Should we increase home insurance coverage amount due to the increased home prices?

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Mar 23rd, 2022 8:32 pm

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Mar 23rd, 2022 11:42 am

umopapisdnwei [OP]: Deal Addict; Jul 6, 2010; 1543 posts; 3244 upvotes; Not Toronto

Mar 23rd, 2022 11:42 am

Should we increase home insurance coverage amount due to the increased home prices?

For my home insurance policy, I have these items listed under "Property Coverages" with coverage amounts as below:

Coverage A - Dwelling Building -- $500k
Coverage B - Detached Private Structures -- $80k
Coverage C - Personal Property -- $400k
Coverage D - Additional Living Expenses -- $125k

My home is now worth $1 million because of the steep rise in real estate over the last few years. So should I increase my insurance coverage to match that value? Obviously, my insurance premium will rise accordingly. But what are the potential drawbacks if I don't increase the coverage?

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Mar 23rd, 2022 11:49 am

ChocolatePoo: Member; May 9, 2019; 381 posts; 814 upvotes; GTA

Mar 23rd, 2022 11:49 am

I've read about this and I'm wondering the same thing.

Some say they're sick of my crap.

Mar 23rd, 2022 11:53 am

Lotek9119: Jr. Member; Nov 24, 2019; 150 posts; 93 upvotes; Hamilton

Mar 23rd, 2022 11:53 am

Those are prices to rebuild and such what you had, does not include the land which is the most expensive part, so probably not.

Mar 23rd, 2022 2:09 pm

buysellbuy: Sr. Member; Dec 3, 2019; 542 posts; 504 upvotes; Ontario

Mar 23rd, 2022 2:09 pm

You are only insuring the value of the actual home not the land value.

I heard of building costs now being quoted at $300+ per sq foot in Ontario. So just multiply $300 by the square footage of your home and that's your "Dwelling Building" insurance.

Insurance is a personal decision as on average you should not come out ahead. I'm guessing insurance companies payout $0.50 on the $1.00 in premiums they take in.
IMO you should only insure things you cannot afford to lose.

Mar 23rd, 2022 5:07 pm

synthetic1: Sr. Member; Jan 13, 2021; 790 posts; 1954 upvotes

Mar 23rd, 2022 5:07 pm

While we're on the subject, can anyone provide some narrative/reference for a real case in Ontario where a detached dwelling was a complete loss (fire/collapse...etc) and the owner successfully rebuilt a dwelling on the same lot using insurance funds? It's almost impossible to find such cases in Ontario (plenty of them in US).

Mar 23rd, 2022 8:32 pm

hoob: Deal Fanatic; Jan 6, 2002; 6520 posts; 7077 upvotes; Toronto

Mar 23rd, 2022 8:32 pm

umopapisdnwei wrote: ↑ For my home insurance policy, I have these items listed under "Property Coverages" with coverage amounts as below:

Coverage A - Dwelling Building -- $500k
Coverage B - Detached Private Structures -- $80k
Coverage C - Personal Property -- $400k
Coverage D - Additional Living Expenses -- $125k

My home is now worth $1 million because of the steep rise in real estate over the last few years. So should I increase my insurance coverage to match that value? Obviously, my insurance premium will rise accordingly. But what are the potential drawbacks if I don't increase the coverage?

This is a value calculated by the insurance company, and quite possibly a value/calculation you cannot adjust or even buy up via rider.

These are the structure rebuild costs but. Your "land" is covered by other aspects of the policy.

Si Tacuisses, Philosophus Mansisses

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