Understanding Insurance – Discover Your Dream Home in White Rock’s Coastal Paradise!

Understanding Insurance Discover Your Dream Home in White Rocks

Understanding Insurance – Discover Your Dream Home in White Rock’s Coastal Paradise!

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Not all insurance products are created equal. One of the most common mistakes homeowners and potential homeowners make is that they hear the word “insurance” and just assume they have it!

It is important to understand all the different insurance products to ensure you have proper coverage. To help you get a better understanding of the insurance, below are the four main
insurance product options you will encounter and what they mean:

Default Insurance

This insurance is mandatory for homes where the buyer puts less than 20% down. In fact, default insurance is the reason that lenders accept lower down payments, such as 5% minimum, and actually helps these buyers access comparable interest rates typically offered with larger down

Default insurance typically requires a premium, which is based on the loan-to-value ratio (mortgage loan amount divided by the purchase price). This premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments.

In Canada, most homeowners know of the Canada Mortgage and Housing Corporation (CMHC), which is run by the federal government, and have used them in the past. But did you know? We also have two private companies, Sagen Financial and Canada Guaranty, who can also provide this insurance.

Home (Property & Fire) Insurance

Next, we have another mandatory insurance option, property and fire coverage (or, home insurance, as most people know it by). This is number two on our list as it MUST be in place
before you close the mortgage! It is especially important to note that not all homes or properties
are insurable, so you will want to review this sooner rather than later.

In addition to protecting against fire damage, home insurance can also cover the contents of your home (depending on your policy). This is important for anyone looking at purchasing
condos or town
houses as the strata insurance typically protects the building itself and common
areas, as well as your suit “as is”, but it will not account for your personal belongings or any
upgrades you made. Be sure to cross-check your strata insurance policy and take out an
individual one on your unit to cover the difference.

One final thing to consider is that you may not be covered in the event of a flood or earthquake.
You may need to purchase additional coverage to be protected from a natural disaster,
depending on your location.

Understanding Insurance – Real estate sales in White Rock

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