Do you have the right home insurance?
On the upcoming anniversary of the 2013 flood in Calgary, a news story has broke that shows many Albertans are on the hook financially for the losses suffered during the flood.
Three years after the devastation of the southern Alberta flood, a new insurance company report says most Canadians are not ready for severe flooding. As a result they could be on the hook for significant financial losses.
The flood in 2013 caused an estimated $6-billion dollars in damages and forced 100,000 people from their homes, mostly in Calgary and High River. [News Talk 770]
If you’ve still not done so, it is advised that you contact your insurance company to see if you’re covered for flood overland insurance, as most companies offer it now.
How does home insurance work?
- Insurance companies estimate an annual premium that will cover the risk of your home, the premiums are based on how much your insurer will need to pay for future claims.
- For assuming the risk on your behalf, your premium will be paid by you either monthly or annually.
- Your paid insurance premiums are put into a pool, along with the other paid premiums. Pools operate for one year with the insurance company.
- Your insurance company will use that pool of premiums to pay for losses of the people who make claims in that year.
What should you know when choosing an insurance plan?
A responsible and profitable financial plan is all about asking the right questions so you can make informed decisions. Of course, working with a professional will always make this process go a lot smoother. So here’s some crucial questions you can ask your insurance representative, when looking into home insurance:
- What does my policy cover?
- Is there a specific kind of insurance for the type of home I live in (e.g., house, condo or apartment)?
- Are there risks I can’t buy insurance for?
- What optional coverage is available?
- Should I make a claim for every loss?
If you’re looking for more information on home insurance and how to better educate yourself on it, you can visit the IBC website here. If you have financial questions about homebuying or home insurance, I’d be happy to share my knowledge and resources with you, so feel free to contact me.
