’s say prices rise at 4% per year. Some people may think that number is high, while others may think it is low. But if you look back at U.S. residential real estate appreciation since 1890, which looks to be similar here in Canada, prices have only risen by a bit more than the rate of inflation, so even 4% may be generous. Nevertheless, assuming 4% growth is correct, the condo would be worth $740,122 after 10 years. Home equity, representing the condo’s value minus the mortgage balance, would be $471,613.

    What if someone could rent the same $500,000 condo for $2,000 per month (a number that might seem high or low depending on where you live)? Compared to making monthly mortgage payments on that same property, the renter would be saving $559 per month. Their rent would rise over time, say, at 2% per year, so the $599 per month of savings would decrease over time.

    Now, let’s say they invested their initial $100,000 (the amount that would have been used on a down payment) and $559 a month (a number that would decrease as rent increased) into a tax-free savings account (TFSA). If they earned 4% per year on their investment, they would have $204,396 after 10 years. The buyer, with $471,613 of home equity, is clearly better off than the renter, right?

    The problem here is you cannot just compare the mortgage payment to the monthly rent. Owning has other incremental costs that might include:

    Property tax: $200 monthly (not ap
    Condo insurance: $10 or more per month, compared to tenant insurance
    Condo fees or repairs: $500 more per month, compared to renting

    Property tax rates can vary significantly depending on where you live. And condo fees and repairs can vary, depending on the age and amenities in the building. But if we added another $710 per month from the categories above to the renter’s monthly investment deposits, the renter would have $319,117 accumulated after 10 years. The same tax-free TFSA return of 4% is assumed, perhaps in their spouse’s TFSA.

    The owner would still have 471,613 in home equity. So, owning is still better than renting, right?

    Let’s not forget there are costs to buy and sell real estate. It could cost $10,000 in land transfer tax, legal fees and other costs to buy, and another $40,000 to sell after 10 years. If the renter added these amounts to their investments, they would be at $373,919. The buyer is still ahead of the renter with $471,613, but as you can see, the gap is closer.

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    Jason Heath, CFP

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  • Climate Change Pushes Up Home Insurance Premiums

    Climate Change Pushes Up Home Insurance Premiums

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    Homeowners renewing their insurance are seeing their premiums increase more than 20% according to a recent study, making housing even more expensive for a growing number of Americans.

    The study, conducted by Policygenius, found that Florida experienced the largest jump with premiums increasing by 35%. The steep increases in homeowner’s insurance costs contribute to the already intractable housing affordability crisis, as homeowners must allocate more of their incomes to their monthly housing costs.

    Natural Disaster Risk Drives Up Insurance Costs

    When State Farm stopped offering new policies in California, they blamed wildfire risk and construction costs for their inability to operate profitably in the Golden State. Farmers Insurance, which also pulled out of California, pointed to hurricane risk as an explanation for exiting Florida too. As climate change increases the severity and frequency of natural disasters, more homeowners and homebuyers will likely lose coverage or face increased insurance costs.

    Homebuyers Prefer Homes With Lower Climate Risks

    Homes that experience the largest jumps in insurance costs will likely experience lower home price appreciation than comparable homes with stable premiums. Homes where wildfire, flood, storm, or other natural disaster risks are increasing, will become less attractive to buyers who prefer homes with lower climate risks and insurance costs. A Redfin
    RDFN
     experiment found that homebuyers with access to flood risk data make offers on homes with lower risk. Redfin users who viewed properties with severe and/or extreme flood risk before the experiment bid on homes with 54% less risk after receiving access to risk data than users who were not shown the risk data. Redfin customers in flood-prone Cape Coral, Florida, Houston, Texas, and Baton Rouge, Louisiana, were the most likely to click into the flood-risk portion of home listings.

    Housing Affordability Will Worsen Without Government Action

    Although homebuyers prefer homes not at risk of natural disasters, affordability remains the first consideration for homebuyers. This explains why homebuyers from expensive places like New York and Los Angeles continue to move to disaster-prone Florida, which offer relatively affordable homes and low taxes. Over the last two years, on net, approximately 60,000 relocated to Lee County, FL, which contains Fort Myers and Cape Coral, and was devastated by Hurricane Ian last September. But now that Florida insurance premium prices have increased 35% in just one year, Florida cities like Cape Coral may become a less attractive location for homebuyers.

    We already have a shortage of affordable housing in the United States, and rising home insurance costs will worsen the problem. Local and state governments must prioritize building resilient housing in places with low disaster risks and insurance costs. Delaying action will only make the consequences of climate change costlier.

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    Daryl Fairweather, Contributor

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