A simple GUIDE
TO HOME INSURANCE
Inside THIS GUIDE
What’s in this guide?...........................................................................5
Insurance 101.......................................................................................5
How insurance works.......................................................................6
Insurance lingo .................................................................................7
Types of insurance............................................................................8
How often should you review your home insurance policy? ........9
What’s in your home insurance package? .......................................10
What does your home insurance cover?..........................................13
How do we decide your claim settlement amount? .......................16
Facts about water damage ...............................................................17
Important information about sewer backup coverage .................18
How much coverage do you need?..................................................19
Home inventory how-to ................................................................20
How do we determine your insurance rates? .................................21
What did you think of this guide? ...................................................23
How to contact us ..........................................................................23
What’s IN THIS GUIDE?
The thing is, not a lot of people get excited about reading their home
insurance policy. In fact, insurance can be downright complicated with all
the fancy terms and jargon. We know there’s obviously far more exciting
literature out there; however, it’s still important to know what your insurance
policy covers.
We created this handy little guide to give you a better understanding of
your insurance policy and make it easy for you to find the most important
information. You can tuck it away, and bring it out when it’s time to change
your policy or make a claim. Whether you have home, mobile home, condo
or renters insurance, this guide is for you!
What’s not in this guide?
We’re giving you plenty of tips and advice on your insurance policy package;
however, because this guide is not an insurance policy or a binding contract,
you’ll still want to give your policy a good read.
An insurance policy can be a bit overwhelming, so don’t feel like you have to
read it all in one sitting. Read a little bit at a time, until you’ve made your way
through the whole document at least once. Then start again. We’re kidding,
once will do.
Insurance 101
Making a claim can be stressful, time consuming
and really isn’t the best time to start figuring
out your policy. That’s why you really should
know as much as you can about your
insurance policy before you ever have
to make a claim. Surprises are great for
birthday parties, not insurance policies.
There are different insurance policies for a
house, mobile home, condo or rental. Your
policy information will reflect the coverage you
purchased for the type of home you have.
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INSURANCE LINGO
Insurance companies like to use fancy words when talking about
your coverage.
Near the beginning of your home insurance policy wording booklet,
after the table of contents, you’ll find an interesting section called
“DEFINITIONS.” This section outlines some terms you’ll want to know
when reading your policy.
We’ve pulled some of the most common definitions you’ll come across
in the world of insurance. They’ll help you better understand your policy.
Where do I find my home policy wording booklet?
We gave you a copy of your home policy wording booklet when you first
bought your home insurance with us. After that, we’ll only send out a
new policy wording booklet when we’ve made changes to the wording
or if you request one. When you get your policy wording booklet, make
sure you put it in a safe place where you can reference it.
Premium: The money you pay in exchange for insurance coverage.
Deductible: The amount you’ve agreed to pay in the event of a loss—if
you ever have to make a claim. The standard amount with AMA Insurance
is $1,000 or $500, depending on the type of policy you have. You also
have the option to increase your deductible, which may help decrease your
insurance premium.
HOW INSURANCE WORKS
Insurance is there to help you get your life back on track and
replace your belongings in the event of a major loss. It’ll protect
you against sudden or accidental circumstances rather than events
that are predictable or preventable.
The insurance payments (premiums) of a whole bunch of people
(including you) go into a large pool and pay for the losses of a
few. That means there are always more people putting money into
the insurance pool than people making claims and taking money
out. When you have insurance and need to make a claim, you can
be assured there will always be enough money to help you.
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Endorsements and floaters: An endorsement or floater changes your
basic insurance policy wording by adding, removing or limiting coverage.
You can choose to do this or sometimes your insurance company may do
this to change the terms of your policy in special circumstances.
For example, your home insurance policy covers your jewelry or electronics
up to a maximum limit. However, if you have
a valuable jewelry collection or super
high-end electronic equipment in your
house that’s worth more than your
Why do we use deductibles?
policy limit will cover, a floater
Deductibles help keep annual insurance
will give you extra protection
premiums at a manageable cost for
for your stuff.
everyone because people who make the
claims help pay for their losses. Deductibles
also discourage people from making claims
for minor loss or damage.
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You can buy floaters for jewelry, electronics, tools, watercraft, collectibles
(such as fine art collections or sports memorabilia) and other belongings.
You can even get a floater to cover hearing aids and contact lenses.
Limit: The maximum amount your insurance company will pay out if
you make a claim. We outline the limits for your insurance policy on your
Personal Property Declaration page.
What’s your limit?
Your coverage limits depend on the type and level of insurance you
purchase (homeowner, mobile home, condo, renters) and how much it
would cost to replace your home and all your stuff in the event of a claim.
Loss or damaged not insured: These are the events or scenarios
that insurance doesn’t cover if you experience loss or damage.
In general, insurance doesn’t cover general wear and tear or deterioration
of your home.
Peril: An event, such as a fire, theft or vandalism that results in a loss—
damage to your property or belongings. This is also called a cause of loss.
TYPES OF INSURANCE
There are two different types of insurance coverage. It’s important to know
what type of coverage you have so that you know exactly what’s covered.
Insurance coverage is either All Risk or Named Peril. Coverage for each
works differently.
1. All Risk coverage is just like it sounds—you’re covered for all risks
(or perils) unless there’s a specific exclusion or limitation in your policy.
2. Named Peril coverage only provides insurance for those causes of loss
that are specifically named in the policy. If it’s not specifically included,
then it’s not covered.
What’s not covered?
Be sure to read the “LOSS OR DAMAGE
NOT INSURED” parts in your insurance
policy wording booklet. It’s just as
important to understand what isn’t
covered as it is to understand what is.
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We offer a variety of coverage levels, mixing and matching all risk and
named perils insurance. From very basic insurance with lower limits and
fewer scenarios covered to more comprehensive packages that offer higher
limits and cover more scenarios.
We sell three levels of coverage for your home, mobile home,
condo or rental:
Basic insurance
The name says it all. This is the most basic type of insurance you can
purchase. It’s a policy that covers your home and personal property
(contents) only for named perils (specific causes of loss).
If you have an Essential policy with AMA, you have basic coverage.
Broad form insurance
This type of insurance provides all risk coverage on your building, but
only covers damage to your personal property (contents) caused by a
named peril. If you have an Enhanced policy with us, you have broad
form insurance.
Comprehensive insurance
This type of coverage offers the best protection for homeowners or
renters—it’s also the most popular type of insurance we sell. It covers all
risks for your building and property. If you have an Excel or Exclusive policy
with us, you have comprehensive insurance.
HOW OFTEN SHOULD YOU REVIEW
YOUR INSURANCE POLICY?
It’s a good idea to review your policy once a year.
Every year we’ll send you an updated Personal
Property Declaration page as a renewal
offer. Take your time reviewing your policy
coverage and let us know if you’ve made
any major improvements to your property
(home renovations, a new garage, a
new art collection)—they may require
additional coverage. Additions such as
swimming pools or trampolines could also
change your coverage needs.
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What’s IN your HOME
INSURANCE PACKAGE?
Here’s a review of the documents you’ll
get when you buy a new home
insurance policy with AMA.
POLICY WORDING BOOKLET
This is one of the most important documents in your insurance package.
Your policy wording booklet, together with your Personal Property
Declaration page, is your binding insurance contract. Your policy wording
booklet describes what your policy does and doesn’t cover, the things you
agree to and the things your insurance company agrees to.
YOUR INVOICE
This one is pretty straightforward. It shows you how much you’ll pay for
your insurance, the dates of your policy term (typically one year), and
additional banking information that outlines your payment schedule if
you’ve chosen one of our payment plans.
APPLICATION FORM
This is a record of the information you provided to get your insurance policy.
If you purchase your insurance over the phone, we’ll send you two copies:
one to sign and send back to us, and one to keep for your records.
PERSONAL PROPERTY DECLARATION PAGE
Besides your actual policy wording booklet, this is the most
important document in your package. It’s a summary
of your insurance coverage and limits, packaged
in a quick and easy-to-read format. It also tells
you which coverage in the policy wording
booklet applies to you.
The policy wording booklet outlines a
wide range of coverage that can apply
to you, while the Personal Property
Declaration page is the checklist
of coverage you’ve chosen. This
page includes your property location
information, the policy term (typically
one year), your mortgage company, your
insurance premium and any discounts that
apply. It also lists any limits that may apply to
your policy and information about any endorsements
or floaters you may have on your policy.
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Does the Property Declaration page sound important? That’s because it is.
Any changes made to your insurance policy will appear on this page. We’ll
send you out a new Personal Property Declaration page every time there’s
a change. You’ll want to keep the current copy of this page on hand for
reference and as proof of insurance if you need it.
Where do policy changes appear?
If you invest $50,000 into a basement renovation,
you may need to increase your building limit coverage.
When you do that, the new coverage limit amount will
appear on your Personal Property Declaration page.
STANDARD MORTGAGE CLAUSE
This is a standard agreement between your
insurance company and your mortgage
lender that protects your mortgage
lender in the event of a major loss.
For example, if you happen to lose
your home in a fire and decide
not to rebuild or do something
that voids your insurance policy,
this agreement allows your
mortgage company to recover
the outstanding mortgage
amount on your home. This
is why your mortgage lender
requires proof of insurance when
you buy a home.
ENDORSEMENTS
AND FLOATERS
As outlined in our Insurance lingo section,
endorsements and floaters change your basic insurance policy.
You’ll find policy wording for the most common types of floaters in the
back of your insurance policy wording booklet. If you’ve purchased a floater
that isn’t listed and described in the back of your wording booklet (most
common ones are), we’ll include that wording as a separate document in
your insurance package.
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WHAT DOES YOUR
HOME INSURANCE cover?
There are a lot of details in your home policy wording booklet. That makes
it even more important that you take the time to get the whole scoop on
what your home insurance does and doesn’t cover. This booklet covers the
basics for you and offers a starting point to understanding your policy. If
you have any questions along the way, we’re always just a phone call away.
Here’s what a typical home insurance policy covers:
THE BUILDING
Applies to home and mobile home insurance
This is your actual home. Your insurance protects
the physical structure and interior finishes of
your home from loss or damage, including
your roof, exterior and interior walls,
flooring, kitchen cupboards and
bathroom fixtures.
What about condo owners?
Your condo association is responsible
for buying insurance coverage for
the building, but you need to look
after the interior of your unit. Your
condo policy protects improvements or
renovations made to your condo, such
as installing new flooring or updating the
kitchen cupboards—pretty much anything
above the original condo specifications.
PERSONAL PROPERTY
Applies to all home insurance policies
(home, mobile home, condo and renters)
This is also called contents coverage. This provides coverage for
your personal belongings including clothing, electronics and furniture.
This part of your insurance also covers damage to your landscaping up
to a certain limit.
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DETACHED PRIVATE STRUCTURES
Applies to home and mobile home insurance
This part of your home insurance policy covers
structures that aren’t attached to your
home, including a detached garage
or a shed.
ADDITIONAL
LIVING EXPENSES
Applies to all home insurance policies
(home, mobile home, condo
and renters)
This covers expenses associated with
living elsewhere if something covered in
your policy (such as a house fire) makes your
home unfit to live in or if you have to move
out during the repair process or in the event of an
evacuation. An example is the cost of staying in a hotel.
It’s important to remember this coverage doesn’t reimburse you
for all expenses—just ones that are over and above your normal cost
of living.
ADDITIONAL COVERAGES
Applies to all home insurance policies
(home, mobile home, condo and renters)
There are a lot of other things that may be covered by your policy, such as
fire department charges, identity theft expenses and food spoilage. Condo
insurance policies also provide coverage which protects you if your condo
association needs to collect a special assessment from owners if they don’t
have enough insurance to cover a loss to the common property owned
by the condo association. Check out this section of your policy wording
booklet to get all the details for your type of insurance.
WHAT’S NOT COVERED BY YOUR HOME INSURANCE POLICY?
When it comes to insurance, there are some misunderstandings. Insurance
is meant to cover damage that is sudden and accidental. It won’t cover
every problem you encounter and it’s not a maintenance contract.
Each section of your insurance policy has a part called “LOSS OR DAMAGE
NOT INSURED,” which outlines scenarios that aren’t covered by your
insurance policy. You’ll want to read through this information so there
are no surprises if you have to make a claim.
LIABILITY
Applies to all home insurance policies
(home, mobile home, condo and renters)
Liability coverage provides worldwide financial protection if you’re
found legally responsible for unintentional injuries to other people or
damage to their property. For example, if a delivery person slips on your
sidewalk and is injured, your liability coverage would offer protection from
any related expenses. There are no deductibles associated with your home’s
liability coverage.
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How DO WE DECIDE YOUR
CLAIM SETTLEMENT AMOUNT?
We look at a few different things. If you have a claim,
depending on the level of coverage you purchased,
we’ll determine your settlement amount based
on guaranteed replacement cost, replacement
cost or actual cash value.
Guaranteed replacement cost
Guaranteed replacement cost,
which is the most comprehensive
option, only applies to the building.
If your home does experience a
loss or is damaged and you meet
the requirements of our Home
Replacement Cost Guarantee,
guaranteed replacement cost coverage
ensures your home will be repaired
or replaced to its original state without
deduction for depreciation. One thing to note:
guaranteed replacement cost is only available with
comprehensive insurance policies.
Guaranteed replacement cost example
If we’ve estimated your home will cost $300,000 to rebuild
and it ends up costing $320,000, guaranteed replacement
cost means we’ll pay the extra amount.
Replacement cost
If you have replacement cost coverage and experience a loss, your building
or property will be repaired or replaced without deduction for depreciation,
up to the limits on your policy.
Facts ABOUT WATER DAMAGE
Weather can be tricky. In fact, over the past few years, the weather in the
Prairies has become more extreme, particularly during the summer hail and
rain season. We’ve seen an increase in property claims during these months
which has raised a lot of questions about what kind of water damage is
covered by a home insurance policy.
It’s important to know that overland flooding, which happens when water
overflows onto dry land and causes damage, is generally not covered
by residential property insurance policies in Canada. Why not? Because
insurance companies would have to charge more than most individuals
could afford in order to maintain a healthy enough money pool to cover
damage associated with flooding.
WATER DAMAGE – WHAT’S COVERED?
Some types of water damage typically covered by home insurance
policies include:
• Damage
caused by indoor plumbing, heating, sprinkler or air conditioning
emergencies are usually covered, as long as the damage isn’t the result of
a long-term problem such as repeated leaking or condensation. The cost
of repairing the original problem isn’t covered.
• Damage
caused by the malfunction of appliances such as washing
machines, dishwashers, waterbeds or aquariums is usually covered,
although the cost to repair the appliance that caused the problem is
usually not covered.
• Damage
from a broken water main, which covers the escape of water
from a public water main whether it occurs in or outside your home.
• Wind
and hail damage to your home’s exterior, interior and your personal
property. Damage to your home’s interior has to be from water entering
through openings created by wind or hail.
Actual cash value coverage
If you have actual cash value coverage and experience a loss, your
settlement will be subject to depreciation and will only pay the actual
cash value of the loss.
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Sewer backup damage
adds up fast
WATER DAMAGE – WHAT’S NOT COVERED?
When it comes to water damage, here’s what your insurance policy
doesn’t cover:
If you have sewer backup coverage,
here’s what’s covered:
• Basement
• Damage
seepage (water from below the surface of the ground through
your foundation walls, basement floor or windows).
• Damage
•A
to the outside of your house caused by melting snow or ice.
leaky roof due to preventative wear and tear.
• Damage
resulting from the freezing of indoor plumbing if damage
happens while you’re away and you didn’t have someone check on
your home.
IMPORTANT INFORMATION ABOUT
SEWER BACKUP COVERAGE
Sewer backup is the backing up or escape of water from a sewer, sump
or septic tank. Condo and renters insurance policies include sewer
backup coverage. AMA home and mobile home insurance policies offer
sewer backup as add-on coverage. Because sewer backup coverage is so
important, we automatically add it to most home and mobile home policies
and give our customers the option to remove it.
Sewer backup coverage limits depend on the type of policy you have and
factors such as where you live, the risk of sewer backup in your area and
whether or not you’ve had previous sewer backup claims.
Home check-in
If you’re away from your home for more than four consecutive days
during the regular heating season (when you’re typically running your
furnace), AMA policies require you to either drain your pipes and turn off
your water or have someone check your home every day. If you’re away
from your home during the non-heating season, it’s a good idea to have
someone check on your home regularly.
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caused by sewer backup, which
is the backing up or escape of water from
a sewer, sump or septic tank.
The average claim to get a
minimally developed basement
back to normal after sewer
backup is about
$15,000 for emergency
cleanup and restoration.
Here’s what’s not covered:
• Damage
caused by sewer backup (the backing up or escape
of water from a sewer, sump or septic tank) if the damage is a direct result
of overland flooding.
Homes have changed a lot over the past 20 years. Basements that once
stored canning and holiday decorations now house modern furniture and
high-end finishes and electronics—all of which can be costly to replace if
water damage occurs.
We encourage you to do a quick basement inventory to ensure you
have the right amount of sewer backup coverage for you and your
family. Depending on your policy, you may be eligible to purchase
additional coverage.
HOW MUCH COVERAGE DO you NEED?
It depends on how much it would cost to rebuild your home and any
buildings on your property—such as a garage or shed—and replace
everything you own (clothing, furniture, electronics, etc.). Your insurance
advisor will ask you several questions about your home and belongings to
help determine the level of coverage you’ll need. Our goal is to make sure
you’re well protected.
Home and mobile home insurance policies include a set amount of
coverage for personal property—a percentage of your building’s value,
which is typically enough coverage for most people. With a condo or
renters insurance policy, you’ll need to have a good idea of how much it
would cost to replace everything you own in order to help an insurance
advisor determine your coverage limit. Remember to ask your insurance
advisor about extra coverage for special collections or high-priced items
such as jewelry.
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Home Renos Matter
Home renovations add to the value of your home. If you’re doing a
major kitchen, bathroom or basement renovation, make sure you tell
your insurance advisor, who may suggest you get additional coverage.
This includes improvements to things such as flooring, countertops
or cabinetry.
HOME INVENTORY HOW-TO
It’s a good idea to create a home inventory list. This will help you determine
how much personal property coverage you need for a condo or renters
policy. And no matter what kind of home you have, it’ll help you keep track
of items you’d need to replace in the event of a claim. Here’s how:
1. Create a spreadsheet or use one of the software packages already
available—it’ll make the job easier. The Insurance Bureau of Canada
recommends knowyourstuff.org
2. Inventory one room at a time. List every item, the price it would cost
to replace it and the date purchased. Include the brand, model numbers
and serial numbers (if possible), along with today’s replacement cost.
3. For a visual record, photograph or video record your stuff.
When you’re done, make copies of your inventory documents, photos and
video and keep them in a safe place outside your home—at a friend’s or
family member’s place or in a safety deposit box. Keep your own copy and
update your inventory at least once a year.
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HOW DO WE DETERMINE
your INSURANCE RATES?
It’s based on two guiding principles: how likely it is that your home will
suffer a loss and how much it’ll cost to repair the damage and get you back
on track after a claim. With those principles in mind, here’s a look at some
key factors that help us determine how much you’ll pay to protect your
home and all the fun stuff in it.
Where you live
Whether you live in a rural or urban area, homes in some areas are
statistically more likely to experience loss due to crime (burglary, theft and
vandalism), water damage or sewer backup (flood risk areas) and serious
weather-related events (wind and hail). How close you are to a fire hall also
plays a role.
Age of your home
If you have an older home, you’ll likely pay more for insurance because
there’s a higher likelihood that your roof, plumbing or electrical systems
will encounter problems. Renovations or upgrades to these systems
or the overall condition of a home can help you save
money on insurance premiums.
How you use your home
Whether you live or work at home
can affect your policy. Having a homebased business may require more
coverage for things such as office
equipment and inventory as well as
liability coverage if you have staff
or customers visiting your home.
If you rent out space in your home,
having tenants will require you to
purchase more coverage.
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What kind of home you have
If your home has more than one contained unit (such as a basement suite)
or more than one family living in it, it could be considered a multi-family
dwelling. In that case, there will be more stuff to cover and
a greater likelihood that a claim will be made. If
you live in a small townhouse versus a large
bungalow, insurance rates will differ
based on the size of your home and
costs for potential repairs.
How you heat your home
Homes with a wood-burning
heat source cost more to insure
because there’s an increased risk
of fire.
How much coverage you need
Most insurance companies offer
different levels of protection for
your home and belongings so your
individual needs will help determine rates.
Some people may want only basic coverage
while others will need more comprehensive coverage
for their home.
WHAT DID you THINK OF THIS GUIDE?
Be honest. Did you read it? Was it helpful? Is it something you’d keep
on hand for future reference or show to friends and family? We’d love to
know how we could make it better.
If there are other things you think we should include in or remove from this
handy little book for the next time we print it, please send us an email at
[email protected]
HOW TO CONTACT US
Our insurance advisors are standing by and ready to tell you more about
your policy. If you have any additional questions, you can visit any AMA
centre and one of our knowledgeable insurance advisors will be happy
to assist you. Or, just call us at 1.800.615.5897.
How many claims you’ve made
We realize that things happen, but staying claims-free will help reduce
your insurance premiums.
Cost of your deductible
Increasing your deductible (the amount you agree to pay in the event
of a claim) will help reduce your home insurance rates. Your insurance
premium increases after a claim because we want to be fair to all
policyholders. We reward those policyholders who have not had a claim
with our Claims Free Discount. If you’ve had a claim, the discount no longer
applies and your premium goes up as a result, typically for five years. Also,
policyholders who have had a claim are statistically much more likely to
have another claim and therefore are considered riskier than policyholders
who have never had a claim.
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“There
WHEN you
NEED US.”
If you have any questions about your
home insurance policy, please call us.
We’ll be happy to review your policy
with you, make suggestions and ensure
you have the best coverage for you and
your family. To speak to an insurance
advisor, you can call us or visit us at any
AMA centre.
Insurance Sales & Service
1.800.615.5897
Making a claim
It’s not easy to remember what your insurance does
and doesn’t cover. If you’re ever in a situation where
you’re unsure about whether to make a claim or not,
we’ll give you the guidance and support you need.
24-Hour Claims Service 1.888.426.2444
AMAInsurance.ca/Home
HBHOME 100M 02/15 188621
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