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A homeowner’s insurance policy protects your home and property from lots of different types of damage. This can include perils, such as fire, lightning, theft or vandalism. But there are some things your insurance won’t cover. This can be water damage caused by a plumbing backup or protection for your home business. Fortunately, most major insurers offer optional coverage add-ons, called endorsements. They can supplement the coverage in your policy to fully protect your home and its contents. Below are some of the more popular home insurance endorsements that’ll add an extra layer of coverage to your policy.

1. Sewer backup

Home insurance policies cover some types of water damage. However, sewer backup is usually not covered by standard home insurance policies and can be an endorsement to consider. Sewer backup typically covers water damage from a drain, excess rain, eavestroughs, sewer, septic system, or sump pump. This covers anything from clogged or grease-filled drains to damaged sewer lines that can cause sewage to back up into your home. This endorsement encapsulates coverage for water removal, removal of damaged materials and repairing water damage to walls and floors. Additionally, it will cover the replacement of damaged property and fixtures. The cost of this optional endorsement, as well as coverage available, will vary from one insurance provider to the next.

Tip: Consider installing a backwater valve in your home to help stop a potential sewer backup.

2. Inland flooding

Flood damage means water damage caused by surface water from overflowing rivers and lakes, snow, or rain. This endorsement is now available to Canadians because as the weather continues to change, inland flooding is becoming more common. More homeowners and renters should really consider this endorsement. Spreading the risk among homeowners with different levels of flood risk makes coverage more affordable. According to research, 94% of Canadians are now able to add an inland flooding endorsement to their home insurance policy.

3. Earthquakes

Most home insurance policies exclude damage from earthquakes. This has historically been a concern to provinces, such as British Columbia and Quebec. However, according to the Insurance Bureau of Canada (IBC), there is a 5-15% risk that a powerful earthquake will hit the area from the St. Lawrence River Valley to the Ottawa Valley, which includes Quebec City, Montreal, and Ottawa. When you add this endorsement to your policy, it provides coverage for your home, your outbuildings (like your detached garage or garden shed), and your personal belongings in the event of an earthquake. Depending on your insurer, the earthquake endorsement, “may also cover the cost of bringing your home up to current building codes during the repair process, as well as other expenses, like debris removal.” Earthquake endorsements have a separate deductible and, depending on where you live, tend to be affordable.

4. Home-based business

Operating a home-based business allows you greater flexibility with no commute and better overall work-life balance. However, having a home-based business will present you with some challenges if you don’t have the right insurance coverage. Even if you have a part-time home business, you may require home-based business insurance. This is to ensure that you and your business property have adequate coverage.

A home-based business endorsement or rider is ideal for freelancers and part-time business owners.Your home insurance policy does offer a small coverage limit for books, tools and instruments necessary for a business. However, if you’re running a business from home, you may not have enough insurance to protect your business equipment. Without business insurance, you won’t be protected in a business emergency. Without specific business coverage, your insurance company can cancel your home insurance policy. Depending on the type/size of business you’re planning on launching, you may qualify for a home-based business endorsement. This will be added to your home insurance policy instead of having to purchase a full commercial insurance policy.

5. Scheduled personal property

Your home insurance policy has limits on coverage for certain categories of specialty belongings. This may include your computer equipment, jewelry, sports equipment, bicycles and collectibles. When the value of these items is higher than the limits listed in your home policy, you’ll need to make a change to the items “scheduled” on your policy. Scheduled property endorsements allow you to add coverage for specific high-value items to your home insurance policy. Even if you have other endorsements, the coverage limits might not be high enough to cover high-value personal property. 

6. Guaranteed replacement cost

What if your home suffers major damages as a result of a fire? Let’s say your home’s replacement cost of $300,000 when the assessment was done. Now, years later, the cost to return your home to its previous state costs $360,000? What if $300,000 wasn’t a proper estimate? Now what? This is where guaranteed replacement cost comes into play. GRC means that if you experience a total loss, the rebuild is not capped at the total amount of replacement cost, i.e. $300,000. If your RC is estimated at $300,000 and the rebuild costs $360,000, the total cost will be covered under GRC. This coverage guarantees that your insurer will put you in the exact same position you were in before the loss. As a result, this means that the beautiful home you have will be protected and rebuilt, no matter the cost.

Important: Should you decide to make some upgrades during the repair or rebuild as a result of a claim, then you typically will be responsible for the difference in cost. 

Whichever home insurance endorsements you choose, making sure your home has proper coverage will guarantee peace of mind should you suffer a loss. Before you add any endorsements to your home insurance policy, ask your isure broker to run through coverage options available to you. We’re happy to discuss which ones matter the most based on where you live and what you own.

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