First Time Homeowner Insurance In Ontario
Life is full of firsts. A baby’s first smile, first steps, first words. A teen’s first kiss, first date, first time driving. And then there are those ‘adult’ firsts: Your first ‘real’ job, first serious relationship, first car, and your first home purchase.
Each first is a milestone, a marker on the road of life, an important point of passage as the years go by.
At Morison Insurance we want you to make all the right decisions when you take that big first step to home ownership. We know there are many things to think about. And there are lots of pricey things to pay for like the mortgage, legal fees, taxes, title insurance, moving costs, and others. Among these many costs, first time homeowner insurance is often one of the least expensive yet one of the most important.
Is First Time Homeowner Insurance Expensive?
First time homeowner insurance prices can vary depending on a number of details about your new home, however, this is the important point: When you are spending lots of money to buy your first home, you want to make sure it is protected in case of problems such as fire, theft and other unforeseen bumps that may be encountered on the highway of life.
To quote one of our brokers: “When you are insuring a $500,000 home, for example, your home insurance is a relatively small amount. It costs less than your property taxes.”
What Does First Time Homeowner Insurance Provide?
Like all home insurance, first time homeowner insurance is about financial protection. A home insurance policy provides the purchaser with protection in case of certain perils. A peril is an accidental and unexpected event that may cause a loss which can impact you financially. Insurance coverage, the details of which are outlined in your policy sold by insurance companies and paid for through the purchaser’s premium, can help to pay for the replacement or repair of your home, your contents and other buildings on your property in the event of an insured peril. Fire is a good example of a peril covered by home insurance.
As a first time homeowner insurance purchaser, this is important to know. You are spending a lot of money for your first home. It’s a big investment. It’s vital to get your first time homeowner insurance right. Our insurance experts can help you with this.
Real Estate Broker Melissa Heffernan has been selling houses for 9 years. Home insurance is essential, says Heffernan, because it is one of the biggest financial commitments and investments most people will make. “We all want to think we are invincible and bad things like a fire or flood won’t happen, but sometimes they do,” says Heffernan, of RE/MAX Escarpment Realty Inc. in Hamilton. “Most people can’t afford to pay for the damage that can be done,” she adds.
People spend thousands of dollars on their homes, notes Heffernan. “What about protecting all the stuff you’ve bought,” she asks.
Is First Time Homeowner Insurance Required?
No. There is no law in Canada that says homeowner must have home insurance. That said, further explanation is definitely required. Here are two reasons why first time homeowner insurance is tremendously important:
- Home insurance is good protection to have. It can protect you from financial hardship if you have a tragic event such as a fire or other peril which threatens your financial well-being. For example, if you have a fire in your home and you do not have insurance, you alone will be responsible for covering the costs of required repairs or replacement of your home. With home insurance, the insurance company will help to pay for repairs or replacement as stipulated in the terms of your insurance policy. Here is the important point: If you can’t afford to replace your home with your own money, you should have home insurance. Your annual home insurance premium – typically about $1,200 to $3,000 annually – is reasonable when compared to the potentially staggering costs following a loss or damage to your home.
- Mortgage lenders will require insurance when a mortgage is arranged for your first home. Proof of insurance is often required before your mortgage is approved.
How Do I Know If I Am Getting the Right First Time Homeowner Insurance?
If you are buying insurance through an insurance broker you will know you are getting the best insurance products, service and advice. As soon as you contact our insurance brokers, we begin the process of getting multiple quotes for your first time homeowner insurance. Our brokers do not work for any insurance companies, we work for you! Our loyalty is to get you insurance that properly protects you and your home so that your largest asset is properly protected!
What Coverage Options Are Available To First Time Homeowner Insurance Purchasers?
There are several considerations first time homeowner insurance purchasers will want to know so they end up with the best coverage to meet their unique needs. You can select comprehensive, named perils (also called basic), broad or no-frills coverage.
This coverage is the most extensive and is selected by most homeowners in Canada. This coverage is known as all risk and covers all perils, except those perils or types of losses specifically excluded on the policy. Essentially, if a peril is not listed as excluded on your policy, then it is covered if you have a Comprehensive home insurance policy. This is, by the nature of the extent of the coverages offered, typically more expensive.
Broad home insurance
This type of policy is somewhat similar to Comprehensive insurance coverages, however, the difference is that Broad home insurance covers all risks except those named in the policy as exclusions and for your contents, Broad covers only risks named in the policy.
Basic or Named Perils home insurance
This kind of policy, sometimes called a Standard policy, is exactly as it is named: Only named perils that are listed on the policy are covered. This kind of policy is typically less costly, however, the perils that are covered are limited to those named only.
No-Frills home insurance
This type of policy is probably not what a first time homeowner would want. It is better suited to those who are looking for bare-bones coverage for a handyman special or fixer-upper kind of home.
Our first time homeowner insurance experts will be happy to further explain these coverage options and details to you to help you to determine which policy type is best for you.
What Will First Time Homeowner Insurance Cover?
Your first time homeowner insurance will cover you, your partner, your children, any dependents under the age of 18 and dependents who may be temporarily living away from home or who are away attending school. You should let your insurance broker know if you are sharing your home with a relative or a friend or you are collecting rent because these situations may impact your insurance coverage.
Perils often covered by home insurance policies are fire, lightning, some kinds of smoke damage, theft, your personal belongings, and your personal liability.
Personal liability coverage protects you in an accidental situation where someone is injured or there is property damage caused to others. For example, if someone slips on your deck, is hurt and you are held legally responsible, liability coverage will protect you to the limit stipulated on the policy.
It is important to know that you can purchase optional coverages for perils such as water damage, sewer-backup, earthquakes and others.
You can also purchase extra insurance for high-value items such as jewellery, art, bicycles, computers, and sports equipment where specific limits of insurance are applied in policies. If the value of your items exceeds the limits on the policy, you should purchase extra coverage to ensure they are properly covered by insurance.
Also note that home-based businesses are not covered by home insurance, however, extra insurance can be purchased to insure your business in your home.
What Will First Time Homeowner Insurance Not Cover?
All insurance policies have exclusions – things that are not covered. Some perils are considered catastrophic and are not insurable by the insurance industry. Examples of these include acts of terrorism and war.
Also generally not covered in first time homeowner insurance policies is damage done by pests such as raccoons, and general wear and tear or degradation. These are considered part of general upkeep of your dwelling which is expected to be done by the homeowner.
As a first time homeowner you may be thinking of changing/updating your new home. It is important to tell your broker if you do a renovation, install a woodstove, finish your basement or make updates such as to your heating, plumbing, electrical or your roof.
How Much First Time Homeowner Insurance Do I Need?
You need enough insurance to replace your home should it be completely destroyed. This means insuring your home to its replacement cost. Note that this is different from the market value of your home and the municipal assessment value of your home. To figure out the replacement cost of your home and get the right first-time homeowner insurance, our brokers will need to know some details about your home:
- When was your home built?
- What is the square footage of your home, excluding the basement?
- Is your home a single family or multi-family dwelling?
- How old is the electrical wiring?
- Is the plumbing new?
- What is the style of your home? – A bungalow, for example.
- Is your home one storey or several storeys?
- Do you have a finished basement?
- What kind of foundation do you have?
- How many bathrooms?
- What is the exterior finish?
- Do you have a garage, carport or other structures attached to your home?
- Do you have a swimming pool or hot tub?
Answers to these questions and others will help our brokers to determine how much first time homeowners insurance you need.
As one of our brokers said, “The more information the customer gives us the better. We can use this to get customers as many discounts as possible.”
How Much Does First Time Homeowner Insurance Cost?
On average, the cost of first time homeowner insurance can range between $1,200 to $1,800 per year. The cost of your homeowners insurance is dependent on many factors including where the house is located, the type of coverages selected and the type of home (example: Detached, Bungalow, Rach-Style) just to name a few. Contacting an insurance broker to get your personalized insurance quote will provide you with an exact price to insure your first home.
After collecting the details on your home our brokers will immediately begin looking for the best first time homeowner insurance package for you at the most competitive price. We shop insurance companies across Canada because we know that shopping can save you hundreds – and sometimes thousands – of dollars. We also know that companies offer different types of coverages and by shopping we can get you what you need for your specific dwelling.
How Can I Save Money On First Time Homeowner Insurance?
There are lots of ways to save on your first time homeowner insurance. Savings add up and our brokers have saved some customers thousands of dollars.
Here are a few tips:
- A credit check can help you to save on your first-time homeowner insurance. Our Morison Insurance brokers can do a “soft” credit check. This is confidential, does not impact your credit score and we do not see details of your credit history, but we are given a score that may allow us to apply a sizable discount to your home insurance. As one of our brokers said recently, “I’ve seen this take as much as a couple thousand dollars off an insurance quote.”
- Insurance discounts can also increase your savings. We have dozens of savings available to apply and we will get you all the savings you qualify for. Some of the more popular and sizable discounts are: non-smoker discount, discounts for having a sump pump or backwater valve, monitored burglar and fire alarms, monitored water alarms and smartphone monitored alarms.
Should I Buy My First Time Homeowner Insurance Through the Bank?
If you are dealing with a bank for your home purchase and you are offered insurance through the bank, you should know that you will get only one price for your first time homeowner insurance. The bank is selling its insurance only. Be aware that banks are not insurance experts the way independent insurance brokers are. They are in the business of banking.
We are insurance brokers and we know insurance. It’s what we do every day. We are trained and licenced by the Registered Insurance Brokers of Ontario (RIBO) which ensures licencing, professional competence and ethical conducts by insurance brokers across the province.
It’s also good to know that insurance agents only sell insurance for one company. Again, there is no shopping done by an insurance agent.
Insuring with an insurance broker is best for you. We focus on several things when arranging your first time homeowner insurance:
- We get you the first time homeowner insurance you need to be protected.
- We shop the market to find you the best insurance coverage at a competitive rate.
- We apply all the insurance discounts you deserve to further drive down your price.
- We will provide you with outstanding service year-round. We are here for you. If you have questions, want to add or delete an insurance coverage, you want to add another line of insurance to get a bundled insurance discount (such as insuring your home and car together), or anything else, we will look after you. Call, text or email us at any time.
What Are Some Things To Think About When Buying My First Home?
Our insurance brokers know that buying a home and first time homeowner insurance can be confusing and sometimes stressful. The real estate market is competitive, especially in Ontario. If you have been hunting for the perfect home and you find it, you may need to seal the deal swiftly.
Here are a few things to think about when buying your first home:
- Having a real estate agent/broker can be very helpful. An agent can help you in many ways. Real estate agents know their communities and they know the market, including prices. Hamilton-based Real Estate Broker Melissa Heffernan notes that three of the top reasons for using a real estate broker or agent are Education & Experience/Market Conditions Information, Neighbourhood Guidance and Price Guidance.
- When you are looking at a home, agents can also often help or get you assistance with assessing things such as wiring, plumbing, the roof, windows and the furnace may need replacing. These are big-ticket items and it’s good to know if these may need replacing in the not-too-distant future. These things can also make a difference in your insurance costs.
- Consider a mortgage pre-approval. This can be a big help if you need to move quickly with your home purchase.
- Having a great insurance broker is imperative. Our Morison Insurance brokers are educated, experienced and provincially licenced home insurance experts who will get you the first time homeowner insurance you need to protect your investment. We do this quickly and make it as stress-free as possible. Our brokers do not work for any insurance companies, banks, or mortgage lenders. We are independent. We work for you only. Our commitment is to have multiple insurance companies bidding for your first time homeowner insurance business to provide the best coverage, and to provide you with award-winning insurance advice and service.
Should First Time Homeowners Have Insurance Before Their Closing Date?
Yes. Generally, the lender involved in financing your home purchase will require that you have insurance in place before closing.
To get the best first time homeowner insurance coverage, value and guidance, contact an insurance broker before the closing date of your home. We can arrange for same-day insurance, however, a day or two in lead time is preferred to provide time to get review your needs thoroughly and get as many prices as possible. We are here to help.
At Morison Insurance, You Have A Dedicated Broker
Here is another important benefit for you as a client of Morison Insurance: Every first time homeowner insurance purchaser – like all of our clients – has a dedicated broker looking after their insurance. We are not a call-centre. We don’t just sell you an insurance policy then leave you on your own. We get to know you and your insurance needs. We provide ongoing guidance throughout the term of your insurance. If you value a relationship and working with a caring insurance professional, Morison Insurance is a great choice to look after your new home insurance.
Further, we can look after all of your insurance needs. In addition to your new home, we can insure your car, your truck, your cottage, your travel trailer, your business, your life…. You name it, we can insure it.
If you have further questions about your first time homeowner insurance please a call or complete one of our contact forms. Our brokers will answer your questions.
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At Morison Insurance we represent dozens of Canada’s best insurance companies. All provide competitive prices, excellent service and outstanding claims service. We will shop at all of these companies to get you the best insurance for your individual needs.