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To evaluate our insurance coverage well

To evaluate our insurance coverage well

It is important to choose our insurance coverage well when comes the time to renew our policies or to insure a new building. The choice is not always obvious because it is necessary to be insured to protect our investments well, to foresee the needs for insurance in case of loss of income following a disaster in order to continue to face our obligations and also to ensure the profitability aimed at by its operations.


In order to understand the whole well, it is also necessary to look at the whole according to the principal guarantees available:


The first is the insurance which covers the physical goods, that is to say mainly the apartment building, the dependencies and the contents of these dwellings.

Concerning the amount of insurance to be envisaged for a building: The exact amount of insurance coverage to envisage is the cost of rebuilding the dwelling. Wrongfully, some think that the cost of purchase (commercial value) or that the value established for the taxes (municipal evaluation) are elements to be considered. Very often these two elements represent values lower than the cost of rebuilding of the dwelling. To determine well the cost of newly rebuilding a dwelling is not obvious either. The insurers have grids which enable them to get themselves an idea of the cost of replacement. However, these grids are guides which take account of important factors such as dimensions, the number of storeys, the type of materials used in the construction industry to name only the principal ones. As mentioned, these grids are used as guides and cannot determine with precision the replacement cost because certain elements such as additions, higher structural components (ex: full-wooden floors, kitchen cabinets made of wood, etc) are often not considered. A professional appraiser is the best asset which makes it possible to determine the real value of rebuilding well and often it is not about an expenditure but a good investment to call upon his services.


Moreover, in your determination of the amount of insurance necessary for your building, people often forget to calculate the cost for the removal of the rubble. Indeed, for an important disaster, it is necessary to demolish and clean a part or the totality of the premises before beginning the rebuilding or the repairs. Usually, it is necessary to think of adding to the cost of rebuilding an additional amount of 10% to cover this expenditure. With certain insurers, such as with La Personnelle Assurances générales, when you subscribe to a policy, the insurer grants as complementary guarantee, an additional amount of 10%, to cover this expenditure. With other insurers, the whole is included in the amount of insurance on the building and the policy-holder must thus then envisage to increase his amount of insurance consequently. You should thus read your contract well.



As regards the dependencies (ex: shelter, handing-over, separate garage of the dwelling, etc) but which are on the insured premises, you should once again envisage an amount for these items. The majority of the insurers thus include these elements in their definition of the word “building”, they are thus covered but the responsibility of the policy-holder is to evaluate well the cost of rebuilding of these items in order to add them to the insurable value of the principal building.

The contents of the buildings of which you are owners are also an element to evaluate well. Some of you, with the rents, provide pieces of furniture entirely or partly in the renting. Other buildings have common surfaces comprising a certain furniture provided


by you owners. There is also for some among you equipment being used for maintenance or repairs which comprises a certain value. Once again you must envisage an amount of insurance for these elements. With La Personnelle Assurances générales, furniture such as the cooking apparatuses, washing and refrigeration rented or belonging to the common surfaces are covered in the definition of the word “building”, but the policy-holder must envisage consequently to increase his amount of insurance on the building.

About the author

Québec Landlords Association (1)

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