Wear and Tear and Other Exclusions of Home Insurance
Ah, a new year and already I have to say goodbye to an old, trusty friend; my Actifry. We had 5 great years together and you served me well. I know I cannot use my home insurance to replace you and therefore, I’ll have to use my own pocket money and although you were certainly worth every penny, I have to pause and think through whether to replace you or whether to just make do with my remaining pots and pans.
Can I replace a broken appliance using my insurance policy?
Every object has a life expectancy and insurance is not meant to cover your object’s loss or damage as a result of:
- normal wear and tear from use or age;
- manufacturer’s defect;
- damage due to improper use (failure to follow directions);
- intentional destruction of property.
By the way, if your appliance is broken by an insured peril (for example, burned in a house fire), then it will be covered by your home policy.
What does my home insurance cover?
It’s easy to get tunnel vision and focus on the negatives – but please don’t lose sight of the fact that home insurance is an extremely valuable product that can help you in times of trouble. Your home insurance covers a lot:
- Most home policies are a package covering both property and liability. So not only do you have coverage for your home, your outbuildings and your contents, you also have legal protection in the event someone sues you for damages you’ve caused them as a result of your negligence. This legal protection includes legal counsel and other associated court cost coverage, as well as compensatory damages (amounts to help reimburse the injured party for their damages).
- A basic policy provides coverage for damage caused by many perils (i.e. causes of loss such as fire, lightning, explosion, falling object, impact by land vehicle, …). NOTE: Good Brokers will recommend you purchase a comprehensive policy and not a basic policy – talk to your Broker for more information.
- Additional Living Expenses is also provided – when you are displaced from your home after an insured loss. If you cannot live in your home during repair/reconstruction, you may incur costs to live elsewhere, for example, a hotel. While you are at the hotel, you may have to put your family pet in a kennel (again, another cost that didn’t exist before you experienced this loss) and you also have to eat out every day because you can’t cook in the hotel. Well, guess what? Your coverage aims to reimburse you for these [reasonable] additional costs of living stemming from the insured loss.
The list above is just a quick summation of what a home insurance policy covers. If you are not yet convinced on the value of a home insurance policy (and this includes a renters’ policy aka tenants insurance policy, or a condominium unit owners policy, or a mobilehome insurance policy) – let me put it this way…
It’s January in Atlantic Canada. And on this particular Friday, I am hearing on the radio that a winter storm is coming this weekend – the details of the type of storm is not clear – it could be a ton of snow or it could be a ton of rain. With a storm, however, most likely this could result in property damage. Even if the storm doesn’t directly affect you or your home, you could suffer a fire loss to your house during the storm (knock on wood that does not happen). Due to the storm, there could be a delay in getting a fire fighting crew to your home to put out the fire, thus the fire has more time to burn your home and possessions. If there is a lot of wind – that could give the fire more power to burn, helping it spread through your home faster.
In an effort to make this story less bleak, let’s just say that the fire only took half of your home and possessions. What do you do now? This is where your home insurance policy will help you.
- You can’t stay at home – you have to go to a hotel. Your Additional Living Expenses coverage will help you here.
- Let’s say that it was your bedroom, bathroom, linen closet and living room that were consumed in the fire. You need your clothes, slippers, shoes, toothbrushes, toothpaste and other grooming products (add up your shampoo, lotion, hair products – the small things can add up to a significant amount of money) – you need replacement for certain items right away and you may have bought all of your clothes on sale, but Christmas and Boxing Day Sales are many days past now – you’ve got to pay full price. Your home insurance covers your normal, everyday items for replacement value – that’s a good deal!
- And of course, your home has to be repaired – your home insurance should replace what you had before the loss (INSURANCE TIP: If you can get a policy with Guaranteed Replacement Cost coverage, get it! At the very least, you should have Replacement Cost – again, talk to your Broker to learn about the difference.)
I could go on for hours (or pages) about insurance, but I won’t. I just wanted to re-state the importance of insurance. It’s not meant for minor claims or things that aren’t an insurance matter like wear and tear or manufacturer’s defect – it’s in the event you lose something very important and not easy to replace (I’m talking both time-wise and money-wise). Yes, you might have to pay a couple of thousands of dollars towards insurance in your adult life, but it’s there to help you in the event you lose your home – even if your home and your possessions end up costing the insurance company hundreds of thousands of dollars to replace for you.
A few tips for buying home insurance
- Know what you are buying – if you buy from a licensed Broker, he or she will help you understand your purchase. Your Broker will help you each year at renewal time and also whenever you declare a change to your property (renovations or moving to a new home) or your family (getting married or separated). If you are not comfortable with your Broker, tell them – maybe they can fix the relationship; if not, then find someone you can trust.
- Report any proposed changes to your Broker – it’s important the pertinent information be disclosed to your insurance company before a loss occurs AND discussing proposed changes with your Broker can help to avoid unexpected charges or termination of coverage (for example, if your current insurer cannot insure your proposed changes you might have to find a new insurer or decide not to implement these changes after all).
- Make notes and confirm coverage in writing. Having good documentation will help you refresh your memory about conversations you’ve had about your insurance. Plus, you always want to protect yourself against a ‘he said, she said’ argument later on by having things confirmed in writing. If you do not understand what was written, get this clarified as soon as possible.
Thanks for reading my blog. Please know that it’s impossible to get all the information and details into a blog without overwhelming or boring the reader. If you would like additional information, please contact your Broker – how about a Founders Insurance Broker? 🙂