Purchasing Insurances Packages For Your New Home
There are different types of insurance packages available to home owners depending on your specific situation and needs. It can be tricky to understand exactly what is included in coverage, and what is not.
At Blackburn Lawyers, we will review your insurance agreements to make sure your interests are protected. Based in Richmond Hill, Ontario, our goal is to make sure you understand what protections you are paying for.
Home Owner’s Insurance
You must purchase the insurance that is appropriate for the property you are purchasing. If you are buying a freehold property it will be referred to as home owner’s insurance. It will protect you from loses resulting from certain damages to you home, theft of contents or liability if someone is injured. If you have jewellery, collections or hobby equipment you may additional coverage to full protect the value of these possessions.
If you are going to rent out your home you will need a special insurance for properties with tenants. Insurance policies are very complex and should be reviewed in detail with your insurance broker. You will get the best rate if you insure your home and vehicles with the same company. In the case of a freehold property, if you have a mortgage or secured line of credit the lender must be named in the insurance policy. Your lawyer will require proof of home owner’s insurance when a mortgage is to be registered on your property.
Condominium Owner’s Insurance
If you are purchasing a condominium you will also require condominium owner’s insurance. Even though the structure is insured by the condominium corporation, the interior of your unit will require your own insurance. In addition, it will protect your contents and provide you with liability coverage.
Mortgage Insurance and Disability Insurance
These insurance packages are generally offered by most major banks. The purpose of this type of insurance is to pay off your mortgage in the event of the death of an insured party, or to make payments in the event an insured party is disabled and unable to work. If you are considering this type of insurance I recommend you shop around as you may find a life insurance company that offers a better premium or you may decide term insurance is adequate to provide the protection you desire.
With bank issued mortgage insurance it is only the particular mortgage you have that would be paid off by the insurance proceeds. If in the future you became uninsurable you would not be able to change your mortgage company and retain the protection of your mortgage insurance.
I will only mention this briefly to ensure you don’t think it protects you in anyway. When you purchase this insurance, you receive no protection. It is designed only to protect your bank. If you are unable to make your mortgage payments and the bank takes your property away from you and sells it and in the process, they lose any money the lost will be repaid to the bank by this insurance and the insurance company will then come after you to collect payment of the sum it paid to the bank.
This insurance is mandatory if the mortgage you are arranging is for more than 80% of your purchase price. You must have a down payment of at least 5% of your purchase price to obtain this insurance. The amount of the premium and sales tax will be added to your mortgage debt and you will be charged interest on that sum until the mortgage is paid off.
I believe it should be purchased by all home purchasers.
For More Information, Call Blackburn Lawyers
You can reach us by phone at (905) 884-9242 or send us a message via email.