Home Insurance FAQ

What is a deductible?

A deductible is the portion that you are obliged to contribute towards an insured loss. It is a useful tool to keep premium costs down. The higher the deductible, the lower the premium. A typical policy deductible would be $500. If the insured loss was $60,000; the insurance company would pay $59,500 and you would pay $500.

Are there payment plans available for home insurance policies?

Yes, there are payment plans available for most policies.

I purchased my house for $150,000; the government’s property tax assessment shows a value of $130,000 and the insurance company wants to insure it for a replacement cost $180,000. Why are there three different values?

The purchase price is driven by the real estate market and also includes the land. The tax assessment value is based on a variety of factors including, location of the property, quality of the site and nature of any improvements. The replacement cost value arrived at by the insurance company takes several factors into consideration such as the cost of replacing, repairing, constructing or re-constructing the property on the same site with new property of like kind and quality. Basically the insurance company takes into consideration the actual hard costs to rebuild the home i.e. nails, lumber, labour etc.