Any insurance professional will tell you there’s no easy answer for cheap and full coverage, as it’s really about finding the best plan for your needs. But it can be done. You have to do your homework. Shop around. Compare quotes. Luckily, there are a few hard and fast rules to keep in mind when comparing home insurance quotes.
How to compare types of home insurance policies
While you don’t need home insurance by law, as you do with car insurance, your mortgage lender or landlord will often require it. Home insurance experts will tell you that the key to getting the best plan in terms of cost and coverage is to shop around and compare policy offerings from company to company. In your search, these are the main kinds of coverage you’ll come across:
Comprehensive: This is the most inclusive type of policy, covering sudden and accidental occurrences involving buildings and personal property, as well as liability. You would be covered for everything, except for the exclusions specified in your policy.
Broad: Considered a middle-tier offering between basic and comprehensive coverage, broad policies come with comprehensive coverage on certain items, such as the building, but also with more exclusions for your home’s contents.
Basic: Also called “named perils,” these policies cover only the basic perils that are named in the policy, such as fire, wind and theft. They are more affordable than broad and comprehensive options.
No frills: This type of policy offers the least amount of coverage and is designed for homes that don’t meet normal standards for insurability. For example, if your home has structural problems, you may need this type of insurance until you make the necessary fixes and can qualify for a different type of coverage.
And, if you own a rental property, you should also look into landlord insurance to protect against damage and accidents involving tenants or their guests.
How to compare home insurance quotes
Considering all policies aren’t the same, getting an accurate comparison between providers can be tricky. Tara Laidman, vice-president of property & casualty business operations at The Co-operators, says common differences to watch for include the specific perils covered, the limitations on big-ticket items such as jewellery, and the additional coverages included in the policy, like identity fraud.
Tips for comparison shopping for home insurance policies
- Provide consistent information to each insurance company. This will make comparing quotes easier. Be truthful and don’t omit information—Laidman warns that this could lead to a claim denial for misrepresentation.
- Asking for the same type of policy and coverage amount (see above). Discuss with your insurance broker or provider what is and what isn’t covered in the proposed policy. It’s imperative to know this in advance, so there are no surprises (or denials) if and when you make a claim.
- Pay attention to limits on the building and your personal property (such as jewellery and electronics), detached structures and additional living expenses, adds Laidman.
What else affects the cost of home insurance?
When comparing home insurance quotes, you should consider a number of additional factors, including replacement cost or actual cash value (ACV) coverage.
