Why is it important to read your policy carefully?

Home insurers are very competitive and there can be many differences from one policy to another. While this makes it easier to shop for the policy that most closely meets your needs, it does mean that you should read the text carefully and ask for clarification if there’s anything that you don’t understand. When you read an insurance policy, you’ll want to know:

  • Who is covered?
  • What property is covered?
  • What “perils” are covered? A peril is an event that can cause damage – an event such as fire, theft or wind. Even riot is a peril!
  • What is excluded? Exclusions may apply to the persons who are covered, the property covered, the perils insured against, or the location where coverage applies. Not every circumstance can be covered by an insurance policy. Normal wear-and-tear and deterioration of property is not insurable; you should check your policy for other exclusions.
  • What extensions of coverage are available? Often called “riders”, “forms” or “endorsements”, some policy extensions are automatic, while others are optional and/or conditional.
  • What are the conditions of coverage and what do you have to do to make sure that coverage continues?
  • What do you do if there’s a loss? How do you make a claim to recover a loss?