Why mortgage lenders require you have home insurance in Ontario?

Homeowners insurance covers both your property and the contents inside of it from unexpected loss or damages. It pays the costs either to repair or rebuild your home in the event of a loss from things like fire, lightening, falling objects, windstorms, hail, water damage, theft and vandalism.

But did you know that there are many other sections of an insurance policy that can protect your financial well being even further?

  1. Liability

Let’s say you’re held liable for bodily injury or property damage unintentionally caused to someone else. Personal liability protects you if this happens on your property or anywhere in the world. 

  1. Additional Living Expenses

This covers you for any additional expenses incurred as a result of you not being able to live in your home. It usually takes effect in situations where your home’s damages must undergo a number of repairs, or when you are required to evacuate. Additional living expenses could include hotel stays and restaurant bills. 

  1. Identity Theft Coverage

Get coverage that provides financial support to restore your credit and reputation in the event of identity theft. It includes expenses such as professional fees charged by lawyers or notaries, legal fees associated with defense against criminal charges, as well as charges for long distance calls and registered mail. 

Unlike car insurance, home insurance is not mandatory by law. But…banks and other mortgage holders require that you purchase home insurance – and show proof – before they lend you money to buy a home.

Why? Because this way the lender’s money is protected in the event that something happens to your home.

Now, remember! Coverage varies from one insurer to the next, so it’s important to select a policy suited to YOU