Excalibur Insurance

Fire Insurance

July 26, 2019


In 1666 London burned.

In 1666 London literally burned to the ground, and caused the equivalent of 2.49 Billion (today’s) dollars CAD worth of property damage. The biggest challenge was determining who was financially responsible to rebuild. Legally the burden fell on the shoulders of the tenants, but ultimately the landlords were the only ones with the money to afford the cost of rebuilding. The risk of ensuing fires made the opportunity ripe for the first Fire Insurance companies to rise from the ashes and carry the risk for a monthly fee.

What’s cheaper than rebuilding? Water.

London Fire Insurance Companies started hiring fire brigades that could be dispatched to reduce the damage, and make resulting home repairs cheaper. This led to an explosion of fire brigades throughout London, and since the city had no street addresses at the time – large iron emblems were placed on homes to identify which fire brigade was responsible in the event of a fire.

A more efficient approach to home protection.

London fire insurers eventually banded together to finance a single unified fire fighting force in London to watch over the city day and night! But I know what you’re thinking, home insurance doesn’t pay today’s firefighters. You’re totally right. To learn more about the history of insurance click here.

Home Insurance has come a long way since 1666.

Today most Ontario home insurance policies that are sold are referred to as a “Comprehensive Homeowners Policy”. This type of policy is a ready-made package designed to provide an owner of a single family home with insurance protection for the building, detached private structures, personal property, additional living expenses and personal liability.

What’s included in a “Comprehensive Homeowner’s Policy”?

Rebuilding Coverage is generally insured for what it will likely cost to rebuild the building with all new materials in the event of a total loss, like a fire. The value that you paid for the home has little impact on the selection of a coverage limit, as you will always have the value of the building lot even if the home is destroyed. Our specialized software calculates home rebuilding costs to determine a proper limit for your home.

Detached Private Structure Coverage is always included within a comprehensive homeowner’s policy and is generally 10% of the home building limit. This coverage would apply for items such as detached garages and garden sheds.

Personal Property Coverage is generally considered to be the contents of your home. This limit varies among insurers, but 60% to 70 % of the building limit is common. There are some “special limits” for certain types of valuable contents within the home. Ask an Excalibur insurance broker to clarify how this may affect you.

Additional Living Expenses is another included coverage within your Ontario home insurance policy. An amount equal to 20% of the building coverage applies should a loss occur, and the insured is forced to relocate while repairs are underway. Expenses over and above the insured’s normal living expenses would be paid under this section.

Personal Liability Insurance is also included in your comprehensive policy. Liability insurance promises to pay on behalf of the insured, subject to policy limits, those sums for which the insured is legally liable. The usual test for liability at law is: was the injury or damage caused by the negligence of the policy holder or family members? If so, then the person who was negligent must pay damages to the person who was injured or whose property was damaged. This would be when your home liability coverage would respond.

Is that all? What are my home insurance options?

Guaranteed replacement cost – means that the insurer will pay the actual replacement cost of the home, even if this exceeds the home limit shown on the policy itself. There are a few conditions to this coverage, relating to advising the insurance company when changes have been made to the home itself.

Replacement cost coverage for contents – this coverage explains how settlement is made in the event of a personal property loss. It refers to the concept that no depreciation is applied to the replacement of personal property.

Sewer back up coverage – this can be added to most policies and is certainly highly recommended that a person carries this coverage. It provides coverage for damage against direct physical loss or damage to insured property caused by the sudden and accidental backing up or escape of water or sewage within your home from a sewer, septic system, sump pump or drain.

Which theoretically means that when you lose something financially – your insurer gets you the amount required to make things right. In practice however things get a little muddier, which is why it’s important to have a broker by your side. A broker will make sure you’ve got the right coverage limits to get things back to where they were before the loss or claim, and if needed go toe-to-toe with the adjuster on your behalf.

Want to know more about protecting your home in Ontario?

Talk to an Excalibur Defender at 1-888-298-7343.

To discuss these or any other questions with a broker give us a call or

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Home Insurance – Frequently Asked Questions