Home Insurance FAQ

Not legally, but a lender may require it for a mortgage, or your strata may require it as part of their by-laws.

It’s completely normal for the coverage limit on your insurance policy to be different than the market or BC Assessment value. The limit on your home insurance policy should reflect the cost to rebuild your home in the event of a total loss, like a fire. It doesn’t need to account for things like the value of the land, or fluctuations in market conditions.

Brokers used specialized tools to help calculate the estimated replacement cost of a property based on the building details.

For insurance, similar homes don’t mean identical risk profiles. Rates are made up from several variables, many of which aren’t immediately visible. The geographic location of a property can impact the price significantly. A property built on a flood plane could have to pay more for flood coverage, or a property in the city may pay less for fire coverage because of the decreased wildfire risk.

Other factors can cause premiums to differ, even for homes in the same area. For example, updates to the home, the age of the homeowner, loyalty discounts, claims history, and credit scores all come into play. Coverage limits and deductibles chosen will affect premiums too. Every policy is custom-built to account for the needs and risk factors that apply to each individual and their property.

Coverage can vary by insurance company; some protections are bundled in packages while others are offered à la carte depending on eligibility. Most policies include basic water escape, but the key requirement is that the loss must be sudden and accidental — things like a burst pipe, a toilet overflow, or a leaking appliance.

Other types of water damage, such as sewer backup, storm‑drain overflow, or water entering the home from heavy rain, are usually optional upgrades. These are often sold as add‑ons, some examples include:

Ground Water refers to water in the soil below the surface — including wells, underground streams, and naturally occurring moisture in the ground. This can enter your home through cracks in a foundation.

Surface Water or Overland Water refers to freshwater that collects above ground where it normally wouldn’t be due to things like torrential rainfall, snow melt, or river overflow. It can cause flooding in your yard that damages your home, or accumulation of water on a balcony.

Sewer Backup refers to water that has backed up into your home from a drainage system, like a shower, toilet, or basement. These losses are especially difficult due to the nature of wastewater damage.

Tenant policies are designed to cover things that the landlord’s insurance doesn’t. Here are a few ways that a tenant policy can protect you in the event or a loss:

Your belongings if they’re damaged by fire, water, theft, or other covered losses.

Your liability if someone is injured in your unit or if you accidentally cause damage to the landlord’s property (like a kitchen fire or overflowing a sink).

Additional living expenses, if you need to move out temporarily after a covered loss. This can cover unforeseen additional costs for emergency items like a hotel, clothing, or food.

It is not a legal requirement; however, landlords have the right to make it a condition of the lease before you move in.

Many condo and townhouse owners question why they need to buy insurance when their strata already have a policy in place. The answer is that strata policies and condo owner policies insure different things.

Strata insurance covers the building structure, common areas, and large multi-unit losses. Condo unit owner policies cover additional items that the strata’s policy doesn’t, such as:

The inside of your unit — including your walls, flooring, and ceiling.

Your personal property and belongings — This is everything from your furniture and electronics down to your kitchenware and clothing. It also covers your appliances, like a fridge or stove.

Unit betterments and improvements – These are upgrades or renovations made to the unit. For example, if you’ve redone the kitchen or replaced the tile in the bathrooms.

Personal liability — This can be especially important in condo units, as there’s a risk of accidentally causing damage to the units around or below yours.

Strata assessment coverage — In the event of a loss, your strata could ask owners to pay a portion of the damages or deductibles. It’s not uncommon to see these assessments cost anywhere from $25,000 to $250,000! Condo owner policies have coverage for this available, so you aren’t paying out-of-pocket.

Loss Assessment and Deductible Assessment coverages are both designed to protect unit owners when there is a large-scale loss in their building, but they cover slightly different things. As an example, let’s say that a high-rise complex has experienced a massive sprinkler discharge loss and the strata is organizing repairs:

• If the strata’s insurance policy covers the loss, they may ask that one or more condo unit owners in the building cover the cost of their deductible. This is considered “Deductible Assessment”.
• If the strata’s insurance is inadequate or they don’t have coverage for the loss, the strata may ask that all unit owners in the complex pitch in to pay for the uninsured damage. This falls under “Loss Assessment”.

Insurance premiums have been steadily rising in recent years, and market conditions have not been favourable. Severe weather events have resulted in more losses and increased rebuild costs and inflation are all factors that impact insurance premiums. It’s our job to help our clients navigate through this tough market. Here are some factors that can reduce your premium or qualify you for an additional discount on your policy:

• Higher deductibles: Clients should try to preserve their claims history, and “save” their insurance for larger losses. Smaller deductibles no longer have a practical application and insurance carriers reward policy holders with lower premiums.
• Monitored fire and burglary alarm systems
• Sprinkler systems
• Water leak monitoring devices, flow detection systems, and automatic shutoff valves
• Remaining claims free
• Being mortgage free
• Updating items like hot water tanks, furnace, and roofs
• Some carriers offer loyalty discounts for long term clients

Insurance carriers use several factors and actuarial data to calculate what they think it will cost them to rebuild your home:

• Location
• Home age, size and characteristics of the house
• Claims history
• Coverage limits and deductibles
• Geo-rating of the area (ie: flood plain, or wild fire risk)

Insurance companies care about home‑based businesses because they can change the level of risk at the property — and your home policy is not designed for business exposure. Even a small business can create situations the insurer did not plan for.

For example:

• Business equipment (computers, tools, inventory) often is not covered under a regular home policy.
• Clients or delivery people coming to the home increase liability exposure.
• Business operations — like baking, woodworking, hair services, or online sales — can increase fire, theft, or property damage risks.
• Certain businesses (like childcare, beauty services, or repairs) carry higher liability risks than normal household activity. They may require a commercial policy to ensure you’re protected in case a lawsuit arises related to your business.

Rate increases can typically be between 10-30% across all properties owned by you. Unfortunately, this is not something that we are privy of ahead of time.

Claims are triaged depending on severity/urgency, but usually a response within 48 hours can be expected. Response times can also be delayed if there is a serious weather event, and many people are affected by the same issue in the same location. Outside of this, calling the main claims number and asking for an update is often a great way to obtain an update on your loss. Your broker can assist with checking in as well.

It’s important because all insurers have different rules around what kind of rentals they accept. The original contract you signed with an insurer advises that if there are any changes they must be notified immediately. For example, if your family of 3 have moved out and you are now renting out 3 rooms to unrelated individuals – then that can be classified as a rooming house, and it may not be covered. The same is true for short-term rentals, or sublets. For any of those scenarios you will need approval, if not – your policy could become void and your claim denied. For this reason, it’s important to contact your broker to inform them of any changes regarding your revenue property.

Depending on where you live in BC, it could be a requirement of your mortgage. Aside from that it’s important to carry it if you are eligible – it’s expensive because the insurers know it’s going to happen, they just don’t know when. Another factor to consider is that the government assistance that would be triggered after an earthquake is only available to those who carry the underlying coverage with insurance.