The summer months are peak times for moving. Many families with school-age children prefer to move between school terms; summer weddings also lead to changes of address. And if a move also involves renovations, the warmer summer months may be more amenable. When it comes to your home insurance, a move is a material change of risk, and requires an adjustment to your coverage. This is the case even if you are a tenant moving from one rental property to another and the possessions you're insuring will remain the same.
Insurability
Buyers often make offers on new homes subject to financing, inspection, and review of strata minutes. Another subject to be considered is insurability. Some homes, especially older ones, may have features that require additional diligence to meet insurers’ criteria. Some of the common ones to look out for are:
- Electrical system. The wiring systems found in pre-1940s houses, and electrical fuse panels with the screw-in type fuses used until the mid-1950s, may raise a red flag to insurers. These systems in and of themselves may be sound, but upgrades done over the decades to accommodate the additional load for modern appliances may have added a hazard, especially if the upgrading was done by non-professionals. The insurer may request an electrical inspection.
- Plumbing and HVAC systems. Again, the age of the home, lack of maintenance or the presence of handyman upgrades may indicate the presence of problems waiting to happen. Water damage now surpasses the risks of fire and theft as a source of claims. And because water damage can easily cost $40,000 and up to repair, repeated claims can impact deductibles and premiums.
- Wood burning stoves and fireplace inserts. A potential fire hazard if not installed properly. Most insurance companies will require documentation to prove that it has been.
- Storage tanks for heating oil. Even if the old oil-based heating system has been replaced with electrical heat, the underground oil tank may not have been decommissioned properly, which could lead to leakage and ground contamination.
- Moisture or mould Humidity trapped over time can cause damage. This could be an indication that the dwelling was used as a marijuana grow operation, especially if modifications to the plumbing and electrical systems are also in evidence. Or it could simply result from the former occupants not adequately venting away condensation from kitchens or bathrooms.
Strata insurance
Potential buyers of strata units should also thoroughly read the strata insurance policy. If an occurrence that originates in your unit causes damage to common property or to other owners’ units, the strata corporation will file a claim on its policy for repair to the common property, and may require you to pay the deductible on the strata’s claim. Talk to your insurance broker about ensuring that your condo policy, should you decide to purchase the unit, includes sufficient coverage to pay the strata corporation’s deductible in this instance. The Strata Property Act stipulates in section 154 that the strata corporations must review the building policy annually, and report on the coverage at each annual general meeting. Property managers typically include the insurance declaration in the AGM notice-of-meeting package, and then refer owners to it during the meeting. Buyers or prospective buyers can request a copy of the insurance declaration from the seller as part of their purchase due-diligence. It’s not included in the Form B Information Certificate that sellers are required to provide to buyers, but sellers should be able to provide the insurance declaration because they will have received it as part of previous annual general meeting packages, or they can authorize their property manager to provide it.
Passed with flying colours?
Have you found the one? It’s ticked all the boxes and passed all inspections and now you are finally ready to move in. Here are some tips for that will keep your home pleasantly insurable and protected from risk:
- Change your locks. You never know how many copies were made for friends and family of the previous owner.
- Get to know your appliances. Consult the manuals of dishwashers, washing machines and dryers to ensure its proper use. Most of these manuals can be found online. Clean dryer lint traps and vents. Look behind appliances for signs of leaks, mould or overloaded wiring that need immediate attention.
- Remember to change your address for your car insurance.
- Be wary of storing important documents in your storage locker. Storage lockers are typically located in basements, which can be prone to high humidity or flooding. You may not be able to recover these valuables.
- Take photos or video and document your home inventory and keep these off site in case you ever need to make a claim. It will be harder to do so after an event, such as a fire. New furniture and items bought for the new home should be included.
- Candles add a wonderful ambiance, but use them carefully. They are one of the biggest causes of house fires.
- Keep a fire extinguisher handy. Install a fire alarm and a carbon monoxide alarm. If you already have one, do a test-run to ensure they work.
- Consider installing an intruder alarm.
For more information on adequate insurance coverage, consult your neighbourhood insurance broker. He or she can make recommendations for the right coverage based on a review of the policy wordings and prices of a range of insurance companies. Brokers can tailor your coverage to your needs, and provide extra coverage for your high-value belongings or unique situation. And your broker is on your side, advocating on your behalf in the event of a claim. Find a broker here.
