The 8 Ways BC Homeowner Policies Go Wrong

By Kul Shergill, Founder & Senior Advisor · Prime Insurance, Surrey BC · Licensed since 1990

Most BC homeowners have the wrong number on at least one line of their policy — and they never find out until they file a claim. By then it is too late to fix. Here are the eight places a homeowner policy quietly goes wrong, and how to check yours before a claim does it for you.

1Your dwelling limit is the wrong number entirely

The dwelling limit is what it costs to rebuild your home from the foundation up — not its market value, and not your BC Assessment. People confuse all three constantly. Lower Mainland rebuild costs have climbed hard over the last five years; a policy set in 2019 and renewed on autopilot is very likely under-insured today. If your home costs more to rebuild than your limit covers, you absorb the gap. Check this number first, every renewal.

2You are quietly losing guaranteed replacement cost

Many BC policies offer guaranteed or extended replacement cost — the insurer rebuilds even if the cost exceeds your limit, as long as your dwelling limit is set correctly to begin with. The catch: if your dwelling limit has fallen out of step with real rebuild cost, that guarantee falls away. The feature you are paying for stops applying. This is the single most common gap we find on policies people bring in.

3Water coverage is missing one of its three parts

Water damage isn't one coverage — it's three: sewer backup, overland water, and service line. They are separate endorsements, and a policy often has one or two but not all three, at limits that haven't kept up. Given how BC water claims actually happen, all three belong on the policy, at limits that reflect your home. Read your declarations page and confirm each one by name.

4Earthquake is misunderstood — especially the deductible

In BC, earthquake is an optional endorsement, and the part people miss is the deductible. It is a percentage of your dwelling limit, not a flat dollar amount — commonly in the 10% to 20% range. On a home insured to rebuild for a million dollars, a 15% deductible is a hundred and fifty thousand dollars out of your pocket before coverage starts. Know your percentage, and know what it is in actual dollars.

5A suite was added and nobody told the insurer

Homes across Surrey and the Lower Mainland are increasingly multi-suite. Every additional household at the address changes the underwriting — the rebuild cost, the liability, the price, and sometimes whether a carrier will write the home at all. If a suite was added, or an existing one was never disclosed, the policy may not respond the way you expect. Tell the carrier before the suite is occupied, not after a loss.

6Your high-value belongings sit over the sublimits

Standard contents coverage caps certain categories — jewellery, bikes, art, cameras, tools — at internal sublimits, often just a few thousand dollars each. Scheduling an item lifts its cap to its appraised value, broadens the perils, and extends the coverage worldwide. If you own anything meaningful in those categories, it likely isn't fully covered the way the policy stands.

7Bylaw coverage is too low to rebuild to current code

An older BC home damaged in a claim has to be rebuilt to current building code, which can cost well beyond the original construction. Bylaw coverage pays that difference. It is frequently set far too low, and on an older home that gap can be tens of thousands of dollars at exactly the wrong moment.

8Your liability limit hasn't moved in a decade

Liability is the cheapest coverage on the policy to increase and the most expensive to be short on. Multi-suite homes, pools, dogs, large lots — all raise your exposure. If your limit still reads what it did ten years ago, and especially if an umbrella policy would make sense for your situation, this is worth a deliberate look rather than a default.

None of these are exotic. They are the ordinary places policies drift out of sync with the home they're meant to cover — and they stay wrong because most people never read the declarations page line by line. That reading is exactly what a broker is for.