Home Insurance in Ontario - Caveats?

[quantass]

We just got home insurance for our 4 homes (1 principle, 3 rentals) with TD Insurance. I may have been off with the square footage on some of the homes when asked about the rebuild price.

This is all new to me. Is there any way we can be dropped or the insurance money forfeited after so many months/years of premium payments? We're only concerned about the homes themselves and not so much burglary / vandalism. So fire, trees, explosions, etc that directly affect the house are important.

We live in Ontario. All 4 homes have one mortgage each. I'm reading the policy terms and there is a section entitled Right of Subrogation that concerns me.

Thanks for the heads up.

[speedyforme]

If your house blows up or burns down, there may not be too much documentaion on the actual square footage

I think home insurance is based on the replacement value outlined in the policy.

[quantass]

WRT the replacement value. We purchased our home in the late '90s for around $250,000. According to TD the replacement value is $411,000. I'm just wondering if fibbing about the square footage to reduce the replacement value (2600 sqft x $178) would help reduce my premiums as if the home were to be replaced we'd only want the same amount we paid for it ($250,000). There is still a mortgage on the home though.

[ssainani]

i would not lie about the replacement amount ..... as it costs more to rebuild a home than it costs to buy sometimes

Right of Subrogation just means the bank will get paid first if needed
And it also means that even if you break conditions and get denied a claim (If you use your home as a grow-op) the bank still gets paid

[coolspot]

as if the home were to be replaced we'd only want the same amount we paid for it ($250,000). There is still a mortgage on the home though.

That doesn't quite make sense ... how are you going to rebuild your house for 250,000 in today's dollars?

So basically what you want to do is underinsure yourself correct?

[ssainani]

That doesn't quite make sense ... how are you going to rebuild your house for 250,000 in today's dollars?

So basically what you want to do is underinsure yourself correct?

as well if you lie about the square footage .... the new replacement home would only be the lied amount

[peelhic]

i would not lie about the replacement amount ..... as it costs more to rebuild a home than it costs to buy sometimes

Right of Subrogation just means the bank will get paid first if needed
And it also means that even if you break conditions and get denied a claim (If you use your home as a grow-op) the bank still gets paid

Thats actually an incorrect statement... the mortgage clause in your policy is what covers the mortgagee and ensures that they get paid before you do. Right of Subrogation means that the company can act on your behave to subrogate losses against another party.

For example, your neighbors tree falls on your home and damges the structure, ie roof, etc. Now, if you have home insurance your company will cover the loss under the "falling objects" peril listed on your policy. Now, since the cause of the damage was due to the negligence or property of another party, your insurance company would now go after the neighbor for damages on your behave. In most cases they would just contact the insurance company of the neighbor and is third party liability insurance would cover the loss.