Insuring Your Home and Other Belongings

Theft, severe weather and accidents can happen, but if you have property and home insurance, you’re protected against damage to your home, furniture, valuables and other belongings. This means your insurer will pay you a certain amount in the situations covered by your insurance contract in exchange for the insurance premiums you pay every year.

Your insurance contract

You can decide on what property you want to insure. However, you must find an insurer willing to include this type of property in an insurance contract.

For example, if you insure your furniture and it’s destroyed in a fire, your insurer should pay you. If you insure your wedding ring and it breaks after you drop it, your insurer should pay to have it repaired or replaced.

You can also insure your home. Home insurance is a specific type of property insurance that protects against damage to your house, apartment or condo.

What you must tell your insurer

Before entering into an insurance contract, you must give your insurer all relevant information that can impact

• its decision whether to insure your property, and
• the amount of the premiums you’ll have to pay to insure it.

For example, you must declare relevant information about the following:

• The property you want to insure (value, characteristics, condition, location, etc.).
• Situations that can cause damage to the insured property, for example, having a welding shop in your basement (risk of fire), using a house as a secondary residence or using your condo for professional purposes.
• Past events involving the property you want to insure (for example, if your apartment has been vandalized several times or your basement has had water damage).

If your insurer asks questions, you must answer to the best of your knowledge.

The same rules apply when renewing your insurance contract.

Beware of making false statements

An example of a false statement would be not declaring that you’ve received insurance payments for damage to your home in the past or that an electrician has told you that your electrical system is outdated and must be replaced.    

If you made false statements, your insurer isn’t required to pay you for damage to your property if it can show that

• you intentionally provided false information, or
• the insurer would have refused to insure the property if you had provided the correct information.

If your insurer can’t prove either of these things but you did give false information, you’ll still receive an indemnity, but the amount will be less than if you had provided correct information.

When coverage begins

Coverage usually begins once the insurer agrees to insure you, or on another date you arrange with your insurer.  

This date is indicated in your insurance policy. Your insurance policy is a written document that proves you have an insurance contract and sets out the main points of the contract.

Paying for the insurance

The payments you’re required to make to your insurer are called “premiums.”

The amount of your premiums depends on

• the risks covered (fire, water damage, loss, theft, vandalism, etc.),
• the value of the insured property, and
• the maximum amount of the insurance indemnity you can expect to receive if damage occurs.

You must pay the premiums when indicated in the insurance contract.

If you don’t pay one of your premiums, the insurer can

• cancel your insurance contract,
• take steps to get you to pay the premium (demand letter and court proceedings, if necessary), or
• deduct the amount of the premium from any indemnity it owes you.

Notifying the insurer if the risk to your property increases

You must notify your insurer as soon as possible of any situation that meets the following three criteria:

• The situation has increased the risk of damage to the insured property.
• The situation has an important impact on how the insurer sets the amount of the premium, evaluates the level of risk or decides whether to continue insuring your property.
• You’re the cause of the situation.

This would be the case, for example, if you start running a business in your home, or if you insured your condo as your residence but have decided to rent it out online instead.

If you don’t notify your insurer of a situation that increases the risk, the consequences are the same as if you had made a false statement. 

If you inform your insurer of a situation that increases the risk, the insurer can

• adjust the premium, or
• end your insurance contract.

If the insurer chooses to adjust the premium, you have 30 days to accept it and pay the new premium. If you don’t accept it or if you don’t pay the new premium within 30 days, you’ll no longer be insured.

The law provides that the following situations don’t increase the risk covered by your insurer:

• You’re away from your primary residence for 30 consecutive days or less.
• You don’t occupy (or don’t spend much time at) a residence insured as a secondary residence.
• Workers are maintaining or repairing your residence for a period of 30 days or less.

End of coverage 

Your insurer can cancel your insurance coverage at any time by letting you know 15 days in advance.   

You can also cancel your insurance by giving the insurer written notice. Your coverage will end as soon as the insurer receives your notice.

At the end of the insurance contract, your insurer must refund any extra premium amounts that you have paid.

When damage occurs

Once you realize that your insured property has been damaged (that is, a loss has occurred), you must notify your insurer so that you can receive an insurance indemnity. Your insurer is required to pay within a certain amount of time.

Notifying your insurer of a loss

You must notify your insurer if a loss occurs.  

• It’s important to do this as soon as possible, even if you’re not sure whether the damage is covered by your insurance contract.

• You can notify your insurer in writing (by email, through the insurer’s mobile app, etc.) or verbally (for example, by telephone).

Once the insurer has been notified of the loss, it can ask you to provide information about what happened. It can also ask you to provide documents. You must respond to its request as quickly as possible.  

If you don’t notify your insurer of a loss, or if you wait too long, it can refuse to pay the indemnity if these two conditions are met:

• Your actions caused harm to the insurer. For example, the insurer didn’t have an opportunity to send an expert to your home to assess the extent of the damage or to investigate the cause.
• Your insurance contract clearly states that you can lose your right to an indemnity for this reason.

Receiving the insurance indemnity

The insurer has 60 days after being informed of the loss, or after receiving all necessary information and documents, to pay out the insurance indemnity.

Important: You might have to pay a deductible, which is the portion of the damage the insurance doesn’t cover and that you have to absorb. For example, if your $1,500 computer was stolen and your deductible is $500, your insurer will pay the difference, which is $1,000.  

Also, the insurance contract might state that the insurer is allowed to repair, rebuild or replace the insured property instead of paying you money.

Finally, the insurance indemnity you receive can’t be more than the amount for which you insured your property. For example, if you insured your furniture for $10,000, you won’t receive more than this if a loss occurs, even if your furniture is worth $20,000.

Situations where the insurer can refuse to pay 

In some situations, the insurer can refuse to pay you for the damage to your insured property. Here are some examples:

• The event that caused damage to the property isn’t covered by your insurance contract. It’s therefore part of your contract’s exclusions.

For example, a valuable object was stolen from your home, but your insurance only covers fire and other natural damage, not theft.

• You didn’t fulfill one of your responsibilities under the insurance contract when the damaging event occurred.

For example, you were away on a trip for more than 30 days when your house was vandalized, but your insurance contracts states that your home can’t be vacant for more than 30 days.

• You intentionally caused the event that resulted in the damage. For example, you set fire to your home in order to receive insurance payments.

• You intentionally made a false statement to your insurer following a loss. For example, you exaggerated the value of the damaged property or the amount of damage to the property.