What Your Home Insurance Plan Should Cover

Buying a home is likely one of the biggest investments you will make in your life. Whether you opt for a condo, single-family dwelling or townhouse, you’re going to want an extensive insurance policy to protect your greatest asset. Although home insurance is not mandatory in Ontario, if you are applying for a mortgage, it is likely a requirement set forth by your broker. There is plenty that can go wrong when it comes to owning a home, and this type of insurance is not a one-size-fits-all solution.

The right coverage will likely go beyond the basics, and we have compiled a list of items your home insurance plan should cover:

Property Damage

No matter the type of property you own, exterior and interior damage can come in all shapes and sizes. From natural disasters to leaky pipes, a lot can go wrong when it comes to your home. Your insurance policy should spell out the types of perils you are protected against, and the ones that are omitted will have to be dealt with out of pocket. This can include regular wear and tear, like needing a new roof, or pest damage caused by rodents. 

Check with your insurance company to determine what types of damages your home is protected from, and review the likely dangers in your area to decide if you require further coverage. Don’t forget to consider additional structures on your property, such as a detached garage or shed.

Loss or Theft of Contents

Within your home, your possessions, such as electronics, clothing, and furniture, should be covered under your insurance policy. Just like property damage, unforeseen circumstances like a fire can ruin your belongings. There is also the possibility of theft or vandalism in the event someone breaks into your home. 

Each insurer sets its own policy and limits when it comes to covering costs of replacement for these items, so be sure you are comfortable with the value that is quoted. You might also consider purchasing additional coverage for expensive pieces such as jewellery or art.

Personal Liability

In addition to the interior, exterior, and contents of your home, there is one more variable to consider with home insurance coverage: yourself. As a homeowner, you are responsible for keeping your residence safe. But, there is always the chance someone could be injured on your property, whereby you could be liable for legal and medical costs. This type of coverage can also cover lawsuits resulting from damages you cause negligently to someone else’s property and is worth reviewing to ensure you have an adequate policy in place.

Additional Living Expenses 

If you are unable to live in your home due to extensive damage from an insured peril (i.e. fire, wind, sewer backup, or otherwise), this type of coverage will reimburse you for the living expenses required to stay in a hotel or home rental. You may also be reimbursed for a partial amount of the meals you eat in restaurants, depending on the relative costs of your grocery bill. Although it would be a catastrophic event, it is essential that your insurance policy covers additional living spaces if something were to render your home unlivable.

Replacement and Reimbursement

You have a choice between replacement value and actual cash value for reimbursement claims filed under your home insurance plan. The differences are as follows:

• Replacement value means the home insurance plan will replace the damaged goods with a new item similar to the one lost. This can include rebuilding an entire home or the replacement of a single window damaged by kids playing street hockey.

• Actual cash value is not as desirable as replacement value, as reimbursement factors into the depreciation of each item. For example, a 20-year-old building that is completely destroyed by fire will not receive as much reimbursement as a five-year-old building if they are of a similar size and layout.

What About Water Damage Coverage?

Water damage is one of the most frequent and costly types of home insurance claims in Ontario. Unfortunately, many homeowners assume they’re fully protected, only to find out after the fact that their policy doesn’t cover the type of water damage they’ve experienced. Standard home insurance usually covers sudden, accidental events, like a burst pipe in winter, but it often excludes sewer backup, overland flooding, or sump pump failure.

With climate change bringing more severe storms and heavy rainfall, the risk of water damage is on the rise. A single incident can cause thousands of dollars in repairs, especially if you have a finished basement or valuable belongings stored downstairs. That’s why many insurers now offer optional add-ons for enhanced water protection. If your home is in a flood-prone area or you simply want peace of mind, it’s worth discussing with your broker.

What’s the Role of Deductibles?

Deductibles are one of the most overlooked parts of a home insurance policy, yet they have a big impact on both your premiums and how much you’ll pay if you ever make a claim. 

A deductible is the amount you agree to pay out of pocket before your insurance coverage kicks in. For example:

If you have a $1,000 deductible and file a $7,500 claim, you’ll cover the first $1,000 while your insurer pays the remaining $6,500.

1. Many homeowners choose a higher deductible to save money on their monthly premiums, but it’s important to consider how comfortable you are paying more upfront in an emergency. 

2. On the other hand, a lower deductible means you’ll pay less out of pocket if something happens, but your premiums may be slightly higher. There’s no one-size-fits-all answer—the right choice depends on your budget and risk tolerance.

How Often Should You Review Your Policy?

Home insurance isn’t something you should purchase once and forget about. Your coverage needs can change quickly, and reviewing your policy regularly ensures you’re not left underinsured. Major life changes—like renovating your kitchen, finishing your basement, or adding a swimming pool—are all situations where you should revisit your insurance. Even smaller updates, like buying new electronics or expensive furniture, can shift the value of your contents coverage.

A good rule of thumb is to review your policy annually with your broker. This gives you a chance to confirm your coverage is up to date, adjust deductibles, and explore potential discounts. In some cases, bundling your home and auto insurance can even save you money. A quick review once a year can give you peace of mind and help you avoid unpleasant surprises if you ever need to make a claim.

Your home insurance plan should factor in these details in order to make it easier to get your life back on track following a disastrous circumstance. At Rowat Insurance, we will work with you through every step of your home insurance plan to ensure you understand your coverage and provide solutions if you feel you need more. Contact us today to learn more about our plans.