Home insurance application checklist

Perhaps you’ve just purchased a new home, or you’ve moved to a new condo and are looking to buy home insurance. Applying for home insurance can be intimidating. Insurance companies need to collect very specific information about your home, like when the last time your roof was replaced, or the type and age of your primary heating system — the type of information that you won’t be able to answer off the top of your head.  

The reason insurance companies require this information is twofold: they’re trying to determine how risky your property is to insure, and they’re also trying to determine what it would cost to rebuild your home if it’s ruined by some sort of catastrophic event. Ultimately, this is how insurance companies determine your home insurance premiums.  

When you apply for home insurance, you’ll want to be armed with the right information. Economical Insurance advises that you break up this information into two categories: information about your home, and information about you.  

To make the process of applying for home insurance as seamless as possible, here’s a home insurance calculator and checklist you can use.  

Information about your home  

• Address 

Insurance companies need to know where you live in order to get a clearer picture of how risky it will be to insure your property, and as such, determine your premiums. Maybe you live in a high-crime neighbourhood or a particularly wealthy one. Or perhaps, one that is close to a large body of water. All of these things could indicate higher risk of damage to your home — and living in a “riskier” locale means you’d likely face higher rates.  

• Type of home 

The type of home you have provides insurance companies with a clue as to how much it would cost to rebuild the home, should it be damaged beyond repair, such as in a fire.  

The materials that your home is built with matters from both a replacement cost perspective and a risk perspective, since some materials might be more prone to deterioration or fire than others.  

Whether you live in a semi-detached home or a detached one matters to insurance companies. Attached homes, where a common wall is shared, come with an increased risk of damage to the neighbour’s home, which may lead to lawsuits or property disputes.  

Living in a detached home may reduce your premiums since there’s less risk of someone else’s property being damaged.  

• Square footage, number of storeys 

The bigger the house, the more costly it is to insure. Again, your insurance company will need to know what it costs to rebuild, and this will determine your premiums.  A larger home would likely result in higher premiums, since the rebuilding cost would be higher. 

• Year built 

As your home ages, it becomes more prone to damage. Old leaky pipes or a deteriorating roof can spell trouble to insurance companies.  

If your home is an older structure, you might face higher premiums than someone whose home is newly built. 

• Upgrades made to the home, such as major renovations or roof replacement  

This gives your insurance provider a clearer picture of how durable your home is. “The age of your home has an impact on its likelihood to generate certain types of claims,” says Stefan Tirschler, product and underwriting manager at Square One Insurance.  

One example is the roof. In an older home, the roof begins to deteriorate, and it becomes more prone to things like leaking.  

Read more: Does my roof affect my home insurance rate in Canada 

The older the home, the older the roof. And unless there’s been some major upgrades, an older roof generally isn’t as capable of withstanding the elements as a newer roof might be. Knowing if there have been any major renovations also gives insurance companies a good idea of what it would cost to rebuild the home. 

A home that is older and in need of major upgrades will be a much bigger job than a newer home in the event of major damage. So, that means higher premiums. However, if you make these renovations and upgrades yourself, you could save on your home insurance premiums because the risk to insure is now lower for the insurance company. 

• Finished basement 

A finished basement means it will cost more to rebuild your home, and that’s something the insurance company wants to know. But there’s also the risk element— particularly with water and sewer backup. 

If you live somewhere that’s at risk of overland flooding or sewer backup, the fact that you have a finished basement means if you file a claim, then the cost would be higher to the insurance provider, since there are more items to replace. And you could face higher premiums as a result. 

• Number of bathrooms 

The more bathrooms in a home, the more expensive rebuilding it would cost. 

“A bathroom is more expensive to build than a bedroom or living room because we’re running additional electrical and water service into those rooms,” says Tirschler. “So that increases the cost of putting it back.”  

As a result, you could face higher rates. 

• Presence of oil tanks 

“On its own, an oil tank isn’t necessarily a significant item,” says Tirschler.  Just having the oil tank doesn’t necessarily make a fire more likely, he notes.  But he cautions, it depends on where it’s located. There’s a different degree of risk attached to whether the oil tank is inside or outside the home.  

“If something were to happen, it’s more likely to be a severe event [if the] extra fuel is inside the house,” he adds. 

If, however, the oil tank is located outside the house, insurance companies will want the customer to be aware of how often to inspect and replace it.  “Oil tanks often deteriorate from the inside out,” explains Tirschler.  

“So, you don’t know it’s coming until the hole has formed. If heating oil escapes, especially outside, it becomes a challenging thing to decontaminate and clean up and not all policies will cover that.” 

• Exterior wall type 

The material that your house is made of also affects how much it costs to rebuild. And insurance providers like to have a clear cost estimate for rebuilding when they determine your premiums. 

• Type and age of heating, electrical, and plumbing equipment 

The type and age of your heating source will factor into the rebuilding cost calculation, as well as the risk of insuring your home.  

A natural gas furnace, for instance, has a different blend of risk compared to a house heated with electric baseboards, explains Tirschler. “The additional supply of fuel into the home, maintenance, regular cleaning, age of furnace, is a predictor of potential issues down the road.” 

The type of electrical supply is more about actual risk, particularly the risk of fire. “Capacity is also a concern,” he adds, referring to the total electricity load the electrical system can provide to a home. 

Plumbing, again, is mostly about risk. “Municipal water can put a whole lot of water into your home in a short amount of time,” says Tirschler. And there are certain types of plumbing that have been historically problematic, such as galvanized steel pipes, and some types of plastic plumbing. Copper, however, is the gold standard for plumbing.  

In any case, that’s why your insurance company will want to know what’s behind the walls. 

Related: Is your septic tank covered by home insurance? 

Your customer profile 

• Your age 

Insurance companies may want to know how old you are to get a sense of whether or not you’re able to successfully maintain your property. As people age, repairs and basic upkeep become harder to do, and as such, the risk of the home deteriorating due to lack of regular maintenance increases. 

• If you have a mortgage 

If you have a mortgage on your home, your bank will require that the mortgage be listed on the home insurance policy for its own protection, explains Tirschler. 

This guarantees that in the event that you invalidate your policy (let’s say, it gets cancelled for non-payment), and your home needs to be rebuilt due to a disaster, the bank is shielded from having to front the rebuilding costs. 

There’s another reason why home insurance companies want to know if you have a mortgage. “Having a mortgage does correlate with having a greater frequency of home insurance claims,” says Tirschler. “The general idea is that if you are mortgage-free, you may have additional capital available to deal with issues as they happen, whereas those who don’t maybe won’t replace issues early or proactively.”  

• If you have a line of credit 

Personal lines of credit shouldn’t make a huge impact, but your insurance company will need to know if you have a line of credit secured against the home as collateral, such as a home equity line of credit. “The bank would need to be listed on the insurance policy if you’re using it as collateral,” says Tirschler. 

• Number of past claims 

This indicates to the insurance company how risky a customer you might be. The more claims you’ve made in the past, the more you will probably have to pay on your premium. Plus, the more claims you make in the future, the higher your rate is likely to increase.  

• Number of people who live in the home 

How many people live in the home is an important factor for home insurance companies, especially in situations where you’re renting out your home to different tenants. The insurance company will want to know the number of people who are living there at any given time, and whether they have separate entrances to each unit, and so on. And this could mean you need landlord’s insurance. 

Even if it’s just your family living in the home, it’s still important for the insurance company to know because if you don’t happen to be home when damage occurs or when someone injures themselves on your property, the other person(s) living with you will need to communicate with the insurance company.   

• If you run a home-based business 

If you operate a business out of your home, there might be work-related equipment that may not be covered under a basic policy, but instead require an endorsement or higher contents coverage.  

There’s also the risk factor. If people are frequently coming in and out of your home, this would raise the eyebrows of your insurance company from a liability coverage perspective. Liability insurance protects you in the event that someone is injured on your property.  

If you operate a home-based business and clients are regularly in your home, your insurance company might require you to take a higher amount of liability coverage. 

Related: Running a business from home? The right insurance policy is crucial 

• If your home is used as a rental or home-sharing service 

 Again, this comes down to liability. Your insurance company will want to know if you rent out part or all of your home, or if you list a room out on Airbnb every now and again, for instance. This would require a certain set of coverage not included in a traditional home policy.  

• If your home is currently vacant or intended to be vacant in the future 

Lastly, if your home is vacant for a certain amount of time — usually more than 30 days — your home insurance policy could become void. A vacant home is a concern to insurance companies because no one will be there in the event that something happens to the home, such as a fire. This could result in more damage, and a higher cost for the insurance company. 

If you’re only starting the home insurance application process, be prepared to become very familiar with your home. But while the questions can be daunting, they can give you a unique insight into your new abode and how you might live there in the future. Plus, depending on your answers, you may find opportunities to save money on your home insurance premium.  

However, the best way to guarantee that you’re getting the best rate for the right coverage for you is to compare rates and speak with different brokers.