A person who owns his or her home would have a different policy from someone who rents, for example. Policies also differ on the amount of insurance coverage provided. The types of perils covered also differ among policies and according to where you live. Variety in homeowners policies is fairly standardized throughout Canada and the United States. However, individual companies may offer policies that differ depending on the regulations that govern where you live, as well as prevailing environmental conditions in your area.

The table below illustrates the broad range of disasters covered in each type of policy and provides a useful comparison of what you can expect to see in a home insurance policy. The chart below was adapted from American sources, (with thanks to The Insurance Information Institute). Specified perils and available coverage deserve close attention when you're considering the type of homeowners' insurance to suit your personal and business circumstances. As well, specified perils are available for special circumstances.

Get the assurance of homeowners' insurance coverage that fits. Seek the advice of an experienced AWI Insurance professional.

Download a free copy of Home Insurance Explained, (24K PDF)

If you own the home you live in, you have several policies to choose from.
The most popular policy is the HO-3, which provides the broadest coverage.

This bare bones policy covers you against the first 10 disasters. It's no longer available in most areas.

A basic policy provides protection against all 16 disasters. There is also a version of HO-2 designed for mobile homes.

This special policy protects your home from all perils except those specifically excluded.

Designed for older homes, this policy usually reimburses you for damage on an actual cash value basis which means replacement cost less depreciation. Full replacement cost policies may not be available for some older homes.

Created specifically for those who rent the home they live in, this policy protects your possessions and any parts of the apartment that you own, such as new kitchen cabinets you install, against all 16 disasters.

A policy for those who own a condo or co-op, it provides coverage for your belongings and the structural parts of the building that you own. It protects you against all 16 disasters.

Whether you are an owner or renter, you have the following three options:

1. Actual cash value
This type of policy pays to replace your home or possessions minus a deduction for depreciation.
2. Replacement cost
The policy pays the cost of rebuilding/repairing your home or replacing your possessions without a deduction for depreciation.
3. Guaranteed or extended replacement cost
This policy offers the highest level of protection. A guaranteed replacement cost policy pays whatever it costs to rebuild your home as it was before the fire or other disaster even if it exceeds the policy limit. This gives you protection against sudden increases in construction costs due to a shortage of building materials after a widespread disaster or other unexpected situations. It generally won't cover the cost of upgrading the house to comply with current building codes. You can, however, get an endorsement (or an addition to) your policy called Ordinance or Law to help pay for these additional costs. A guaranteed replacement cost policy may not be available if you own an older home.

Some insurance companies offer an extended, rather than a guaranteed replacement cost policy. An extended policy pays a certain percentage over the limit to rebuild your home. Generally, it is 20 to 25 percent more than the limit of the policy. For example, if you took out a policy for $100,000, you could get up to an extra $20,000 or $25,000 of coverage.

Even though a guaranteed/extended replacement cost policy may be a bit more expensive, it offers the best financial protection against disasters for your home. These coverages, however, may not be available in all areas or from all companies. Check with your AWI Insurance pro.