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Broad form home insurance in Canada

Broad form home insurance is one of several policy kinds offered by insurers to Canadian homeowners. In terms of coverage and cost, broad form sits between two other widely offered policy types – mainly named perils and comprehensive. (Yes, the no-frills option exists as well, but its coverage is so limited that it’s viable in specific circumstances only).

The balance between price and coverage makes broad form one of the easiest home insurance policies to recommend. Like the comprehensive policy, it protects your dwelling against all perils – aside from a handful of exclusions – and like the named perils policy, it protects your belongings against named perils only. This means that your dwelling is fully protected, while your possessions are only partially protected – and it may not be entirely clear which perils count and which ones don’t.

As a result, when filing a claim, the burden of proving that your items were damaged by a covered peril will fall squarely on you, the policyholder. Your dwelling, however, is unlikely to face any disputes from the insurer thanks to a much smaller list of exclusions (all of which should be listed on the policy). This lack of coverage when it comes to personal items is broad form policy’s biggest drawback.

What does broad form home insurance cover?

Your broad form home insurance policy will cover the following:

• Dwelling: Your home and other structures on your property, such as the guest house, detached garage or barn, are all included in this coverage. The policy guarantees protection against all perils – aside from those named as exclusions. In other words, the home itself is fully protected.
• Belongings: Your clothes, electronics, furniture and other items are all covered under this. However, unlike the dwelling, they are protected against the perils listed on the policy. The coverage is limited, and payout isn’t guaranteed.
• Additional living expenses: If your home becomes unlivable due to a covered peril, any additional expenses you may incur, such as accommodations, groceries and travel, will be covered by this policy.

Liability coverage

Broad form home insurance covers the following liability categories:

• Personal liability: You can receive personal liability coverage ranging from $100,000 to $5,000,000 if someone gets accidentally injured on your property and chooses to seek legal action against you.
• Voluntary medical expenses: If you accidentally injure someone on your property, your coverage for the necessary medical expenses can range from $1,000 to $10,000.
• Accidental damage to property: Your coverage in the event of you or a minor under your care accidentally damaging someone else’s property or possessions can range from $500 to $10,000.

Commonly covered perils by the broad form insurance policy

Broad form home insurance policy will protect your dwelling and belongings against the following perils:

• Fire: Broad form insurance policy will cover fire regardless of what starts it – whether it’s the iron you forgot to turn off, a burning forest or arson. The only way you’d be precluded from receiving this coverage is if you purposely start the fire yourself.
• Lightning: In addition to the possibility of starting a fire (which would then fall under the fire coverage), lightning can damage your electronics, appliances and wiring in your walls. This coverage will pay for replacing or repairing the damaged items.
• Theft and vandalism: Your home can get vandalized both on the inside and outside. It can also be robbed. Both can occur at the same time. In either event, broad form insurance will cover you.
• Windstorm and hail: Should a windstorm drop a tree or branches onto your home or send debris flying through its windows, you will get covered. Similarly, if hail were to cause any major damage or loss, you’d receive the funds to make the necessary repairs or replacements.
• Falling objects: Though an object such as space craft or an airplane falling from the sky is unlikely, it can still happen – and cause tremendous damage to your property. In such an event, you’d get the necessary coverage.
• Water damage: Though water damage may not be as fully covered as fire damage, you are still protected from major leaks. This leak would have to come from something on your property – either outside or inside – such as indoor plumbing, air conditioning or sprinklers. Water damage would not, however, protect you from sewer back-up or overland flooding.

How is a broad form policy different from other types?

Broad form policy falls between named perils and comprehensive policies in terms of coverage and price (and as mentioned above, the no-frills policy belongs in its own category).

The big thing to be mindful of here is the difference between the way broad form home insurance covers your dwelling versus your possessions. While your dwelling is protected from all known perils – barring several listed exclusions – your belongings are protected from named perils only. This means that your dwelling is protected against more calamities than your possessions. It is therefore possible for a peril to damage both your dwelling and possessions, yet for you to only receive coverage to for the dwelling.

There’s also the burden of proof. In the case of your dwelling, you don’t need to work hard to prove that the damage came from a covered peril. Conversely, in the case of your belongings, you’d need to sufficiently prove that the peril in question is indeed covered.

With that in mind, here’s how the broad form home insurance policy compares to the others (including no-frills):

Is broad form home insurance coverage right for you?

Broad form home insurance policy is a decent compromise, if you’re looking to save on premiums. Your most important asset – the home itself – will be fully covered under it, so you won’t have to worry about that, at least.

That said, weigh your risks carefully. For instance, it’s entirely possible for something like a storm to flood parts of your home damaging your floors, drywall and stairs alongside items such as your furniture, clothes and electronics. Under a broad form home insurance policy, your floors, drywall and stairs will likely get the money needed to pay for their repairs or replacement. Your clothes, furniture and electronics, however, may not get any money at all if this type of water damage is not listed on the policy (for personal possessions).

This means that you’d have to repurchase those items yourself, potentially negating any savings you might’ve made on premiums. Broad form home insurance is cheaper, but it is a double-edged sword. So, if you can afford it, go for the comprehensive policy instead.