Your mortgage lender will require you to obtain an insurance policy that covers the new home you are purchasing against damages resulting from fire and extended perils. The amount of the coverage should be at least the amount of the mortgage, although consider obtaining more. In any event, mortgage lenders will insist that you are covered for the full replacement value of the dwelling and that the Insurance Bureau of Canada’s standard mortgage clause be included in the policy. In addition, the mortgage lender’s name and address should appear on the insurance policy. Even if you are not arranging a mortgage, it is best to have fire insurance to protect yourself financially against such a tragedy. Your policy should be effective as of the closing date, and a policy binder letter (proof of the policy) must be sent to your lawyer before mortgage funds can be used.
Details Insurer Needs
Your insurance company or broker will need details from you about the square footage of the house, proximity of fire hydrants, and other related information. The Multiple Listing Service specifications sheet may not contain all this information. Consider obtaining these details from the vendor when viewing the home, or ask your real estate agent if they can get this information for you.
If you are buying a condominium unit, insurance for the building coverage will usually be included in your monthly common expenses. However, whether you are buying a condo or a house, consider arranging for contents, liability, and/or comprehensive insurance so that you will have some coverage for certain losses of personal belongings or in case someone has an accident on your property.
Please contact us if you would like a referral to an insurance broker or company.