The world of insurance policies is confusing, especially for beginners. Perhaps most intimidating are the exclusions that come along with certain policies. It’s never nice when something happens and you have to wonder, “Is this covered?”
Home insurance is likely there to guard one of your most valuable and most expensive assets, which is why it’s important to know what is and isn’t included in your home insurance policy in Alberta.
What Does a Home Insurance Policy Do?
In short, your home insurance will provide you with financial relief in case of damage to your property or possessions, as long as the incident is covered under the policy. A policy generally has four main functions:
- Coverage for your home’s structure
- Coverage for your personal belongings
- Coverage for personal liability if you’re deemed legally responsible for damage or injury
- Coverage for any additional living expenses
Home insurance coverage in Alberta ranges, which is why it’s important to understand what’s included, what’s not, and how to ensure you get the most well-rounded policy for your investment.
Home Insurance Policy Exclusions
While your policy can cover a wide range of incidents, not everything can be covered by home insurance. So, what isn’t covered under your home insurance policy?
Types of Coverage
There are six distinct types of coverage under home insurance:
- Dwelling protection covers the structures of the home you’re living in, like the foundation or roof.
- Other structures protection covers the structures on your property that you don’t live in, like a shed or detached garage.
- Personal property protection covers your personal belongings if they’re destroyed or stolen.
- Additional living expense coverage will cover any additional costs of living while your home is repaired, such as staying in a hotel.
- Liability protection will cover costs if you’re deemed legally responsible for damage or injury.
- Medical payments cover the cost of injury treatment, no matter who is at fault.
Although it seems robust, these six types of coverage don’t necessarily cover everything; there are certain incidents that won’t be covered under your home insurance, and some of these types of coverage will have additional options you can choose to add or remove from your overall policy.
Natural Disasters and ‘Acts of God’
One commonly excluded event in policies is natural disasters or other ‘acts of God’. While most policies cover situations like fire, hail, and lightning strikes, other disasters like floods or earthquakes usually aren’t covered with a basic policy. However, it’s important to protect your home from natural disasters, which could cause a significant amount of damage and a major financial burden.
In most cases, you can choose to add extra water damage policies for these specific types of events. For example, if you live in an area that commonly floods, you may be able to secure overland water coverage to protect against overflow from nearby rivers and lakes, or from any kind of water seeping into your home’s basement or foundation. It’s important to note that water damage from sewer back ups will also not be covered, but extra coverage can also be purchased for this.
Generally, home insurance covers additional structures on your property, such as a detached garage. But what happens if your car is broken into while it’s on your property? This is where the difference between home and auto insurance can become muddled. While any damage to your car is unlikely to be covered by home insurance, many policies will cover certain personal items that were lost or damaged from within your car. However, if an object was purchased for sole use in the car, most insurance companies won’t cover it. As for the damage to your vehicle, you would need to make a claim through your auto insurance policy.
While unoccupied properties are usually covered under insurance, properties that have been vacant for over 30 days are not. What’s the difference? Unoccupied properties still have the owner’s property and belongings in them – for example, if you’re a snowbird who spends winter months in the south, your property is unoccupied, not vacant. There are certain actions snowbirds can take to ensure they are protected while they’re away.
Meanwhile, a vacant house doesn’t have any personal property like furniture in it. This often applies when landlords have to wait over a month for a new tenant to move in. Vacancy permits can be purchased if this is the case, but it will only cover malicious acts like vandalism. If your property will be vacant for any reason, it’s important to get in touch with your Edmonton insurance broker to let them know and determine your next steps.
While many valuables like jewelry and art pieces are covered under home insurance, there is a limit to the amount you can claim. The maximum amount varies from company to company, so be sure to ask your insurance broker about potential maximums. If the value of your items is beyond your insurance maximum, you can purchase additional coverage for those items.
Usually, frozen pipes are covered under your insurance policy. However, if you leave your home unattended for over four days in the winter (such as for a vacation), insurance will no longer cover frozen and burst pipes. The exception to this is if you’re having your property checked on once per day by a responsible third party.
Your home insurance policy requires that you take proper care of your home in order for coverage to apply. If you’ve had a shower leak for months and haven’t bothered to fix it, your water damage claim won’t be accepted by your insurance company. Forms of wear and tear or gradual deterioration also won’t be covered under home insurance. In a similar vein, your insurance won’t cover pest infestations. It’s up to you to keep your property maintained in order for you to qualify for insurance.
Exclusions That Can Void Your Insurance
There are a few specific regulations that can actually void your insurance if not followed correctly, which are very important to note:
- Illegal activities, whether you’re aware of them or not, can void insurance. All damage, related and unrelated to the illegal activities, will not be covered.
- If you leave your property vacant for more than 30 days, you’ll need a vacancy permit to keep the insurance up and running.
- Leaving your property unattended while you’re away can also void home insurance. Someone should be in to check on it at least every three days.
- Fraudulent claims, like starting a fire to receive coverage, results in an immediate void of your insurance.
- When starting a business from your home, updating your insurance probably isn’t the first thing you think of. However, the increased risk of business-related losses can actually void your home insurance if you don’t update it to accommodate your new business.
- Other changes may also impact your coverage, such as finishing a basement or adding new structures. If anything on your property changes, be sure to update your insurance broker.
Request an Insurance Quote from Edmonton Insurance Brokers
Navigating your way around the world of home insurance can be challenging if you don’t have experience. At Cornerstone Insurance, we’re happy to help you get the most out of your insurance, whether it’s auto insurance, home insurance, life insurance, or otherwise. Request an insurance quote so we can help you identify the ideal insurance policy for your home.