Guide to Homeowners Insurance | Intro Real Estate

Homeowner’s insurance is one of the most overlooked aspects of a property purchase
however, it is of the utmost importance as sadly, homeowners are at risk of property damage
due to unfortunate/unforeseen circumstances.

What is Homeowners Insurance?
Homeowners insurance is a protective policy against property damage or loss caused by
fire, strong winds, vandalism and theft. Though it is not an obligation, many banks will only
grant mortgage to buyers who apply for insurance. This is to merely ensure that the bank’s
investment is protected should any of these unfortunate events occur. Note: the banks
cannot force you to utilize their service provider

There are 3 main types of homeowners insurance which include:

  • 1. Homeowners building insurance – This type of insurance provides cover for the
    building structure against accidental property loss and damage caused by fire,
    storms, or vandalism. The insurance usually covers repairs, property rebuilding and
    sometimes even hotel stay during repairs to your home.
  • 2. Home content insurance – This type of insurance provides cover for your personal
    belongings in the event that they are damaged, stolen or destroyed. This includes
    furniture, jewellery, clothing, electronics, gadgets etc. cover in the event that they are
    damaged or lost.
  • 3. Personal liability insurance – This type of insurance covers you against third party
    claims for injury incurred by visitors on your property, loss or damage of visitors’
    belongings on your property, accidental death as well as illness of visitors on your

Replacement Cost versus Cash Value
There are two types of homeowners insurance cover methods. These include:

1. Replacement Cost Policy – With this policy, the insurance provider will pay out the
amount you used to replace damaged or stolen goods. You will be required to keep
the receipt for the purchased goods as proof.

2. Cash Value Policy – With this policy, the insurance gives you a cheque payment of
the market value of your damaged or stolen good minus depreciation. The
depreciation amount is determined by the insurance provider.
Advantages of homeowners insurance:

  • Provides peace of mind
  • Provides protection for your investment
  • Provides protection for personal belongings
  • Lowers cost of repairs, even rebuilding if needed
  • Covers you against third party claims

For more property related advice, contact your trusty Intro Real Estate Agent, it’s the right

Note: the above information is a general guideline. All claims are subject to the terms
and conditions of your specific service provider.