Home insurance: why your client needs it

by Justin Kua19 Sep 2014
Home insurance: that one thing most people don't want to pay for because they never know if they're going to need it. But as the old adage goes, an ounce of prevention is better than a pound of cure. With the rising costs of home ownership these days, it's understandable how our clients may want to pass on added monthly costs if they can be avoided. Home owners insurance may be mandatory for most people with mortgages, but content insurance, on the other hand, is not and neither are home warranty protection plans.

First let's talk about content insurance. As you know, this is for protecting your clients’ personal belongings. Whatever value your clients assess for all of the stuff in their home, advise them add ten percent to that amount just in case. Most policies only range between $25 and $50 dollars a month, but this is still the number one insurance people tend to overlook. Maybe because the cost is so small, most don't think it's significant? Encourage your clients to look into this type of insurance, even if it means having one fewer dinners out a month.

The second most overlooked insurance policy is life/disability insurance. God forbid something should happen to your client or his or her individual earning potential. Disability insurance should be something everyone considers adding even if they have some type of coverage with their work benefits. Because most people tend to overlook the fine print, when it comes time to shell out for policies, insurance companies will want to give the bare minimum. Would that amount be enough to get your clients by on a month to month basis?

Also, with life insurance for single owners, it's more to be considered a gift to a loved one should the unthinkable happen. The biggest thing for your clients is protecting their mortgage balance. This is even more of an important issue to be discussed with clients who are couples who own a home together.

Lastly, encourage your clients to get an annual home warranty insurance policy that would cover any repairs that need to be made to the home structure or the appliances. Even if your clients just purchased a condo, the maintenance fees may cover general unit maintenance but they’ll be on their own for appliances.

Here's the view I like to give my clients about insurance: the monthly cost may be annoying to keep up with, but is the asset you're protecting (easily worth a few hundred thousand dollars) worth the cost?


Is a Toronto foreign sales tax a good idea?