illustration: Remie Geoffroi

Home Insurance: Five Steps to Make Sure You’re Covered

By Janet Gyenes

’Tis the season for gifts galore—goodies stashed under trees or in closets, waiting to be wrapped. With more valuables in your home than other times of year, it’s the ideal occasion to take a home inventory. An accurate and detailed list of everything in your abode will help insurance cover your prized possessions in the event of burglary, fires, floods or other maison mishaps.

Here’s how to take stock and make sure your coverage doesn’t fall short when you need it the most.

“Keeping files up to date can help prevent losses or surprises if something were to happen,” says Steve Kee, director of media and digital communications for the Insurance Bureau of Canada. Kee recommends taking a complete inventory of your home’s contents annually, or more frequently if your circumstances change.

Over time you accumulate more possessions or perhaps purchase pricey items like jewellery and artwork. “I always look at things and think, ‘What is the worst case scenario?’” Kee says. “You just want to make sure your insurance is reflective of your current situation.” For those big-ticket items, check your policy’s limits; you might need extra coverage.

There are no hard rules on how to inventory your home’s contents. Whether you jot down a list or make a spreadsheet, being thorough is what’s important.

Rifle through every room, closet and crawlspace to itemize everything, from your well-loved IKEA cutlery and kitchen linens to the camping gear and tools stashed in the garage. Note the make, model and age of items, being as specific as possible, and document serial numbers. Such details help insurance adjusters identify what was lost or destroyed, identify similar products for quotes, and determine replacement and depreciation values.

Consider making videos or taking photos of the rooms in your home as well as individual items. (Family heirlooms rarely come with receipts.) This can be can a valuable way to verify details if you need to make a claim. Sometimes you don’t know the true value of obscure items, such as a treasured hockey card collection, until your insurance adjuster tries to determine its replacement cost. Retain receipts, warranties and appraisals, especially for valuable possessions. “It’s your proof of ownership and the age and value of items,” Kee says.

When you’ve finished, make and keep multiple copies of your inventory—at the office, in a safety deposit box or saved in the cloud for quick retrieval.

Your home (including the land it’s on) may appreciate over time, but its contents typically depreciate. That’s why it’s essential to not just read your policy, but to understand nuances, such as actual cash value (ACV) versus replacement cost (RC). For instance, if you purchased a TV for $1,000 five years ago and tried to sell it today, the market value would be significantly less. The ACV is similar: It’s calculated by determining the replacement cost of the item and subtracting depreciation.

While it’s generally considered a better option, RC has intricacies too, Kee explains. “For example, if you were to lose the home completely, insurance would cover the cost of materials and labour to rebuild your home. It may cost more [to rebuild] as a one-off than when you’re building a whole new subdivision because of economies of scale.”

That’s when your home’s insured value versus market value factors into the equation. “The insurance value of the home does not include the value of the land,” Kee explains. Together, the land and the improvement—your home and its contents—make up the market value. If you make a claim, you’ll get a settlement on the home, but don’t bank on taking the money and pulling up stakes. Most policies have a requirement that the home be rebuilt on the same site.

Look at the big picture too. “Virtually every home policy would cover fire and the damage to vehicles—if you have comprehensive coverage on those vehicles.” Talk to your insurance advisor about your options and what it means in different claim situations.

Whether you’re rebuilding after a loss or renovating, remember that upgrades can significantly add value to your home—especially kitchens and bathrooms, which typically offer the highest return on investment. Such improvements can also affect how your property is rated, so let your insurance rep know when you renovate, Kee advises. Before you even start, it’s a good idea to read up on your policy’s liability coverage. And ask for your contractors’ credentials to make sure they’re insured too.

If the time comes to consider making an insurance claim, first weigh the cost of your deductible against your estimated loss. If you have a $1,000 deductible, for instance, forgoing claim-free status for a stolen camera worth $1,200 might not be the best move. With larger claims, the cost of the deductible comes off the top of your settlement so you won’t be out of pocket.

Kee offers two parting pieces of advice: Scrutinize your policy and talk to an insurance representative for expert advice. “Insurance is there to protect you and help you recover in times of crisis.”

home insurance house cross-section
illustration: Remie Geoffroi

You’re not likely to forget the TV, fridge, furniture or washing machine, but don’t forget all the little things that add up too:

• Kitchen – countertop appliances, place settings and cutlery, pots and pans
• Laundry room – iron or steamer, Dyson vacuum
• Home office – tablets, desk accessories
• Bedroom – book collection, clothing, shoes, accessories
• Living room – art and collectibles, gaming system, PVR/streaming device
• Garage – camping gear, ski equipment, bicycles
• Basement – hockey and baseball cards, memorabilia and antiques, record collection

Questions to ask your insurance advisor to make sure you’re covered:

• What does my home insurance policy cover?
• Is there a specific kind of insurance for the type of home I live in?
• Are there certain risks not covered by my policy?
• What is a deductible? And how does it affect the cost of my home insurance?
• Am I entitled to any discounts?
• Is my home business covered by my home insurance policy?
• Should I make a claim for every loss?

To learn more, see