When investigating which type of home insurance policy best suits your needs, it’s essential to consider not only the structure of your home but also the possessions within it. Perhaps you’ve inherited your grandmother’s dining set, or maybe you have spent money on cultivating the ultimate entertainment system. Whatever your interests may be, you need to ensure that the contents of your home, as well as the building itself, have coverage. In this article, we discuss Broad Form home insurance coverage and compare it to Comprehensive Coverage to help you decide which policy offers the most protection for you and your possessions.
What is Broad Form Insurance Coverage?
In Canada, “broad form” insurance is a type of home insurance that provides “all risks” coverage for the dwelling structure but “named perils” coverage for personal belongings. This means your house jas protection against any damage not explicitly listed as an exclusion. At the same time, your contents only have coverage if the cause of loss is expressly listed in the policy, such as fire or theft. It offers a middle ground in price and coverage between basic “named perils” policies and comprehensive “all risks” policies, making it a cost-effective option for homeowners.
However, homeowners should note that it does not offer as much coverage as a Comprehensive policy. The premium of a Broad Form policy also usually falls in the middle of all three types of home insurance. Much like a Comprehensive policy, a Broad Form policy covers all risks that may affect your home’s structures. That is, minus any risks named in your policy as exclusions. Where the two policies differ is that for your contents, a broad policy only covers all named risks. This is similar to standard policies or named perils.
What Does Broad Form Insurance Cover?
If damage to your home is from a peril that’s within your policy, you will have coverage. If it isn’t in your policy, the damage may not be. Your broad form home insurance policy will cover the following:
- Dwelling: Your home and other structures on your property, such as the guest house, detached garage, or barn, are all included in this coverage. The policy guarantees protection against all perils, except those specifically named as exclusions. In other words, the home itself is completely protected.
- Belongings: Your clothes, electronics, furniture, and other items all have coverage under this. However, unlike the dwelling, they are protected against the perils listed on the policy. The coverage is limited, and payout isn’t guaranteed.
- Additional living expenses: If your home becomes unlivable due to a covered peril, any additional costs you may incur, such as accommodations, groceries, and travel, will have coverage by this policy.
Important: Be sure to check your policy for the definition of each peril that has coverage, as your insurance company may limit how coverage applies.
What Is Not Covered?
With Broad Form insurance, your property is covered against all risks, except those specific exclusions.
However, with Broad Form insurance, the contents of your property will not be covered under the policy unless a specific risk is named. It covers your contents on a “Named Perils” basis. You only have coverage for the types of losses that are listed in your policy wording. A Broad Form insurance policy will still cover any loss you suffer from risks, such as fire, smoke damage, and theft of your contents. Some of the types of losses that your insurance does not cover are mysterious disappearance (losing something), accidental damage, rips, stains, and power surges.
We’re happy to go over your policy to see what your insurance will cover. Just to remind you, if it is not within your current policy, then your insurance will not cover the loss.
Summary of Key Differences from Other Policies
- Basic (Named Perils) Policy: Covers both dwelling and contents for only the specific perils listed in the policy.
- Comprehensive Policy: Provides “all risks” coverage for both the dwelling and personal belongings.
- Broad Form Advantage: Offers the highest level of protection for the home structure while providing a more limited but less expensive coverage for personal items.
When Do You Need Broad Form Coverage?
Broad Form insurance may be a suitable option if you own a home, but have little of value in the house. Broad Form lets you insure your contents against a burst pipe by ‘naming’ that peril in a BF insurance policy. However, as with named perils insurance, your claim will be denied if your insurance company determines the damage came from a flood or fire (not covered), instead of a burst pipe (covered). If you lose your wedding rings, you may not have coverage under your policy unless you have a specific endorsement.
Who Broad Form Coverage Is For
- Homeowners seeking maximum protection for their physical structure but don’t own many expensive, high-value items.
- Those who want to balance comprehensive coverage for their property with cost savings compared to a full comprehensive policy.
- Rental property owners often choose this option.
Damage from natural disasters, such as floods, earthquakes, or landslides, is not covered unless you purchase separate add-ons (endorsements), like overland water coverage or sewer backup insurance. Damages from terrorism, war, or your own illegal activity are also not covered. In addition, normal wear and tear, or damage resulting from neglect, is also off the table.
Broad Form vs. Comprehensive Coverage
Comparing Broad Form to comprehensive insurance, your insurance company may choose to exclude something from your coverage. So that you know – these will have to be specifically outlined in your policy. There are a lot of standard exclusions — including some that may come as a surprise — so pay attention to what your insurance company and your specific policy have outlined.</p>
With Broad Form home insurance, you know exactly what you’re paying for. A good, basic policy covers losses or damages that you might encounter due to a set list of perils. But if you have concerns that the list is missing items you may want, you can add more at an extra cost. Endorsements, ‘floaters’ or riders add a specific type of coverage to your home insurance policy. Contents you own, such as jewelry, bicycles, and collectibles, may exceed the policy limits. This means you may need to schedule them on your policy. As the policyholder, you will need to make this request. Take the time to read your Broad Form policy to see what your insurer covers and what they don’t.
If you have a Broad Form home insurance policy and want to add extra coverage, ask your isure broker what type of endorsements might be right for you.
Cost of Broad Form Insurance Coverage&lt;/strong>
The cost of broad form insurance in Canada varies depending on individual factors, but generally falls in the middle of basic (named perils) and comprehensive policies. You can expect to pay a mid-range premium, possibly around the $1,250-$1,500 range for Ontario homeowners, although this is a rough estimate. To obtain an accurate cost, you must compare quotes from multiple providers. Prices are determined on a case-by-case basis, considering your specific profile and location.
Conclusion
With Broad Form home insurance policies, the coverage you receive is split between the dwelling and its contents.
- The dwelling is the physical house and any attached structure, such as balconies or a garage. Your property has coverage against all risks, except those specifically excluded (terrorism, war, etc.).
- The contents are your possessions inside the house, including any furniture, electronics, clothing, etc. Broad Form policies provide only named perils coverage for possessions.
If a comprehensive policy costs more than you want to pay and a basic or named perils policy isn’t suitable, a mid-priced compromise is the Broad Form insurance policy. This policy provides comprehensive coverage on the big-ticket items, such as the building, as well as named perils coverage on the contents.</p>
Please speak to one of our isure representatives today about whether or not Broad Form insurance is the best choice for you.
Safeguard Your Home
Get a free home insurance quote today and protect what matters most.
Your home is probably one of the biggest investments you’ll Read more
Looking for the most complete home insurance policy? Read on Read more
Did you know that by law, unlike car insurance, you Read more
