April 2006 Archives

As you have your building(s) insured under the policy, we would like to bring it to your attention to several important issues in the insurance of a building.

1. Co-insurance

With most policies, they are subject to a 90% co-insurance clause, and their coverage is on a replacement cost basis. What it means is that you should insure for at least 90% of the replacement cost (i.e. the cost to replace your building with a brand new building of the like kind and quality). If the amount insured is less than 90% of the replacement cost, you will not be paid 100% of your loss. Following is an example:
You insure for $1,000,000 on a building, whereas the replacement cost of which is $1,500,000; if you have a valid claim of $300,000, you will be paid: $300,000 X 1,000,000/1,500,000 = $200,000.

2. By-law Coverage

If a building is damaged or destroyed by a fire, you may incur extra costs in repairing or re-constructing your building to meet the current by-law requirements of the City. For example, you may have to put in a sprinkler system, or reinforcement in respect of seismic or fire protection. These can be quite costly, particularly if your building is old. You are strongly recommended to take out this by-law coverage.

Canadian Importers | Exporters

Q: My car was broken into while I was shopping at the mall.A brand new golf bag and a leather briefcase I had just purchased for my husband were stolen from the trunk. Do I claim these items through my automobile or homeowners insurance policy?
A: Your home insurance will cover items stolen from you car that are not permanent fixtures of your car, as long as you have receipts to prove ownership of those items.

The following infomation are excerpted from the BC insurance broker flyer. I think it is good enough to explain the basic need for home insurance and limit of coverage.
A house is more than the place where you live. It is your home. It represents security for those who live in it. It is probably the biggest investment you’ll ever make; it is independence for first-time homebuyers, and so much more. Something as valuable as your home needs a lot of care.
This is why you need insurance. Insurance is vital to protecting yourself from unexpected losses.Your homeowner’s insurance policy covers your house and personal property, and protects you from liability claims. It is something you cannot do without, and should purchase as soon as you become the owner of a house, even if it is still under construction.
All homeowner’s policies provide coverage for:
• The house and the structures attached to it.
• Personal property or the contents of the insured dwelling, such as the furniture, the appliances, your clothes, etc., as well as the personal effects of your family members.
• Liability, when, due to negligence, you may be held responsible for an act causing injuries or property damage to others.
However, policies differ with respect to coverage and claims settlement. For example, most policies will cover the dwelling(s) on a Replacement or Rebuilding Cost basis.
This is why the limit of insurance provided for your house can be higher than the purchase price of the house.