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Why the Least Expensive Insurance Option Isn’t Always the Best Choice

by admin

Living in Vancouver is expensive and for those lucky enough to break into the housing market, finding ways to save money is often at the forefront of their minds. There are many ways to cut costs, you can eat out less, bring coffee from home more often, and shop on sale when possible, however one area that you should avoid skimping on is home insurance. Your home is likely to be the single largest investment of your life and making sure it is protected should be a priority. But how do you gauge whether you are sufficiently insured, under insured, or possibly even paying too much for insurance products you don’t really need? Let’s dig in.

Home insurance in North Vancouver, the North shore, and the surrounding areas is extremely competitive and with the average home price just north of 1.2 million, there is a lot of money on the line. Consumers can sometimes get confused when selecting the right coverage; in the midst of a tremendous amount of technical jargon and differing rates and coverage, the lowest number is often chosen. While this may seem like a financial win in the moment, if your home and its contents are not adequately covered, you are leaving yourself unprotected.

Basic Insurance

Basic insurance is usually the minimum required coverage by financial lenders if you are purchasing your home with a mortgage. This type of policy covers only the perils specifically stated in your policy and nothing else. For example, you may be covered for fire damage, but if a water pipe bursts and it’s not included in your named perils, you would not be covered for the damage. This is the cheapest option available if you are willing to carry the financial risk.

Broad

It is a mid-level product, somewhere in-between basic and comprehensive. This type of policy covers your home and its contents from damage, theft, or loss, with some exclusions. Similar to a comprehensive policy, the structure is covered against all risks except those listed under exclusions. However, like a basic policy, your contents are only covered against named perils.

Comprehensive

Comprehensive insurance is generally the most inclusive level of home insurance available, it will include coverage for the structure and all its contents from all risks other than those specifically named as exclusions. Earthquake and sewer backups are examples of optional insurance products.

Now that you have a better idea of what the standard insurance policies cover, you can decide which is right for you. If you are willing to bear some risk, a broad policy may be right for you. If you’re risk adverse, or if your home contains many big ticket items, you may prefer the peace of mind that comes with a comprehensive policy.