As the most inclusive home insurance policy, comprehensive covers both the building and its contents for all risks, except for those specifically excluded. Two types of risk that are not normally included in any home insurance policy are:
- Uninsurable perils are predictable events that are not covered
- Optional coverage for which you can buy insurance, such as earthquake or sewer backup.
The insured perils included in comprehensive and other policies include coverage for aircraft or vehicle impact, fire, lightning, theft and window breakage.
If you live in a condo/strata or mobile home, you require customized insurance for your property type.
Basic or Named Perils
If you want to save money and carry the financial risk of some losses yourself, consider a basic or named perils policy. This policy covers only those perils that are specifically stated.
If a comprehensive policy costs more than you want to pay and a basic or named perils policy isn’t suitable, a mid-priced compromise is the broad insurance policy. This policy provides comprehensive coverage on the big-ticket items, such as the building, as well as named perils coverage on the contents.
Some insurers offer basic or no frills coverage for properties that don’t meet normal insurance standards. If there are physical problems with your home that keep it from meeting the standards set by insurers, you may save money in the long run by correcting these problems to qualify for better coverage.
Whether you own or rent your home, you can be held liable for bodily injury or property damage unintentionally caused to others. Your home insurance’s personal liability portion provides coverage if such an event occurs on your property or anywhere in the world.
For example, if a visitor slips on a snow-covered walkway on your property and is injured, you may be held legally responsible. If you’re found negligent, your personal liability coverage would cover the damages resulting from the injury up to the coverage limit. Liability coverage does not apply to injuries sustained by you or members of your household.
In addition to the home coverage types described above, insurers may use trademarked product names to describe home insurance packages.