When investigating which type of home insurance policy will best suit your needs, it’s important to not only think about 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 are, you need to ensure that the contents of your home have coverage, as well as the building itself. 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?
When it comes to insuring your home, Broad Form is ‘the middle-of-the-road’ policy option. It provides wider protection than a Named Perils policy, which only covers you for risks or perils ‘named’ on your policy. However, it does not offer as much as that of a Comprehensive policy. The premium of a Broad Form policy also usually falls in the middle of all three types of home insurance. The best way to view Broad Form insurance is to understand that the type of coverage you have for the structures in your home are not the same as its content coverage.
Much like Comprehensive policies, 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. A standard list of perils with coverage from a Broad Form policy might include:
- Lightning or fire
- Explosion
- Electricity
- Smoke
- Falling objects
- Impact by aircraft, spacecraft or land vehicle
- Riot, vandalism or malicious acts
- Sudden and accidental water escape or rupture
- Theft and damage from attempted theft
- Windstorm or hail
Important: Be sure to check your policy for the definition of each peril that has coverage because your insurance company can limit how coverage applies.
What is not covered?
With Broad Form insurance, your property is covered against all risks, except those specifically excluded.
However, with Broad Form insurance, the contents of your property are not covered under the policy unless a risk is specifically named. It covers your contents on a “Named Perils” basis. You’re only covered for the types of losses that are listed in your policy wordings. 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 are not covered 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. Remember, if it is not listed on your policy, then your insurance will not cover the loss.
When will you want Broad Form coverage?
Broad Form insurance may be a suitable option if you own a home, but have little of value in the home. 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 lost your wedding rings, this may not be covered on your policy if it was not scheduled with an endorsement.
Broad Form vs. Comprehensive Coverage
Comparing Broad Form to comprehensive insurance, your insurance company may choose to exclude something from your coverage. These will have to be specifically outlined in your policy. There are a lot of common exclusions — including some that may come as a surprise — so pay attention to what your insurance company and your specific policy have outlined.
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 limits listed in your policy. 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.
In summary
With Broad Form home insurance policies, the coverage you receive is divided 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.
Speak to one of our isure representatives today about whether or not Broad Form insurance is the best choice for you.
