Replacement Value Coverage
This is the most common option that people add to their home coverage. That’s because home insurance policies usually include replacement value coverage for the building, but not for its contents.
- Typically, the contents of your home are only insured for Actual Cash Value (ACV) – in order words, the value of the item, minus depreciation.
- A stereo you purchased five years ago for $2,000 is stolen. Today, it might only have a cash value of $600. Even though it might cost $2,000 or more to replace it with something of similar quality, ACV coverage will only pay $600.
If you have Replacement Value coverage:
- you can replace the stereo with one of similar kind and quality, within a specified timeframe; and
- be paid for the full replacement cost – regardless of what it is actually worth after five years.
Coverage for Specific Valuables
- With any expensive purchase, make sure to keep sales receipts, photographs, and other information (make, model, serial number), and obtain a professional appraisal.
- Make sure to update your inventory of belongings any time you acquire anything of value.
Jewellery and furs
Most policies include limits on the amount and type of coverage available for items like jewellery and furs.
- Many insurance providers have a limit of about $3,000 on valuables like these. Don’t forget: if you make a claim, you also have to pay the deductible.
- If you have an item that exceeds the limit, you may want to purchase optional coverage for it and use the basic policy limit to cover your smaller valuables.
- When you purchase optional coverage for valuables, there is usually no deductible. But as noted above, if you make a claim for an expensive item under your standard coverage, with the limit of $3,000, you would also have to pay the deductible.
As with other valuables, there are dollar limits on coverage for works of art in insurance policies.
- Generally, you will need to purchase additional coverage that provides broader protection – for example, if the art is temporarily loaned out, or moved
The cost will depend on a number of factors, including:
- the type of art
- where it will be displayed or stored
- whether or not it will be loaned out.
Geographic location is also a consideration: if the art will be placed in an area with a high risk of hurricanes or wildfires, it may cost more to insure.
- Find out if your property insurance provider offers an appropriate policy. Some companies offer specialized fine art coverage.
- Some insurers may have experts who can provide additional help to ensure your collection is properly protected from risks like theft and water, smoke or fire damage.
Other Additional Coverage
In addition to coverage limits on theft of valuables like jewellery, furs and fine art, there may be specific dollar limits for certain items. In this case, you may want to consider buying extra coverage for the following items:
- Cash and negotiable securities
- Collections, including coins, stamps and cards
- Bicycles (see the article The Lowdown on Bicycles for more information)
- Boats and watercraft
- Computer software
Added protection for your home
Most policies do not include coverage for losses due to sewer back-up, earthquake, wind, hail and various types of water damage caused by ice, snow and sleet. A number of optional endorsements are available that can provide additional protection.
Sewer back-up coverage
- A basic property policy doesn't include coverage for earthquake damage.
- Insurers encourage people living in areas with a higher probability of earthquakes, such as British Columbia and Southern Quebec, to seriously consider this option.
Aboveground water damage coverage
- A basic property policy does not cover all types of water damage.
- This insurance is tailored specifically to water damage due to the weight of ice, snow, or sleet.
- It covers:
- sudden and accidental leakage of rain, snow or water through your roof, walls, doors, windows or any other openings
- sudden and accidental discharge, backing up or overflow of water through eaves, downspouts, rainwater gutters or roof drains.
Find out more about Aboveground water damage coverage
Belowground water damage coverage
- A basic property policy does not cover the most common type of water damage in homes: seepage in basements and sewers.
- This insurance is tailored specifically to water damage due to ground-water and sewer seepage.
- It covers:
- Sudden and accidental seepage, or an influx of surface or ground-water through your basement walls or other basement openings (such as foundations, basement floors or sidewalks)
- Sudden and accidental discharge, backing up or overflow from your sewer connections (such as, ditches, sump pumps, septic tanks, leaching beds or other septic systems for wastewater, retention tanks, holding ponds or catch basins, weeping tiles/French drains)
- Rising of the water table: this is basically rising water on land due to saturation from rain, snow, etc.
Find out more about Belowground water damage coverage