Glossary of Terms
Actual Cash Value
Actual Cash Value means that in the event of a loss the building will be insured on a depreciated basis.
In the event of a total loss, the claims adjuster will look at the age, condition, life expectancy and resale value of the home. Those factors will be used to determine the actual cash value. You will receive the cash value at the time of the loss or the amount of insurance shown on the policy – whichever is less. In the event of a partial loss, depreciation will be applied to the settlement and you will be responsible for the difference between the actual cash (depreciated) value and the actual cost to replace.
Replacement Cost means that if you have a loss that is covered by insurance your hone would be repaired or replaced.
If the damage was not so great as to destroy the entire home, such as a small kitchen fire, the damage would be repaired. You would essentially have the old damaged area replaced with new materials.
If the damage was catastrophic, such as a fire that destroyed your entire home, it would be rebuilt. What you had before would be replaced with new. How much would you receive? You would receive the actual cost to rebuild your home or the amount of insurance that you had – whichever is less.
Guaranteed Replacement Cost
Guaranteed Replacement Cost means that if your home was totally destroyed it would be rebuilt even if the cost to do so exceeded the amount of insurance that you had.
Sewer Back-up and Overland Water Protection
Water is the new fire. Roughly 60% of all home claims are now water related. Water in the basement is a very real possibility and a very unpleasant one. There is insurance that you can purchase to protect you in the event that this happens. Insurance is available for sewer backup and sudden and accidental damage caused by the unusual and rapid accumulation of surface water, flood or ground water. As in all cases, each insurance company has their own specific wordings which take apply.
Service Line Coverage
Service Line Coverage provides you with insurance in the event that your underground lines such as your water line or sewer line are damaged. This could include damage caused by tree roots or collapse. Typically, it covers the service line from the edge of your foundation to the edge of your property line and would cover the costs associated with digging out the yard or driveway, replacing/repairing the line and re-landscaping.
Our homes now have some fairly technologically advanced equipment. Equipment Breakdown Coverage is there to provide insurance for sudden and accidental electrical or mechanical breakdown. This would cover things such as your furnace, air conditioner, appliances, high end electronics, and in floor heating.
Building Bylaws Coverage
Bylaws coverage provides coverage for the event that, as a result of a claim, you have additional costs associated with fixing the damaged portion of your building to conform to the current municipal bylaws or building codes.
Many home insurance policies provide you with coverage for jewelry, however, most limit the amount that they will pay. If you have more jewelry than is covered by the policy, it is possible to increase that amount and reduce the deductible.
Boats and Motors
Most home’ insurance policies provide a very limited amount of insurance for boats and motors. If you own a boat, we can help ensure that you have enough insurance.
Home insurance policies will usually provide some insurance for bicycles. Depending on the value of your bike you may require additional insurance.
Note: Home insurance, however, will generally not provide coverage for motorcycles whether licensed or unlicensed as they can be insured in other ways. If you have a dirt bike, we can help you with that as well.
In Saskatchewan ATVs are not licensed. In most cases they can be added to your homeowners’ insurance.
Additional Living Expenses
If you have a loss to your home, you may need other accommodations while your home is being repaired or replaced. Your home insurance policy provides insurance to cover this expense for you.
Personal Liability Insurance
Personal liability insurance provides you with protection if you cause unintentional injury to others or damage to other people’s property. This could include things like people slipping on your steps and being injured.
There is a reason that we ask your date of birth when we complete your application form. Many insurance companies provide a discount to your policy based on your age.
Security System Discount
If you have a professionally installed and monitored security system for break in or fire, many insurance companies will provide an additional savings on your home insurance policy.
Credit Scoring Discount
Many insurance companies are providing a discount for doing a credit check. This is a soft hit and does not impact your credit rating. It is done completely behind the scenes so that neither we, nor your insurance company sees your actual credit score. Over the past few years we have seen discounts up to several hundred dollars. This is an optional discount and you choose whether you consent to having the soft credit check done or not.
A deductible is the amount that you pay in the event of a loss. For example, if you have a $500 deductible and a claim of $5,000, you would be responsible to pay the first $500 of the claim. The insurance company would pay the $4,500 remainder. If the claim was under $500 you would not file a claim as it would not exceed your deductible. The higher the deductible the greater your savings.
Not having a mortgage or secured line of credit attached to your home can result in a savings on your insurance premium.
If you have not had a claim on your home insurance policy there is a savings on your insurance premium.
Types of Insurance
Essentially there are two different ways that you can insure your home and your belongings with a couple of variations.
There is a more bare bones form of insurance. This is sometimes referred to as named perils insurance. What the insurance company does is to specifically itemize or name the coverages that you have. These would include, among other things: fire, explosion, smoke, vandalism, wind/hail, water escape and theft. This is the more restrictive form of coverage that is available. While it does address some of the major things that can happen, it leaves gaps in coverage.
The second form of insurance is comprehensive insurance. Rather than tell you what is covered the insurance company indicates that all losses are covered unless specifically excluded. Typical exclusions would include: war, terrorism, ground shifting, damage by rodents or pets and normal wear and tear.
Broad Form insurance provides a mixture between named perils coverage and comprehensive coverage. To determine the best coverage for your needs, speak with an insurance broker.
Some companies are offering a higher amount of coverage for homes on a Prestige basis, which will include a few additional benefits for higher value homes, such as quicker claims response, higher limits for belongings and liability, and replacing of similar materials throughout the home in the event of damage. This is typically available on higher value and newer homes, with some exceptions.
There are some day to day practical advantages to comprehensive insurance over the named perils form. Two of the more significant advantages would be:
While named perils insurance usually covers theft it does not cover if something is lost or misplaced. Especially for high value items such as jewelry this may be more of a concern, should you lose a stone out of the ring, or the ring itself.
Let’s face it, accidents happen. Whether spilling red wine on the new white carpet or dropping a $4,000 TV, accidents happen. This sort of accidental damage is covered under comprehensive insurance whereas the basic insurance would not provide coverage
Unit Improvements and Betterments
Condominium corporations are required to insure the common property (lobbies, games rooms, swimming pools, etc) and the main structure. This includes the standard unit description. Any changes above the standard unit would be considered to be improvements and betterments, regardless if you or a previous owner made the change. These improvements are insured by you.
For example, suppose the standard unit description accounted for linoleum flooring, pressboard cabinets and arborite countertops. If you, or a previous owner, decided to change the unit to upgrade the flooring to engineered hardwood with in-floor heat, change the counters from arborite to granite and replace the cabinets with maple, those changes would be considered betterments and would be insured by your policy.
Contingent Coverage will protect you for damage to your unit in the event that the condominium corporation has no insurance, its insurance is inadequate, or it is not effective.
Loss Assessment for Damage to Common Property
Loss Assessment Coverage will protect you in the event that there is inadequate insurance for damage to commonly owned property.
Deductible Buydown Coverage
In the event that you are assessed the condominium’s deductible following a claim you policy will respond so that you do not need to pay their deductible out of pocket.