How much would it really cost to replace your home?

(NC) Ask any Canadian homeowner to name their biggest investment - their real pride and joy - and most likely they'll say it's their home. It's their sanctuary with the pristine lawn, beautiful garden, finished basement, and renovated kitchen. When such a paradise exists, why would anyone want to risk losing it? But what if disaster struck and your place was severely damaged by fire or some other catastrophe. Are you certain that your insurance policy would cover the rebuilding of your house and the replacement of all the contents? Unfortunately, this answer often comes too late that the homeowner isn't adequately covered. The property insurance experts from Desjardins Insurance have some answers and suggestions to help you.

• First, be prepared. The first three days after an emergency are the most critical. So consider creating a 72-hour emergency kit. Typically it will include 3 days' worth of water for each person in your family, imperishable food stuffs, candles, flashlight and batteries, and a first-aid kit. Next, take an inventory of your belongings. Be thorough because it's easy to underestimate the total value of your possessions. Include furniture, jewellery, electronics such as computer equipment, game systems and television, along with clothes, shoes, boots, pots, pans, other personal and household items. Take particular note of expensive items such as antique furniture or other valuables.


• Read your policy carefully. It's important to remember that your home insurance will not cover every type of major loss. The typical home insurance policy will cover a fire loss, as well as damage caused by lightning, windstorms, hailstorms and even tornadoes. Standard homeowners' policies in Canada exclude flood damage. However, policies generally cover other kinds of water damage, for example from a sewer backup or a burst pipe in your house. Desjardins Insurance is one of the few companies that also cover damage caused by water seepage through basement walls or floors.

Your policy may be worth more than your home. Many people believe that if their home is burnt to the ground, they would automatically receive full market value for their house. This isn't true. The value of a home insurance policy is based on the cost to rebuild the house, not to sell it on the market. The actual replacement cost could end up being either greater or less than the market value. Replacement costs will include the material (lumber, roofing shingles, siding material, carpet, drywall, etc.), and the labor and architectural services. There are also additional costs associated with the demolition and clean-up of the site before construction, which can be expensive in a crowded city neighbourhood. The location of your home could be a factor too. For example if you're located in a remote or rural area, travelling expenses and supply transportation need to be taken into consideration.

For more information about your insurance policy and the replacement value of your home, speak to your insurance provider. Or for immediate answers, call or visit Desjardins Insurance at www.desjardinsgeneralinsurance.com.