Insurance can be complicated, but understanding these common home insurance terms will go a long way in helping you make the best insurance choices for your needs.

1. Flood insurance
Home insurance policies have specific definitions for various types of water damage coverage. 'Flood' refers to saltwater flooding caused by a storm surge or tidal wave. These affect a small percentage of Canadians living in coastal areas and are typically not covered by a standard home insurance policy or optional endorsement. 'Overland flood' refers to an inland body of water (e.g. a lake or river) overflowing onto dry land. Remember that even if you don't live by a body of fresh water, your home could still experience water damage due to heavy rains or spring run-off entering your property, which also falls into this category. Finally, 'sewer backup' refers to a sewer, septic system, or sump pump overflowing and entering your property. A standard home insurance policy typically does not offer overland water or sewer backup protection. However, many insurance companies offer additional optional coverage depending on where you live and your risk level. To ensure you have the best coverage for your needs, speak with an insurance broker who can provide professional advice.

2. Guaranteed replacement cost
Guaranteed replacement cost provides additional protection beyond your home's replacement cost. It covers the cost of replacing your home in the event of unforeseeable circumstances, such as fire or weather events, without factoring in depreciation. Even if the damage to your home exceeds your policy limit, your insurance company will fully replace your home and belongings.

3. Mortgage clause
A mortgage clause, standard in many home insurance policies, protects mortgage lenders if a property is damaged. When you secure a mortgage for your home, you'll likely be required to agree to this clause. It's essentially a separate agreement between your mortgage lender and insurance company. It ensures that if your property is damaged while you're still paying off your mortgage, the insurance company will compensate your mortgage lender for the loss, even though your home insurance policy covers it.

4. Identity theft insurance
A standard home insurance policy typically includes basic identity theft protection, but it’s usually minimal. Although coverage varies, some insurance carriers offer the option to add more coverage for theft or illegal access to your credit or identity, as well as the costs associated with restoring your identity, such as correspondence, notarizing documents, lost income, and legal fees, to name a few.

5. Contents insurance
Contents insurance, also known as personal property insurance, is part of every home, tenant, and condominium unit policy. It protects your belongings from damage or loss in the event of unforeseeable circumstances such as fire, a windstorm, theft, or a vehicle collision. This insurance not only covers the items in your home but also those you bring with you when travelling. It protects the most common belongings, such as electronics, furniture, clothing, etc. However, it's important to note that each contents insurance policy has a maximum limit as well as sub-limits for specific categories of belongings such as antiques and jewelry. If your valuable items exceed your maximum limit, consider enhancing your protection with additional optional coverage.

If you're a current OTIP policyholder, contact us at 1-833-494-0089 to review your existing home insurance policy and discuss enhancing your protection. If you’re not insured with OTIP and are shopping for home insurance, call us at 1-833-615-9326 to get a quote and receive a $20 gift card of your choice!