Commonly overlooked aspects of home insurance

By HUB SmartCoverage Team on September 14th, 2017

Being a first time home owner can sometimes be an overwhelming experience with everything a new home owner is expected to learn. From home repairs to maintenance to insurance, the list is endless and it's perfectly natural to miss a few details.


With that in mind, here are some commonly overlooked details that could be of great interest to someone in the market for a home insurance policy.


Escrow accounts


Escrow may look like a made-up Scrabble word, but it's actually a very important term in the home insurance lexicon. An escrow account is essentially one that combines mortgage payments with property taxes and/or home insurance payments. It takes payments that may be typically made on an annual basis, and ensures they are automatically paid on a monthly basis.


Depending on the type of mortgage one negotiates, an escrow account could be deemed necessary by the lender. If it is up to the buyer, making a case for an escrow account really centres on the convenience of having payments managed by a third party. However, because there is a middle man involved, this does result in higher than normal payments.




A home insurance policy typically covers property loss, however there is no guarantee you will be fully reimbursed for the loss. Insurers set limits on how much property compensation a home owner can claim in the event of a theft or unpredictable incident.


This means that in order to get full value on your valuables, you'll need to take out riders drawn up specifically for them. A rider covers valuables such as jewelry, artwork, collectibles, instruments, heirlooms, etc. Riders are priced fairly reasonably, where a home buyer can expect an annual payment of approximately less than 1% of the item's full value.


Flooding and water damage


The terrible flooding in Québec and the recent devastation of Hurricane Harvey have been a stark reminder of the importance of being prepared for water-based damage. Flooding tends to get the most headlines, because it generally comes on the heels of a natural disaster, but water damage can be comparably difficult to replace.


In either case, people sometimes make assumptions about their coverage and end up surprised when they're told their damage is not covered. A standard homeowner's policy will cover tornadoes, hurricanes, and wildfires, but flooding is a notable exception. This exception also applies to sewer backups and sump pump failure, which must be purchased as an additional coverage.




Home insurance policies will typically cover a limited amount of personal liability coverage, and additional coverage can be purchased if the homeowner has the likes of a pool or trampoline on their property. However, a homeowner must be aware the additional coverage may not cover payments should someone become seriously injured while on your property. Lawsuits, for example, are typically not covered under personal liability coverage.


Injuries can happen in the most ordinary of ways. Whether it's a dog bite, a fall down the stairs, or something entirely out of the blue, accidents happen to even the safest of people. By adding additional extended liability coverage a homeowner can protect themselves for the unforeseen.

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