Choosing the right home & auto insurance doesn’t seem like something that would be easy, but now it is. In fact, you can even get your coverage online.
Insurance is one of those things you need to buy but hope you never have to use. If you do end up using your insurance, it means something went wrong. Your home was robbed or damaged or you got into a car accident. Since these are incredibly stressful life events on their own, having proper insurance coverage can spare you also having to deal with financial stress at the same time. This is why choosing the right home & auto insurance is part of having your finances in order.
Protecting your assets is as important as earning them. There’s no point saving up for a house or a car or anything if you’re not going to take care of it. Insurance is how you ensure you get to keep everything you’ve worked so hard for — even in the face of the unexpected.
As your life changes, the insurance coverage you need does too
I bought my first car this past July. I say the “first car” because it is the first car I’ve purchased and owned entirely myself. Most of my 20’s were spent relying on public transit and my own two feet. The few years I did own a vehicle, it was either a parental cast-off or shared. Now I finally have my very own car, where I am the only driver listed on the insurance.
Likewise, in my early 20’s I lived in shadier apartments or houses with too many roommates. I often got by without tenant insurance. It was fine for the time: I owned little more than a bed and some clothes. Even if something catastrophic happened and I needed to replace everything, it probably wouldn’t have cost more than a couple thousand dollars. The bonus of tenant insurance, even if you don’t own a lot, is that if something happens like flooding and you can no longer live there, your expenses like hotel costs could be covered until repairs can be done. It also includes liability coverage should someone sue you for something that happened on your property.
As I got older, earned more money, and bought nicer things, protecting what I owned started to matter. Additionally, most landlords now required proof of insurance before you could rent their property.
Two things really drove my need for better tenant insurance: my baby and my business.
I moved from a one-bedroom to two-bedroom apartment when I had my baby, and the amount of stuff I owned seemed to increase exponentially. In the event of a fire, flood, or theft, not only my possessions would need to be replaced — my baby’s stuff would need to be, too! If you’re a parent, you already know the price tag for a stroller or a crib. You do not want to buy those items a second time!
The other thing was my business was growing almost as fast as my child. Since I do a lot of work from home, my more expensive equipment for my business was kept here instead of my office. I had two computers and a DSLR camera, amongst other equipment, that I needed to protect. Make sure your business expenses are covered under your home policy (or you have a separate policy). Personal home policies can include a certain amount of coverage for home business expenses, but you need to know how much.
Determining what kind of home & auto coverage you need
Most people, myself included, are bad at estimating how much insurance they need.
We tend to “forget” we own even our most sentimental and important possessions, like jewelry or art. If you really want a wake-up call on how much your “life” cost, spend 20 minutes listing and estimating the price of everything you own in just one room. You’d be surprised how quickly the total hits a few thousand dollars.
Thankfully, you don’t have to itemize and estimate the cost of every single item in your home to get the right insurance. Your personal belongings coverage will range from $30,000 to $100,000, and you know better than anyone which end of that spectrum fits your possessions!
When it comes to your vehicle, the type of insurance coverage you’ll need depends on both on what you drive and how you use it. A long daily commute in a luxury vehicle will cost more to insure than a beater you only use on weekends. Likewise, using your car for work or a side hustle like Uber, or sharing it with another driver can also impact your auto insurance premiums.
You will get some flexibility in deciding things like your liability limit, your deductible, and if you want extras like the cost of a rental car covered should you need one in the event of a collision. You can decide if you only want accident coverage, or if you also want auto insurance for things like falling objects, hail, or theft. What type of insurance is the right fit for you depends on where you live and your personal finances, as well as how much you love your car.
Understanding your insurance coverage
1 in 3 Canadians have not read their home insurance policy. And until a few weeks ago, I was one of them.
Before I read through my detailed auto insurance policy, I had a vague idea what most of it said. Like 90% of Canadians, I understood common terms like “deductible”. I even knew to opt for a higher deductible in order to lower my monthly insurance premiums!
But other terms, like comprehensive insurance, were less clear. Comprehensive insurance covers your vehicle against damage other than that from a collision and includes things like protection against falling or flying objects and vandalism. You might be both super-safe and super-lucky and never get into an accident while driving, but that doesn’t mean a tree won’t fall on your car when you’re parked out on the street one day.
If you want to know what’s covered by your home or auto insurance policy, check out this glossary of insurance terms to better understand what each word means.
What’s covered and how much it costs to do so can have a lot to do with where you live. I paid higher tenant insurance premiums when I lived on a top floor apartment than I did when I lived on a lower floor. Even the cost of my auto insurance changed when I moved to a different neighborhood! Take the time to read through your insurance policy to understand what’s covered, why, and by how much to ensure you have what you need.
Bundling home & auto insurance to save money
Together, my tenant insurance and auto insurance only cost me $120 per month or just less than $1,500 per year. It’s still a large bill, but since both are necessary purchases, the only thing I can really do is strive to get the best deal possible. Most people don’t price shop when it comes to insurance, and I was guilty of this too. Shopping for insurance sounds boring, tedious, and complex. But it doesn’t have to be.
Sonnet offers both personal auto insurance and personal home insurance. They are Canada’s first fully online home and insurance company. You can get insured in minutes without ever leaving the comfort of your couch. You already know what you’re paying from your current insurance provider. Now get your quote from Sonnet to see how they compare.
Choosing the right home & auto insurance
Sonnet doesn’t only make insurance easy to buy, they make it easy to understand. Instead of complex insurance jargon, you’ll find plain language throughout Sonnet’s website and policy documents. What’s even better, they use your information to build a policy that’s exactly for you. I got my quote AND coverage in minutes.
Yes, you read that right. Quote AND coverage. I didn’t submit all my information and then wait for someone to call me to let me know my fate. With Sonnet, you can find out how much home and auto insurance will cost and set it up all at once. Getting properly insured has never been easier — so now you have no excuse!
This article was sponsored by Sonnet, but all views opinions expressed herein are my own.
It really helped when you said that having an insurance will save us from stress since we will know that things will be covered when unfortunate things happen. I will share this with my sister to convince her to get one. This is because she will be buying a house next year, and she said that she plans to have no insurance until she needs it.
It got me when you explained that having an insurance will save you from a headache when there are unexpected issues or things happening to your property which can affect your financial status. I guess I have been convinced of its importance. With that in mind, I will make sure to look for the right type of insurance for my house which will be built next year. Its construction will be done in April since we are still waiting for the additional money we need to hire contractors. Thanks!
Great post! Thanks for this valuable information. Liked the concept of Insurance.