Home insurance application checklist

Applying for home insurance can be intimidating. Insurance companies need to collect very specific information about your home, much of which you may not know off the top of your head, such as the last time your roof was replaced, or the type and age of your primary heating system.

The reason insurance companies need this kind of 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 in the event that it’s ruined by some sort of catastrophic event. And ultimately, this is how insurance companies determine your home insurance premiums. 

That’s why it’s important for you to come to the home insurance application process armed with the appropriate information. Economical Insurance advises that you break up this information into two categories: information about your home, and information about you. See below for the details your insurance company might ask you about. Use it as a checklist when you’re setting up a home insurance policy in order to make the process as seamless as possible.

Information about your home 

• Address

Why is my insurance provider asking me this? 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 one close to a large body of water. All of these things could mean there’s more  risk of damage to your home. Living in a “riskier” locale means you’d likely face higher rates. 

• Type of home

This is important to insurance providers because they need to factor it into their assessment of what 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. As well, if you live in a semi-detached versus detached home, that’s going to matter to insurance companies, too, because with attached homes, there might be increased risk of damage to the neighbour’s home in the event of a peril.

A detached home versus a semi-detached home, where a common wall is shared with another home, might result in lower 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

This is important for insurance companies to know for a few reasons. As your home ages, it becomes more prone to damage. Old leaky pipes, for instance, or a deteriorating roof, can spell trouble to insurance companies. 

If your home is on the older side, then you might face higher premiums than someone whose home is newly built.

• If you rent or own

If you rent versus own your home, condo, or apartment, your coverage will be different. The insurance company wants to know this so it knows the right coverage to offer you.

• Updates made to the home, such as major renovations or roof upgrade

This bit of information gives your 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 degrade and it becomes more prone to things like leaking.

“Some types of roofs are more durable when exposed to certain elements,” says Tirschler. The older the home, the older the roof. And unless there’ve been major upgrades, an older roof generally isn’t as capable of withstanding the elements as a newer roof might be. Knowing if there’ve been any major renovations also gives insurance companies a good idea of what it would cost to rebuild the home.

If the home is older and in need of major upgrades, you could face higher premiums since there’d be more to replace if your home becomes damaged or needs to be rebuilt. On the flip side, if you make these renovations and upgrades, you could save on your home insurance premiums because the risk is now less to 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, too — particularly with water and sewer backup.

“Water always travels downwards,” says Tirschler. “And where’s it going to end up?”

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 had that loss, then the cost would be higher to the insurer, since there are more items to replace. And you could face higher premiums as a result.

• Number of bathrooms

They want to know how much it would cost to rebuild the home. A home with three bathrooms versus one bathroom spells a more expensive rebuilding 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,” explains Tirschler. But it depends on where it’s located. For example, there’s a different degree of risk attached to whether the oil tank is inside or outside the home. Just having the oil tank doesn’t necessarily make a fire more likely, says Tirschler, but “if something were to happen, it’s more likely to be a severe event because that extra fuel is inside the house.”

If, however, the oil tank is outside the house, insurance companies will want to know that so they can tell the customer 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

Again, what your house is made of (e.g. brick) will affect how much it costs to rebuild. And insurance providers like to have a clear rebuilding cost estimate 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 you. A natural gas furnace, for instance, has a different blend of risk compared to a house heated with electric baseboards, says Tirscler. “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,” says Tirschler, referring to the total electricity load the electrical system can provide to a home.

Plumbing, again, is most 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 certain types of plastic plumbing. Whereas copper is the gold standard. In any case, that’s why your insurance company will want to know what’s behind the walls.

Information about you

• 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 we age, this gets 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 it be listed on the home insurance policy for its own protection, explains Tirschler.

This guarantees that in the event that you invalidate your policy somehow (it gets cancelled for non-payment, let’s say), and your home needs to be rebuilt due to some 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/proactively.” 

• If you have a line of credit

We’re not talking about a personal line of credit here, but rather 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. If you’ve made frequent claims in the past, for instance, it will likely take that into consideration when determining your premium and you could pay more.

• Number of people who live in the home

Who actually lives in the home is an important factor for home insurance companies, especially in situations where you’re renting out your home to several different tenants. The insurance company will want to know how many people 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.

If you own or rent your own place, then this is 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, your insurer needs to know because there might be work-related equipment that might not be covered under a basic policy, but instead require an endorsement or higher contents coverage. 

There’s also the risk factor. If there are people 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.

• 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 Airbnb it 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

This matters because if your home is vacant for a certain amount of time — usually more than 30 days — your home insurance policy could actually 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 to the insurance company.