Gordon Powers

What kind of policy do I have?
It depends on the type of home you live in. If you own a house, your property insurance will cover the house itself and detached structures like a fence or shed.

Your policy will also cover your personal belongings such as furniture, computers and artwork, providing you document their value. Some policies set a maximum they will pay to cover certain items including jewellery, tools and bicycles.

In addition, your policy also includes something known as third-party liability coverage. This protects you against personal liability if somebody is injured while on your property or, for instance, if a tree in your yard falls and damages your neighbour's roof.

* Tool: Get a home insurance quote

Am I covered for the full replacement cost?
One of your biggest policy decisions is whether you want the coverage to account for the actual contents of your home or simply a set dollar amount.

If you have replacement cost coverage, your insurance will cover the full cost to buy a new item at today's value. If you do not, then depreciation will be factored into the amount you could expect to receive.

It is important to have adequate coverage on your property, so be sure you accurately estimate and cover your home's replacement cost, namely the cost to rebuild or replace your damaged building.

The land under your house isn't at risk from theft or fire, however. So it may not be necessary to include its value in deciding how much insurance you require. If you do, you will likely pay a higher premium than you might really need.

Insurance policies have strict requirements that require you to back up your claim with proof. When filing a loss claim, you're expected to provide a complete inventory of items you have lost, along with their current value.

How are my particular rates determined?
The rapidly changing makeup of home insurance rates means that finding the right company at the right time may be the best way to save on insurance costs.

Most companies use an evaluation system that considers the square footage of your home, when and how it was constructed, as well as features and finishes that might add value.

Companies also rate your property according to a number of risk factors, which may include things like construction materials and electrical service, the age of your home, whether or not you actually live on the premises and the general neighbourhood.

If you live in an area that has a greater record of theft or fire claims, for instance, you may pay more for your coverage than someone in a comparable house in a different location.

In determining the cost of your policy, insurers may also consider the presence of any safety features, like third-party burglar alarms, deadbolt locks, smoke detectors, and fire extinguishers.