Your Home Insurance Questions Answered

At PMC Insurance, we get a lot of emails with questions surrounding home insurance. To help you understand your home insurance policy and how your insurance premiums are calculated, we've collected a few of the most frequently asked questions and answered them for you.

1. Why do I need home insurance? 
Your home is often the biggest investment you'll make in your life. It's also one of the most important possessions you will own; it's where you and your loved ones live. It's your foundation and base, where you go after a long day of work and where you relax. Home insurance protects your home and its contents from loss and damage. This loss or damage could be due to theft or natural causes like thunderstorms and earthquakes. Home insurance also has a liability component, covering you in the event that someone harms him or herself on your property.

2. What are the different kinds of home insurance policies? 
There are three main types of insurance. Comprehensive policies covers your home and its contents against all risks, except for excluded risks. This kind of policy tends to give you the most coverage, and as expected, costs the most. Basic / Named Perils insurance is a type of insurance that covers you against specific risks and is not all-encompassing likeComprehensive. A Broad insurance policy is a mix between the Basic and Comprehensivepolicies, offering one kind of insurance for your property and another for your contents. For instance, you may choose to have your property covered for all losses and damages, and only specific items in your home covered.

3. How does an insurance company calculate my premiums? 
There are many factors that contribute to your insurance premiums. Primarily, an insurance company will look at the cost of replacing your home and its contents. The more expensive your house, and the more costly items you own, the higher your premiums will be. The neighbourhood in which you live also comes into play, as different neighbourhoods have different levels of crime. Your home's age is also a factor, as older homes tend to have more problems and newer homes tend to have fewer.

10 Insurance Scams Homeowners Frequently Try to Pull

Many homeowners fudge values a bit or make less-than-honest estimates when filing a claim with their homeowners’ insurance carrier with the attitude that they’re only taking back money that they’ve already paid. This attitude is not only criminal, but also costs the community money in raised premiums across the board. Here are some of the most commonly filed bogus homeowners insurance claims.

1. Overstating Value – In the event of a break-in, determining the value of your stolen possessions can be difficult. Overstating the value of a family heirloom or other object with more sentimental than monetary value can be tempting, but it’s important to remember that doing so is insurance fraud.
2. Storm Damages – When a home sustains damage from storms or other events that are covered by their policy, some homeowners are tempted to blame damages that occurred through non-covered events on the storm as well. Unscrupulous homeowners may also damage their own property to receive a settlement.
3. Staged Fires – The idea that a homeowner could set fire to their own home is a shocking one for most people, but it does happen. When facing foreclosure or other financial devastation, some desperate homeowners have been known to resort to arson. In addition to criminal insurance fraud charges, they almost always face arson charges as well; this can add up to hefty fines and significant prison time.
4. Salesman-Induced Fraud – This common scam is typically perpetrated by a salesman with most clients being unaware of the legalities; touting the ability of their equipment to detect “microscopic siding damage from hail” or other damages, these shady salespeople bill insurance companies to replace virtually undamaged siding or other surfaces.
5. Underwriting Fraud – Most homeowners don’t realize that being dishonest on insurance applications or refusing to disclose important information is considered fraud, and can carry criminal penalties. Fudging the truth to get a better premium may be common, but it’s unethical and illegal.