July 12, 2012 by Canadian Underwriter
Albertan and British Columbian homeowners may not be getting the right home insurance protection, with many being offered named peril and broad-form policies in situations in which a comprehensive policy would be more appropriate.
Square One Insurance Services Inc., which specializes in home insurance, talked to 2,800 residents in Alberta and B.C. over the past 10 months and found that a “shocking” 21% of them do not have the right home insurance protection.
“Ironically, those who have been loyal to the same home insurance provider for more than five years are most at risk of being improperly protected,” says Daniel Mirkovic, president and CEO of Square One.
In some instances, home insurance providers are offering named perils (fire or lightning, explosion, smoke, vandalism, theft, hail and some types of water damage) and broad-form policies (which offer comprehensive protection on buildings and named perils protection on personal property).
Mirkovic says these options are appropriate only if a person has a higher-risk home that does not qualify for a comprehensive (or all-risk) policy.
Square One recommends a comprehensive policy to avoid being blindsided in the event of a claim. These policies protect against all loss types except those specifically excluded in contract wordings — for example, damage due to wear and tear, snow slide or landslide, acts of terrorism and war.
Square One reports the cost of upgrading from a broad-form policy to a comprehensive policy can be as little as $15 annually for a condo owner or renter, and $35 a year for house owner.