Ensuring Coverage in Real Estate Property and A Protection Primer for New Home Buyers in BC

Written for the Westcoast Homes & Design March 2007 edition by BFL Canada Insurance Services Inc. Insurance brokers will explain the ins and outs of home insurance coverage, including any available discounts, to arrive at a custom tailored policy.

Whether buying a house or condominium or renting an apartment real estate, it’s essential to protect your real estate investments. When purchasing insurance for the first time, do you know what questions to ask? It’s important to understand that not all home insurance policies are created equal.

Insurance brokers will help you when first purchasing an insurance package. As front-line professionals they represent the interests of the clients first and help you choose the right products for their real estate investments.

When building a relationship with your real estate insurance broker, be prepared to answer questions about your home, and insurance requirements. This allows a custom-tailored insurance policy to be built for you.

A prudent broker should review all applicable discounts to you, such as age of dwelling, alarm systems, and mature real estate market discounts. If you own a house, a homeowner’s package includes coverage for the dwelling itself, detached structures, personal contents, additional living expenses and personal liability.

If you’re renting a real estate property or apartment, a tentants’ package includes personal contents, additional living expenses and liabilities.

If you own a condominium, a condominium unit package includes your personal contents, betterments, and improvements to your unit, additional living expenses and liabilities. It’s important to understand that just because the strata building is insured, you are still required to insure your individual unit. This helps to minimize the gaps in coverage between the real estate strata corporation’s policy and your individual unit owner’s real estate property policy. Ask questions about additional coverage available specifically designed for condominium owners.

All real estate property policies have limitations on items such as, but not limited to, jewelry, bicycles, silverware and computers. Ask for an itemized list of these limitations and the cost of increasing these limits when needed.

Always request a copy of the real estate policy working, which is the legal contract between you and the insurance company. Read the entire policy carefully to determine your rights and duties and what is not covered. Clarification should be given on any item that you don’t understand.

If any real estate property coverage is excluded under the policy, such as earthquake, ask your broker if this is available and at what cost. All policies have deductibles that apply to various losses, so ask the broker to clarify these and how your insurance costs can be reduced by increasing the deductible. Brokers offer a variety of payment options, such as monthly and quarterly instalments and one-time payments by way of cheque or credit card. Check the options available to you.

From the BFL Canada Insurance Services Inc.

A Protection Primer for New Home Buyers in BC

Also from the Westcoast Homes & Design Magazine for March written by the Homeowner Protection Office. Legislation and regulations make sure that British Columbia’s new home buyers and real estate investors are better protected than ever before.

A booming provincial economy and a strong demand for residential real estate have persuaded many prospective homebuyers in B.C. that now is the time to invest in property. Consumer confidence in the residential real estate market has been further boosted by legislation and regulations that make buyers of new homes in this province better protected than ever before.

In addition to strong consumer legislation, home buyers of new homes built in British Columbia also have access to a wealth of free information to help them make informed decisions. Here’s a primer.

The Homeowner Protection Act

In July 1999, the rules in the new home marketplace in B.C. changed significantly in favour of real estate consumers and investors. The provincial Homeowner Protection Act was introduced to protect homebuyers of new homes and to bring about improvements in the quality of residential real estate construction. This legislation resulted in two key systems consumers should be aware of – one involves licensed residential builders and the other home warranty insurance.

The Homeowner Protection Act also established the Homeowner Protection Office to administer homeowner protection legislation and regulations and to provide information on these and other topics of interest to buyers of new homes.

Home Warranty Insurance

New homes built by Licenced Residential Builder in this province of BC must come with minimum home warranty insurance established by legislation. This insurance cover real estate buyers of new single family and multi-unit homes for a minimum of two years against defects in labour and materials (some limits apply); five years against building envelope defects, including water penetration; and 10 years against structural defects. Home buyers and real estate investors in BC and Greater Vancouver should check to make sure a project property has what is often referred to as 2-5-10 coverage.

New strata-titled condominiums in Vancouver are covered by two home warranty insurance policies. One applies to the unit for sale, and the other to common areas like building lobbies. The terms and effective and expiry date of coverage may be different for each home policy.

Licensed Real Estate Residential Builders

As of 1999, all residential property builders must be licensed with the HPO and must arrange for third-party new home warranty insurance for a real estate project in order to get a building permit or commence construction. Consumers should check to see if a builder is licensed by visitng the HPO website, where the HPO maintains a province-wide registery of licensed property residential builders.

Owner-Built Homes in BC

Prospective home purchasers of new property should be aware that owner-built homes are not required to be built by a licensed residential builder or to be covered by home warranty insurance in BC. Issues that arise after purchasing concerning defects would have to be settled directly with the owner-builder. Failing that, the purchaser’s only recourse may be in the courts.

Where to get More Information

For more information on licensed real estate residential Vancouver and BC Builders, home warranty insurance, owner-built homes or a free consumer protection guide for home buyers, contact the HPO by telephone toll-free: 1-800-407-7757 or by visiting the HPO website: www.hpo.bc.ca.