Home | Save Homepage | Budget | Investment | Loan & Planning | Taxes | Insurance | Daily life financial tips |

Home insurance

Buying a house is probably the biggest investment in our life. The problem is that a home isn't fireproof, nor entirely protected against robbery and more other bad luck. Considering this, would you have the money to replace everything you've got? Probably not, and this is why many people preffer to have a home insurance.

How does it work?

Just like any other insurance, you need to pay a certain amount of money (premiums) on a certain period of time. These factors can change from an assurance to another. That's why you need to shop for the insurance that is best for you and responds the most to your needs. Also, like any other insurance, the payments (premiums) of the many pay for the losses of a few. That means that all the insurance payments are kind of reunited together in a pool, and because there are more people contributing to the pool than people asking for claims, there is always enough money to pay the claims.

Having a home insurance is important because it protects you from having to pay out a huge amount at once. Even if most people never need to submit an insurance claim, some banks will insist you to have a home insurance. They might also ask for a proof of insurance before lending you money to buy a home.

But if you live in an appartment, a tenant insurance is to consider. It is kind of the same thing as a home insurance, but what differs is that only what you own is covered. Also, if you are responsible for any dammage on your apparment, your neihbours's or to the building itself, your tenant insurance protects you from having to pay out for these costs of your own pocket.

Tips for your home insurance

• Find the insurance that corresponds the most to your needs
• Don't be affraid to shop your insurance and to compare prizes
• Learn more about the possibilities of discount for your home insurance (being a member of a particular organization, having an alarm system,...) and about the possibility to insure both your home and your car, which might also give you a discount
• Tell your insurer about the major changes related to your home

Related links

Insurance Bureau of Canada (Home insurance section)

Document explaining Home insurance

Insurance

MPF Main Categories