How home insurance works in British Columbia

If you're a driver, you know that if you want to buy a car and hit the road, it's required that you first buy auto insurance. B.C. home insurance, on the other hand, isn't actually mandatory. That said, many banks or mortgage holders may have their own rules when it comes to this. These institutions may require that you show evidence of home insurance before they lend you any funds to purchase new digs.
 

Why you need home insurance in British Columbia

Regardless of whether B.C. home insurance is mandatory, buying it’s still a good idea. We can’t control the future. If your home was to experience serious damage, you’ll want to be covered. For many Canadians, a home is the biggest investment they’ll make. You don’t want to lose that investment due to unforeseen circumstances that you could have protected yourself against.

In B.C., you’ll want to consider coverage for fire and smoke, bad weather events like wind storms and flooding, crime and vandalism, water damage—such as a burst pipe—and personality liability. The latter is important for accidental damage or injury caused.

Special items you keep in the home, such as jewellery, watches, bicycles, and expensive technology like laptops, can also be eligible for limited coverage.

There are some limitations, however. For example, home insurance doesn’t typically cater to self-employed Canadians who work from home. You may have to buy home-based business insurance coverage for that.
 

What types of home insurance are available in British Columbia?

In Canada, homeowners can opt for four different types of home insurance. We break them down here:

Comprehensive:

If you want the best coverage possible, choose comprehensive. This is also known as a “special” or “all-perils” policy. In insurance speak, a peril means an event that could result in damage to your home or belongings. So, with a comprehensive policy, you're covered for all types of things that could happen unless your insurer specifically excludes those items in your policy.

Basic coverage/named perils:

Whereas a comprehensive policy will cover all your perils, a basic coverage policy will only cover perils that you specifically identify. For example, if you live in a neighbourhood that experiences a higher degree of theft, you may look to specify theft as one of your chosen perils.

Broad coverage:

You might want to select broad coverage if you're looking for something in-between a comprehensive and basic policy. You'll be covered on big-ticket items, such as if a fire damaged your building, but you'll have to name items inside the home if you want those covered.

No frills coverage:

Insurance companies will offer no-frills coverage if you've bought a property that doesn't meet basic insurance standards. That might mean that are physical problems with your home that insurance companies can bet will have a high chance of leading to issues. You'll want to address these problems to get better coverage.

Tips for finding cheap B.C. home insurance

Try bundling:

If you also own a car, ask your home insurance company for a quote. Insurance companies may be able to "bundle” your home and auto insurance together for a lower price.

Shop around and for discounts:

Don't be shy in asking your broker or insurance agent how you can reduce costs. You may find you're eligible for discounts and promotions that you hadn't considered. For example, as a college or university alumni, you may qualify for a group discount.

You'll also want to shop the market to get the best deal possible and find cheap BC home insurance. Each insurance company proposes its own rates on home insurance. They'll be different from one shop to the next.

Explore a higher deductible: 

Did you know that the higher your deductible, the lower your premium will be? A deductible is an amount you pay before your insurer awards your benefit. It's a way of sharing risk with your insurance provider. For example, if you can claim a loss of $5,000 and the deductible is $1,000, you'll get reimbursed for $4,000.

However, you'll need to assess your own financial risk before jumping to lower your deductible. You don't want to find yourself filing a claim but unable to cover the cost of the deductible. Only make this decision if you believe you can afford it.

Install a home security system:

Studies show that burglars are more inclined to avoid homes that obviously have a home monitoring system and that even if burglars do break in, the amount of property stolen is less than what it would have been without a system.

Since break-ins are expensive for insurers, they want to avoid them when possible. Buying a home security system demonstrates that you're proactive about reducing risk. As a result, it makes sense for them to offer a discount.

Heating system: 

If you opt for a newer heating system, you may also be able to gain an additional discount.

Notify when you renovate:

Here is a tip that might sound counterproductive. If you are doing home renovations, let your insurance company know. While they might bump up your premium, it's going to ensure you don't compromise your coverage.

You don't want to make a mistake only to discover that your home insurance policy won't cover you in the event of a loss.