Buying Your First Home? Then Protect It!



Buying your first home in Toronto is an exciting time.   It’s a big investment for most of us and we certainly want to make sure we keep it updated and protected.

Now this is a subjective statement, but I will bet that 95% of homeowners do not know what is and what is not covered by their household insurance policy.

How you got your homeowner’s insurance was that your mortgage provider informed you that you must have coverage and so you went to an insurance broker and told them you needed a policy.   So they provided you with 3 quotes and you picked the cheapest on.  Sound about right?

Now household insurance is pretty encompassing, however what I really want to focus on is not on the fire, theft or liability components but on weather related coverage…specially the damage caused by sewer back-up.

The reason I want to talk about this is that I have had first hand experience with sewer back-up and it is something which every homeowner should be cognitive of.

It was July 15, 2012 when my little east end Toronto neighbourhood of 1,400 homes was hit with 88mm of rain fell in 2 hours.  In that short period of time my 200+ homeowners were left with substantial water in our basements from sewer back-up.

Sewer Backup

Sewer Backup

As you can see it left quite the mess.

We all realized that this was a serious situation and we all started making calls to our insurers. The key here was that many found out that not all insurers are equal.

When we emerged from our homes many us who had our basements destroyed started to talk about the damage and our individual insurance coverage.

As neighbours compared insurance policies, some found they did not have coverage while for others who did have coverage it was very limited.  The individual coverage ranged from $0, $10,000 to $25,000 plus.

I was fortunate to be one of those with $25,000 in sewer back-up coverage.   This was exactly what I needed as you can see from the remediation, rebuilding and contents replacement:

  • $5,000 Remediation which was the removal of flooring, drywall, disinfecting and drying
  • $9,000 Repairing the basement to exacting the same condition as before the back-up
  • $9,500 Replacement of damaged personal property which included furniture, washer, dryer, freezer, electronics and other personal items

As you can see the costs can add up quickly.  I was also fortunate that my furnace did not get damaged as I would have put me over on my coverage limit of $25,000

So pulling out your insurance policy and checking your coverage might save you a lot of grief in the future.