Property insurance should cover it all

Every day, we see and hear about house, apartment and garage fires, house break-ins and accidents across our town and floods and disasters around the world.

I personally know two local families who have lost their houses and all the contents to fire in the last two years, and we regularly sail past three cottages that have burned to the ground on Lake of the Woods.

My point?

Make sure your insurance is accurate, comprehensive and has enough total insured value to replace or rebuild what you own. A complete loss can occur, which would be devastating. Being uninsured for some or all of that loss would be catastrophic.

Take a photo or video inventory now of all your contents to facilitate claims, and store this safely away from your house.

Check your policy: A recent survey by TD Insurance found 19 per cent of Canadians had failed to be completely truthful or had omitted information on their insurance applications. Since I was scooped on this by fellow columnist Garry Marr in Thursday's Free Press, I will simply beg you to make sure you have revealed everything honestly in your insurance applications, or be prepared to have a claim denied.

Educate yourself about property and casualty insurance and engage a thorough, competent insurance broker to help you make sure your coverage is complete. This is their area of expertise, not mine, but make sure you have full replacement value on all structures and contents, comprehensive form insurance rather than "broad," and adequate total insured value to rebuild your house or cottage at today's high construction costs. You want "all-perils" coverage on buildings and contents, rather than "named perils."

Be clear on what is really covered and any limitations or exceptions, such as for flood or water damage. Some policies require you to rebuild after a loss; others will pay you cash instead, if that's your choice.

Maximum insured value has become critical with today's high construction costs. Many old policies have maximum insured values that are no longer adequate. For example, $200,000 for a certain house may have been plenty 10 years ago, but it might cost $300,000 or more to rebuild the same house today. Don't be caught short.

For personal items and contents, make sure you have replacement-value coverage. Valuable individual items such as jewelry, fine art, furs or collections should be appraised and listed, as they often exceed the limits on the basic policy. Again, a convenience is a cash option rather than replacement.

There are premium discounts for a variety of things, such as being mortgage-free, having a monitored alarm, proximity to a fire hall and being claims-free. Raising your deductible also decreases your premiums.

After your insurance policy review, take some quick steps to protect your house and cottage from disaster by taking some simple precautions.

The 10-minute inspection: Grab a notepad and take a walk in and around your house, apartment, condo or cottage.

Check batteries in all smoke and carbon monoxide detectors. Install both -- they protect you, and usually result in a discount on your insurance premiums.

More than half of fires start in the kitchen. Check for flammables such as towels near the stove. Don't cook in loose clothing. If you deep-fry, consider a fryer with a safety thermostat.

Is your wiring up to date, and all extension cords or similar items in good repair? Are the eavestroughs, downspouts and sump-pump hose all clear? How's the roof?

Have your furnace and heating system checked regularly and ducts cleaned. It's good for your personal ventilation as well.

Are all pesticides, paints and other poisonous materials locked up securely? That's the only protection from inquisitive neighbourhood children.

Check for any other hazards such as rotting wood on decks, steps or docks, cracked concrete or other dangers to postal carriers or visitors.

These and other common-sense steps -- as well as full disclosure on all insurance applications -- can save you from disasters and ensure you have protection if something bad happens.

As the Scouts say, be prepared.

David Christianson is a fee-for-service financial planner with Wellington West Total Wealth Management Inc., a portfolio manager (restricted).

dchristianson@wellwest.ca

Republished from the Winnipeg Free Press print edition July 13, 2012 B7