Home Insurance Information
Presented by Megson FitzPatrick Inc. (Insurance Brokers)
Older Homes:
- Most insurers require that older homes be updated.
- Roofs must be newer than 25 years old.
- Plumbing should be copper or PVC.
- Houses need to be on circuit breakers 100 amp minimum.
- Heating needs to be a recognized system.
- Woodstoves and chimneys need to be inspected and approved. The biggest concern is that chimneys in older homes cannot take the heat from a woodstove.
Oil Tanks:
- NO new business will be written if there is an underground tank.
- All tanks must be newer than 20 years old.
- Indoor or outdoor is fine but they must be professionally installed.
- Outside tanks are required to be on poured concrete pads.
- All policies exclude land cleanup and liability.
- Some companies will agree to write coverage on a home with an older tank until it can be replaced, but there will be a property damage exclusion included until the tank is replaced.
Wiring:
- Most Insurance Companies require that houses have a minimum of 100 amp circuit breakers. Some will allow 60 amp, but rarely.
- Knob and tube wiring is NOT acceptable.
- Some insurers will allow 60 days of coverage when a new home is purchased to allow the insured to replace knob and tube wiring.
** Reasoning for new Oil Tank and Wiring Restrictions
To-date we are not aware of any specific group or organization (i.e. Municipalities, Environmentalists or Fire Department) regulating the change to new tanks and wiring. This change has been initiated by the Insurance Companies themselves after having had to pay out catastrophic losses. Oil clean up claims are extremely expensive. There have been a number of them now and the Insurance Companies have decided they do not want to pay any more such claims, if possible, as the costs will force all rates up and make insurance rates prohibitive for the average client.
The same applies for the requirements to remove all knob and tube wiring. The Insurance Companies have been the ones to pay out after losses and they do not want to pay anymore if it can be helped.
Municipalities do change and add new by-laws and building codes for all new construction but allow “grandfathering” or “successorship” for existing structures. They may require new by-laws be met in a total or near total loss, which again, can drive claim costs if the affected building is not up to code prior to the loss.
Rented Homes:
- Clients must advise their insurer that a house is rented, not owner occupied, or insurance will be invalid.
- Landlords must be aware of Vacancy Restrictions if a house is left untenanted or before tenants move in after possession.
- All Insurance Companies require a rented dwelling questionnaire be completed.
- Many are now REQUIRING tenants in a rental to carry their own insurance. (Liability insurance is what the insurers are looking for.)
- Insurers do not like absentee landlords – they prefer the owner to be in town to watch the house or have a professional property manager.
- Grow-ops are a concern. (Most insurance policies now EXCLUDE any damage to homes caused by grow-ops or other illegal operations.)
Mortgage Company Requirements:
- All lenders require that Fire Insurance be purchased by the homeowner.
- Some lenders also require that Earthquake coverage be purchased – it is a good idea to check on the earthquake insurance requirement before signing for a loan.
- Some clients do not like to buy earthquake coverage. (Credit union mortgages.)
- Most lenders require a paper insurance binder confirming coverage has been placed prior to the effective date of the purchase. Insurance brokers will send these directly to the bank or lawyer’s office.
New Liability Exclusions:
- Pollution Exclusions – added to all policies to exclude damages brought against an insured due to escape of fuel oil or other noxious substances onto neighbouring lands.
- Fungi/Mould Exclusion – added to all policies to exclude liability claims brought against an insured due to bodily injury or property damage related to fungi or mould in a building.
- There has never been coverage on a building policy for damage to the structure caused by mould or wet or dry rot.
Coverage Questions:
Insurance coverage does apply during a power outage the same as it would any other time. There can be issues around freezing – “during the normal heating season” but as long as the insured has arranged for a competent person to come in and check their house regularly OR shut off all the water supplies to the house and drained the pipes, there would still be coverage. Food Freezer endorsements cover loss of frozen foodstuffs due to outside power failure.