In the aftermath of a serious event like a fire, burst pipes, or theft, it is always comforting to know that your home, condo, or renter’s insurance is there to help you recover. But what if you discover your valuables are not as protected as you thought they were?
Bow Valley Insurance of Calgary has been covering Canadians for over 34 years. An independent broker representing the products of 15 national providers, we want you to be confident that you know exactly what you are getting for your payments.
It is very important to keep in close contact with your insurance provider about any major changes, and home and auto insurance renewal time is a great opportunity to keep your coverage up to date.
Home Insurance: Actual Cash Value
The two most common coverage options for possessions and property are “Actual Cash Value” and “Replacement Value”. There are key differences between the two.
With an actual cash value policy in place, after you pay your deductible, the insurer arrives at a fair market value for the actual current cash equivalent of the damaged item. So, you will not receive a cheque to purchase a brand-new recliner for a 10-year-old armchair with this sort of coverage. The determined fair market value of your favourite old chair may be less than you think, so you could end up in negotiations over how much your possessions were actually worth.
Home Insurance: Replacement Value
This approach is just like it sounds. You will pay more up front for your premiums with replacement value coverage, but after paying your deductible, in return you get a promise that your damaged valuables will be replaced with new equivalents.
Fortunately, in Alberta, for your home’s actual structure, replacement value coverage is mandated. Because of this you won’t find yourself coming up short between the actual replacement cost and the assessed fair market value of your destroyed home. Replacement value coverage for your possessions is especially encouraged over an actual cash value policy if you own things that are difficult to replace at any price, such as heirloom quality furniture, expensive cookware, high end appliances and late model computers.
Inventories, Limits and Riders
No matter what style of coverage you choose, it will have a cap on payment based upon the policy value you purchased. Both actual cash value and replacement cost insurance have limits for high value possessions, such as jewellery, firearms, or collectibles such as rare books and vintage electric guitars, or unusually expensive individual items, such as carbon-fibre framed bicycles or pieces of art.
Ask your provider about these limitations, or outright exclusions. A rider that either raises the value limit for the category, or explicitly insures the valuable in question, may be a good idea. Finally, periodically take a video of all your possessions and home improvements and store that video in the cloud or off premises somehow.
If you haven’t taken stock of your homeowner’s insurance coverage needs, now is the perfect time for an assessment. If you have made any improvements to your home (such as adding a deck) or to your vehicle (such as putting in a sound system) be sure to let your provider know about the added value to your home or vehicle.
Auto Insurance Renewal
Of course, you are required to let your auto insurance provider know when you purchase a new car, as the type of vehicle you drive is a factor in how your premiums are determined.
Also let your provider know if:
- You have moved. A change in address to a safer neighbourhood may mean savings.
- You are driving a significant amount more or less than you used to.
- You have changed jobs. Many occupations are eligible for discounts.
- Discover more ways to save on your auto insurance.
Renewal time is a great opportunity to review your insurance and make sure it works for you and your circumstances. Compare your current coverage with what Bow Valley can offer. Try a free quote today, and combine your policies to save!