Mythbusters!

Don’t get too excited now, we’re not about to blow something up or test the law of physics to the extreme. I do envy Jamie Hyneman and Adam Savage though.  Dream job.  Really!I'm just hoping to get your attention.But there are some things people should remember when it comes to insurance. Some common misconceptions or assumptions.What I am about to reveal to you won’t be as exciting as Jamie and Adam blowing up this water tank in a “home”.  Check the video out. (I’m not sure if this would be covered on your house insurance)  Mythbusters Water Heater ExplosionLet’s dispel some myths about insurance.Here’s the big one we come across:  Wear and TearSo I rent; I don’t have the responsibilities that come with owning a home.   When the roof ages, I don’t have to worry about replacing it.  If the furnace breaks down, I don’t have to replace it.  If the hot water tank leaks because of its age, I don’t have to replace it.Neither does your insurance company.  This is wear and tear and insurance is not a home maintenance program.Remember that:  Insurance is not a home maintenance program.So if you know that your roof is old and you’re just waiting for the next big wind storm to take care of things, (not that YOU would do this but  ...) you might be in for a big shock and surprise.What insurance does cover is damage to your property from an   “unexpected occurrence” or peril.  Like lightning and fire.Let’s go back to the hot water tank.  Your water tank gives out suddenly.  You have a finished basement.  Then the damage the water causes to the flooring or personal property may be covered, but not the water tank.Here are some other common assumptions people make:

1. Insurance doesn't cover Acts of God. Well, I don’t know if I can blame God for damaging winds or lightning strike, but these are typically covered.  What is not covered automatically is earthquake and overland flood.  You can purchase earthquake and overland flooding is starting to be offered.
2. Be careful about jewellery. Many companies have a limit or a ceiling on how much they cover for jewellery.
3. Seepage: Does your basement leak because of a weakness or cracks in your foundation.  That’s a maintenance issue and insurance does not cover that.  Nor will it cover any damage to your home and contents from the water that is coming from a crack in your foundation.
4. Running a business in your home? You liability does not cover you. You need the proper insurance for that.  Nor does it cover stock, equipment or products related to that business.

Word of warning:  your insurance company may not be very happy with you if you did not disclose that you are running a business in your home.

5. Vehicles stored in a garage. Your house insurance does not cover your vehicle in the event it’s destroyed from a fire from your home.  All vehicles, be it ATV’s, motorcycles,  are excluded under house insurance.  Your car insurance covers that, IF you have the Comprehensive coverage.
6. Do you have outdoor pool? Be very aware of what coverage you may or may not have, especially in terms of damage from ice or weight of snow.  You may not be covered.
7. Contractors on your property? Be sure you ask for their certificates of insurance and insure they have liability. Don’t assume they do.  It speaks to their credibility and if there is a problem with their work
8. “My home is insured or should be insured for its market value.” A home is insured for the cost to rebuild it, not the cost to sell it.
9. “If my neighbours tree falls on my house …” Okay, now this can be tricky and very company specific but in general:
10. If your neighbours tree falls on your house, your house insurance pays for the damage. They may go after your neighbours insurance, called subrogation.
11. Your tree falls on your neighbours house. Same thing, the reverse.
12. Your own tree falls on your home. No brainer there, but then there is the issue of removing the tree.  In all of these scenarios. If you have trees on your property, or next to your property, best to contact your broker to see how your policy will respond.

These facts may not be appetizing when it’s realized what insurance does not cover, but it’s a far better thing to be educated and be proactive than to be sorely disappointed in the event something happens.Can you think of anything else that you've always wondered about insurance?  Ask away! We want to hear from you!Note:  Please be sure to contact your broker if you have questions about your own policy as the information in this blog has been simplified and is not intended to reflect all insurance companies and their policies.