Homes are complicated. Not only is there a lot of maintenance and upkeep involved, adding, subtracting and replacing things can make a difference in its overall value. That’s why it’s important to take a comprehensive home inventory yearly, and to make sure you keep your home insurance provider aware of any renovations and improvements.
When it comes to determining your home insurance coverage, there are three different ways to look at your property: as an inspector, an appraiser and an assessor. Although they sound similar, they are quite different, and each plays a role in the overall value and protection needed for your home.
Home Inspections in Alberta
A home inspection is a part of every home buying process. It’s a way to make sure that the buyer is well aware of the state of the house they are buying, and a way for the seller to ensure they are getting the full value for their property.
Home inspectors in Alberta must have a license, and they should show their identification to you before having a look at your new or soon-to-be new home. There are a number of ways home inspectors and financial advisors (who may also act as home inspectors) may obtain certification, but each must attain a license from the Government of Alberta, be bonded or have another form of security, and carry errors and omissions insurance.
When hiring a home inspector you may also want to ask about any potential conflicts of interest. For example, are any other interested buyers paying the same inspector to look at the home? Checking references is also a good idea. Your realtor should obviously be able to provide their recommendation, but you should ask for one or more others as well.
Remember that a home inspector can’t damage your home in any way while carrying out a review, unless they get written permission from you to perform a more in-depth exploration.
Home inspectors concentrate on the following when they visit your property:
- Any potential fire hazards (such as fireplaces, electrical wiring that has not been updated and roofs in disrepair) and safety in the form of the presence of fire detectors and the ability for people to exit quickly.
- A possible replacement value calculation. Replacement value is the amount it would take to rebuild your home from scratch up to its current worth.
- The condition of your plumbing, heating and electrical systems to inform you of any necessary repairs or upgrades.
- If your walkways and driveways are in need of repair, perhaps because of tripping hazards.
- Any cracks or leaks in your foundation.
- The overall state of your insulation, which means they will also check for mould.
Property Assessments in Calgary
In essence, insurance companies are mainly interested in how much it would cost to demolish an existing structure, remove all the debris, and rebuild an identical or near-identical home on the site. This represents the absolute maximum amount of money they would be responsible for covering if your existing home were to be wiped out by a tragic event, such as a fire. That’s why it can get confusing when it’s time for property assessments in Calgary.
Property assessments are much different than a home inspection or evaluation. Property assessments are based solely on the real estate market, meaning how much similar properties have sold for recently, and are carried out for the purpose of municipal taxation only. If you happen to live in a neighbourhood that is close to downtown, regardless on the size or condition of your home, your property will be assessed for a higher value than something identical in a less central location. A property assessment calculates the approximate market value of a home.
Home Evaluations … the Best of Both Worlds
A comprehensive home evaluation includes the most important elements of a home inspection and a property assessment. Like an assessment, a home evaluation takes into account the home’s proximity to public transit, school and core amenities, buying trends and upgrades, including eco-friendly ones. Home evaluations also take into consideration the results of a home inspection, such as the building and property’s overall state of repair. Your home insurance provider or broker can provide a recommendation for a home evaluation.
Lane’s Insurance for Your Alberta Home Insurance Needs
Home inspections and property assessments have one thing in common. Their outcomes are based on the building, location and markets, but have nothing to do with the contents. That’s where your home insurance comes in. All Alberta policies include contents coverage, but valuable may be subject to special limits. Always check the special limits of your policy when you make a large purchase.
At Lane’s, you will be partnered with a specialist who will be your personal contact for all things pertaining to home insurance. Even though we may not be your provider, we are always your source for good information, and no obligation quotes.