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Understanding your insurance policy is just as important as having one

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Understanding your insurance policy is just as important as having one

Please Note: We're restoration professionals — not insurance brokers, agents, or adjusters. While we've supported many homeowners through the claims process and want to share what we've learned, this blog is not insurance advice. Your policy is unique to you, and we always recommend connecting with your insurance broker or adjuster for guidance specific to your situation and coverage.

When disaster strikes your home, understanding your insurance coverage can mean the difference between financial recovery and devastating loss. This guide will help you navigate the complexities of homeowners insurance as it relates to water damage, fire, mold, and other disasters. 52% of Canadians DO NOT understand their homeowner’s policy, and while we are not insurance professionals, in our business we see the outcome when home owners do not understand their policy the way they should.

We work with insurance companies daily throughout the North Okanagan, Salmon Arm & Shuswap regions, and we've created this guide to help prepare you before disaster strikes and empower you when purchasing your policy & filing claims.

 

Key Coverage Types to Look For

Most standard homeowners insurance policies in BC include:

  • Dwelling Coverage: Protects the structure of your home (walls, roof, built-ins).
  • Personal Property: Covers belongings like furniture, electronics, and clothing.
  • Additional Living Expenses: Pays for temporary housing if your home becomes uninhabitable.
  • Personal Liability: Covers legal costs if someone is injured on your property.
  • Other Structures: Includes detached garages, sheds, fences, etc.
  • Medical Payments: Covers minor injuries to guests.

Check out this guide to home owners insurance in British Columbia: The Ultimate Guide to Homeowners Insurance in BC - (Updated 2026) | InsureBC

Wildfire Coverage

Given the North Okanagan’s exposure to wildfires:

  • Wildfire Coverage is typically included in standard policies, covering fire, smoke, and water damage from firefighting efforts. 
  • FireSmart Discounts: BCAA & Co-operators offer discounts if you complete a wildfire mitigation assessment through FireSmart BC.

Read more about it here:  Insurance | FireSmart BC

BCAA & Co-operators Fire Smart Programs

 

Tips for Choosing the Right Policy

  1. Assess your risks: Consider wildfire zones, Fire Smart landscaping or communities, floodplains, and proximity to emergency services.
  2. Work with a local broker: They understand regional risks and can tailor coverage accordingly.
  3. Compare Policies: While we recommend you speak to a broker from your area, you could also do some research by using platforms like Ratehub or Square One to compare quotes and coverage levels.
  4. Review add-ons: Look for things like sewer backup, earthquake coverage, and identity theft protection
  5. Understand Exclusions: Wear and tear, mold, and pest damage are usually not covered. 

Top home 7 Insurance add-ons for wildfire risk

1. Wildfire Defense Services

  • TD Insurance offers complimentary wildfire mitigation through Wildfire Defense Systems in eligible BC areas. Services include:
    • Clearing flammable debris
    • Installing portable sprinklers
    • Applying fire-retardant gels
    • Sealing vents and openings https://www.tdinsurance.com/products-services/home-insurance/tips-advice/wildfire-protection
  • These services are preventative, not emergency response, and help reduce damage before a wildfire reaches your property.
  • If your home qualifies, you should have already bene automatically enrolled and notified directly by email or mail.

2. Additional Living Expenses (ALE) Extension

  • Covers evacuation costs, temporary housing, meals, and transportation if your home becomes uninhabitable.
  • Some policies cap this coverage, so ask about extended ALE limits.

3. Detached Structures Coverage

  • Standard policies may not fully cover sheds, garages, fences, or landscaping.
  • Add-ons can ensure these are protected from wildfire damage. 

4. FireSmart Discounts 

  • BCAA & Co-operators offer discounts if you complete a FireSmart BC Wildfire Mitigation Assessment.
  • You’ll receive a list of actions to reduce risk and potentially lower your premium. 

BCAA & Co-operators Fire Smart Programs

5. Extended Contents Insurance

  • Valuable items like art, jewelry, or electronics may have low default coverage limits.
  • This add-on increases protection for high-value belongings. https://www.ratehub.ca/insurance/home/british-columbia

6. Home-Based Business Insurance

  • If you run a business from home, this add-on protects equipment, inventory, and liability in case of wildfire damage. https://www.ratehub.ca/insurance/home/british-columbia

7. Umbrella Liability Insurance

  • Provides extra liability coverage beyond your standard policy, useful if wildfire damage leads to legal claims. https://www.ratehub.ca/insurance/home/british-columbia

 

Part 1: The Fine Print - What Your Policy May Not Tell You

Critical Exclusions Most Homeowners Don't Know About

FLOODING vs. WATER DAMAGE - The Costly Confusion

  • Your standard homeowners policy covers water damage from INSIDE your home (burst pipes, appliance failures)
  • It does NOT cover flooding from outside sources (overflowing rivers, storm surge, ground water)
  • The test: Did the water come from the ground UP or top DOWN? Ground up = flood insurance needed
  • NFIP (National Flood Insurance Program) or private flood insurance must be purchased separately
  • In BC, approximately 78% of at-risk homeowners purchase flood insurance, but many don't realize they need it
  • Flood Insurance is not usually included and must be purchased as an add-on or separate policy. https://www.insurebc.ca/articles/the-ultimate-guide-to-homeowners-insurance-in-bc-2024

 

SEWER BACKUP - The Hidden Gap

  • Standard policies exclude damage from sewer backups and sump pump overflow
  • This is one of the most common claims in our region during heavy rainfall
  • You need a specific endorsement/rider for this coverage
  • Costs are minimal compared to the $20,000+ average sewer backup claim

 

EARTHQUAKES & GROUND MOVEMENT

  • British Columbia sits in an earthquake zone, yet standard policies exclude all earthquake damage
  • This includes foundation cracks, landslides, mudslides, and sinkholes
  • Separate earthquake insurance is required

 

MOLD - The Grey Area

  • Mold from sudden, unexpected water damage (burst pipe) is typically covered IF you act immediately
  • Mold from long-term leaks, poor maintenance, or flooding is NOT covered
  • Most policies have sublimits ($5,000-$10,000) for mold remediation
  • The key: Document and call professionals immediately when water damage occurs

 

MAINTENANCE-RELATED DAMAGE

  • Insurance doesn't cover damage from neglect or lack of maintenance
  • A leaking roof that wasn't repaired = not covered
  • DIY repairs gone wrong = typically not covered
  • Keep records of all home maintenance and inspections

 

PERCENTAGE-BASED DEDUCTIBLES

  • Many policies now use percentage deductibles (1-5% of dwelling coverage) for specific perils
  • On a $400,000 home with 2% windstorm deductible = $8,000 out-of-pocket before insurance pays
  • These often apply to: windstorms, hail damage, wildfires in high-risk areas
  • Understand YOUR specific deductibles for different disaster types

 

POLICY SUB-LIMITS

  • Your policy has hidden limits on specific categories:
    • Jewelry: Often only $1,500 per incident
    • Business equipment at home: Usually limited to $2,500
    • Trees/landscaping: Typically $500 per tree, $2,500 total
    • Cash and collectibles: Severely limited
  • These sub-limits apply even if your total personal property coverage is much higher

 

VACANT/UNOCCUPIED HOME EXCLUSIONS

  • If your home is vacant for 30+ days, many policies exclude coverage
  • Extended vacations, snowbirds, and renovation periods can trigger this
  • You must notify your insurer and may need special vacant home coverage

 

REPLACEMENT COST vs. ACTUAL CASH VALUE

  • Replacement Cost: Pays to rebuild/replace with similar materials at today's prices
  • Actual Cash Value: Pays replacement cost MINUS depreciation
  • A 15-year-old roof may only be worth 25% of replacement value under ACV
  • Many policies pay ACV initially, then replacement cost after repairs are completed

 

UNDERINSURANCE - The Growing Crisis

  • Construction costs have risen 15-20% in recent years
  • Your dwelling coverage from 3 years ago may now be inadequate
  • "Co-insurance clauses" penalize you if insured for less than 80% of replacement cost
  • Review coverage limits annually

 

Part 2: Essential Questions to Ask Your Insurance Provider

Before a Disaster Strikes

 

Coverage Clarification:

  • "What is my EXACT coverage for water damage versus flood damage?"
  • "Do I have replacement cost or actual cash value coverage?"
  • "What are my deductibles for different types of disasters?" (Get this in writing)
  • "What is my dwelling coverage limit, and when was it last reviewed against current construction costs?"
  • "What are the sub-limits on my personal property coverage?" (jewelry, electronics, etc.)
  • "Is there a co-insurance clause in my policy?"
  • "What happens if I need to be out of my home - what does Additional Living Expenses (ALE) cover?"
  • "How long will ALE coverage last?"

Exclusions:

  • "Is sewer backup and sump pump overflow covered? If not, what does the endorsement cost?"
  • "Am I covered for mold remediation? What are the limits?"
  • "Do I have earthquake coverage? If not, what would it cost?"
  • "What happens if building codes have changed and require upgrades during reconstruction?"
  • "If I run a home business or work from home, is my equipment covered?"
  • "What is excluded from my policy that I should know about?"

Claims Process:

  • "What documentation do you require when I file a claim?"
  • "How quickly do I need to report damage?"
  • "What are my obligations to prevent further damage?"
  • "How long does the typical claims process take?"
  • "Do you require multiple estimates for repairs?"
  • "How do advance payments work?"

 

When Disaster Strikes (Call Within 24-48 Hours)

Immediate Notification Questions:

  • "What is my claim number and who is my adjuster?"
  • "What immediate steps should I take to prevent further damage?"
  • "Am I authorized to make emergency repairs? What's my spending limit?"
  • "Do I need approval before hiring a restoration company?"
  • "What documentation do you need from me immediately?"
  • "When will an adjuster visit my property?"
  • "Can I get an advance payment for temporary housing/emergency costs?"

 

During the Claims Process:

  • "Can you explain the estimate line by line?"
  • "Why was [specific item] excluded from coverage?"
  • "What is the timeline for receiving payment?"
  • "If I disagree with the estimate, what is my recourse?"
  • "Do I need to get multiple bids?"
  • "Will this claim affect my future premiums?"

 

Part 3: What Your Insurance Company Will Require From You

Documentation Requirements (Start Immediately)

Photographic/Video Evidence:

  • BEFORE cleanup: Wide shots of all affected areas from multiple angles
  • Close-ups of specific damage (water lines, structural issues, damaged items)
  • Serial numbers and model numbers of damaged appliances/electronics
  • Time-stamped photos (most smartphones do this automatically)
  • Progress photos during cleanup and restoration
  • Photos of items being discarded (document before disposal)

Written Documentation:

  • Detailed written descriptions of damage (include odors, sounds, temperatures)
  • Source and cause of damage (if known)
  • Timeline of when damage occurred/was discovered
  • List of all damaged items with approximate age and purchase price
  • Receipts for emergency repairs and temporary accommodations
  • Records of all communication with insurance company (dates, names, what was discussed)

Financial Records:

  • Receipts for ALL expenses related to the disaster:
    • Emergency repairs
    • Temporary housing
    • Meals (if covered under ALE)
    • Replacement clothing/necessities
    • Storage costs
    • Cleaning supplies
    • Professional services (restoration, cleaning, contractors)
  • Keep originals and make copies

Home Inventory (Critical - Do This NOW, Before Disaster):

  • Room-by-room video walkthrough of your home
  • Photos of valuable items with purchase receipts
  • Appraisals for jewelry, art, antiques, collectibles
  • Copy of home improvement receipts
  • Store inventory off-site (cloud storage, safety deposit box)

 

Immediate Actions Required

Within First 24 Hours:

  1. Notify your insurance company - Claims must typically be filed within one year, but immediate notification is critical
  2. Stop the source (if possible and safe) - Turn off water, secure property
  3. Prevent further damage - This is YOUR responsibility:
    • Remove standing water
    • Cover broken windows/holes in roof
    • Move valuables to dry areas
    • Board up damaged entry points
  4. Document everything before cleanup
  5. Contact professional restoration company (like Total Restoration Services)

 

What NOT to Do:

  • Don't throw anything away until adjuster approves (except health hazards - document first)
  • Don't make permanent repairs before adjuster inspection
  • Don't sign releases or accept final settlements too quickly
  • Don't cash checks marked "final payment" if you expect more damage to emerge
  • Don't start major renovations without approval

 

Timeline Expectations

Typical Claims Process:

  • Days 1-3: Report claim, receive claim number, adjuster assigned
  • Days 3-10: Adjuster inspection scheduled and completed
  • Days 10-21: Initial estimate provided
  • Days 21-60: Negotiations, additional inspections if needed
  • Weeks 4-8: Claim finalized and payment issued (for smaller claims)
  • Months 2-6: Complex claims with structural damage

Important: Flood insurance claims can take 4-8 weeks before finalization and payment.

Part 4: Valuable Riders & Endorsements to Consider

 

Highly Recommended Add-Ons

WATER BACKUP & SUMP PUMP OVERFLOW

  • Cost: $50-250/year
  • Why: One of the most common claims in our region
  • Coverage: $5,000-$50,000
  • Consider if: You have a sump pump, basement, or live in an area with heavy rainfall/older sewer systems

GUARANTEED or EXTENDED REPLACEMENT COST

  • Cost: 5-10% of total premium (~$100-200/year on $2,000 premium)
  • Why: Construction costs fluctuate; this covers rebuilding even if costs exceed your dwelling limit
  • Guaranteed: Pays full rebuild cost regardless of policy limit
  • Extended: Adds 10-50% to dwelling coverage limit
  • Consider if: You want peace of mind that your home can be fully rebuilt

ORDINANCE OR LAW COVERAGE

  • Cost: Less than increasing dwelling coverage by the same amount
  • Why: Building codes change; may need expensive upgrades during reconstruction
  • Coverage: Typically adds 10-25% to dwelling coverage
  • Consider if: Your home is older and may not meet current building codes

FLOOD INSURANCE

  • Cost: Average $1,074/year (varies significantly by location)
  • Why: Standard policies don't cover flooding
  • Coverage: Up to $250,000 structure, $100,000 contents through NFIP
  • Consider if: You live near water, in a flood zone, or in low-lying areas
  • Note: 30-day waiting period before coverage begins - don't wait for a storm warning!

EARTHQUAKE INSURANCE

  • Cost: Varies significantly (higher in high-risk areas)
  • Why: British Columbia is in an earthquake zone
  • Coverage: Separate deductibles, often 10-20% of dwelling coverage
  • Consider if: You live in BC (which you do!) and cannot self-insure this risk

SCHEDULED PERSONAL PROPERTY (Valuable Items)

  • Cost: 1-3% of item value per year
  • Why: Covers specific valuable items at agreed value with no deductible
  • Coverage: Jewelry, fine art, antiques, collectibles, musical instruments, camera equipment
  • Benefits:
    • Covers "mysterious disappearance" (lost items)
    • No deductible
    • Agreed value (no depreciation)
    • Broader coverage than standard policy
  • Requires: Appraisals or purchase receipts
  • Consider if: You own items worth more than sub-limits ($1,500 jewelry limit is common)

IDENTITY THEFT COVERAGE

  • Cost: $25-50/year
  • Coverage: $10,000-$25,000 for expenses related to identity theft
  • Consider if: You want protection for costs of restoring your identity

HOME BUSINESS/OFFICE EQUIPMENT

  • Cost: Varies based on equipment value
  • Why: Standard policies limit business property to ~$2,500
  • Coverage: Extended property coverage and liability protection
  • Consider if: You work from home or run a home-based business

SERVICE LINE COVERAGE

  • Cost: $50-100/year
  • Why: Covers repair/replacement of underground utility lines (water, sewer, electrical, data)
  • Coverage: $10,000-$25,000
  • Consider if: You have older infrastructure or want protection from this expensive repair

INFLATION GUARD

  • Cost: Minimal
  • Why: Automatically increases dwelling coverage by percentage each year to keep pace with inflation
  • Coverage: Typically 2-4% annual increase
  • Consider if: You want coverage to keep pace with construction cost increases

 

Add-Ons You Probably Don't Need

EXTENDED COVERAGE on COMMON ELECTRONICS

  • Standard coverage usually sufficient for TVs, computers unless very high-end
  • Consider if individual items exceed $5,000

COVERAGE FOR OLDER, LOW-VALUE ITEMS

  • Don't over-insure depreciated items
  • Not cost-effective to schedule items worth less than $2,000

UNNECESSARY INCREASE IN DWELLING COVERAGE

  • Don't confuse market value with rebuild cost
  • Land value doesn't need to be insured
  • Get a professional rebuild cost estimate, not just market appraisal

 

Part 5: Pro Tips - Preparation & Protection

Before Disaster Strikes

Documentation & Preparation:

Create and maintain a home inventory

  • Room-by-room video walkthrough annually
  • Store digitally off-site (cloud, email to yourself)
  • Update after major purchases

Review your policy annually

  • Construction costs change
  • Your possessions change
  • Coverage needs evolve
  • Schedule an annual review with your agent

Understand your specific deductibles

  • Different deductibles may apply to different perils
  • Know what you'll pay out-of-pocket for various scenarios
  • Budget accordingly

Keep maintenance records

  • Photos of HVAC servicing, roof inspections, plumbing work
  • These prove you maintained your home
  • Can be critical if insurance questions neglect

Store important documents safely

  • Insurance policy
  • Home inventory
  • Receipts for valuables
  • Renovation/improvement records
  • Keep copies off-site or in cloud storage

Know your agent's after-hours contact

  • Disasters don't happen 9-5
  • Have 24/7 claims contact information accessible

Photograph/document upgrades and improvements

  • New kitchen? Document it.
  • Finished basement? Document it.
  • These increase rebuild cost and should increase your coverage

Install preventative measures

  • Water sensors near appliances, water heater, sump pump
  • Backwater valve to prevent sewer backup
  • Sump pump with battery backup
  • Modern smoke and CO detectors
  • These may reduce premiums and prevent claims

 

When Disaster Strikes

Act IMMEDIATELY

  • Speed is critical for both damage mitigation and claims
  • Water damage worsens every hour
  • Mold can begin growing within 24-48 hours
  • Call restoration professionals immediately

Document before cleaning

  • Insurance needs proof of pre-cleanup damage
  • Take photos/video before any cleanup or repairs
  • Save samples of damaged materials (carpet, drywall)

Mitigate further damage - It's YOUR obligation

  • Board up windows
  • Tarp damaged roof
  • Remove standing water
  • Move valuables
  • Keep receipts - these costs are typically reimbursable

Don't throw things away prematurely

  • Adjuster needs to see damage
  • Exception: Health hazards (sewage, toxic materials) - document FIRST
  • Ask your adjuster before disposing of anything

Keep a claim journal

  • Date and time of all calls
  • Names of everyone you speak with
  • Summary of conversations
  • Reference numbers
  • This creates a paper trail if disputes arise

Get everything in writing

  • Verbal promises aren't enforceable
  • Email confirmations of phone conversations
  • Keep all correspondence

Don't accept first offer blindly

  • You can "reopen" claims within the policy timeframe
  • Hidden damage often emerges later
  • Initial payments are often advances, not final settlement

Work with professionals who know insurance

  • Restoration companies like Total Restoration Services work with insurance daily
  • We know what documentation insurers require
  • We can help ensure nothing is missed
  • We prepare detailed estimates in insurance-accepted formats

 

During Claims Process

Be present during adjuster inspection

  • Point out ALL damage
  • Don't assume they'll see everything
  • Ask questions about coverage

Get multiple estimates

  • Insurance may request this
  • Helps ensure fair pricing
  • Choose contractors experienced with insurance work

Understand the payment structure

  • First check: Typically ACV (actual cash value)
  • Second check: Depreciation held back (paid after repairs complete)
  • ALE payments: Separate from dwelling/contents
  • Don't expect one lump sum

Know your rights

  • You can hire a public adjuster (they work for you, not insurance company)
  • You can dispute estimates
  • You can appeal denied claims
  • You can involve your provincial insurance regulator if needed

Choose your contractor carefully

  • Licensed and insured
  • Experienced with insurance restoration
  • Don't accept "we'll waive your deductible" offers (this is illegal)
  • Check references and reviews

 

Financial Tips

Understand tax implications

  • Insurance proceeds generally not taxable
  • But there are exceptions
  • Consult tax professional for large claims

Save proof of deductible payment

  • BC law requires this
  • Insurance may request proof you paid your deductible
  • Keep cancelled checks or receipts

Consider increasing deductible to lower premiums

  • If you can afford higher out-of-pocket costs
  • Can save 15-30% on premiums
  • Ensure you have emergency fund to cover it

Don't make small claims

  • Claims history affects premiums
  • Small claims can cost you more long-term
  • Consider self-insuring minor damage ($2,000-3,000 range)

 

Regional Considerations for North Okanagan/Shuswap/Thompson

Frozen pipe prevention

  • Insulate pipes in unheated areas
  • Keep heat on when away
  • Shut off water and drain pipes if vacant in winter
  • Document winterization if leaving property vacant

Spring runoff awareness

  • Review flood insurance before spring
  • Clear drainage around property
  • Test sump pump before spring melt
  • Document pre-season preparations

Vacation/rental property considerations

  • Different policy may be required
  • Seasonal occupancy affects coverage
  • Notify insurer of rental use
  • Short-term rentals (Airbnb) need special coverage

Snow load documentation

  • Heavy snow years can cause roof damage
  • Document roof snow removal
  • Know your policy's roof coverage terms

 

Knowledge is Your Best Insurance

Understanding your insurance policy is just as important as having one.

The information in this guide can help you:

✓ Make informed decisions about coverage before disaster strikes

✓ Avoid costly gaps in protection

✓ Know what questions to ask your insurance provider

✓ Be prepared when disaster strikes ✓ Navigate the claims process more effectively

✓ Maximize your claim settlement

At Total Restoration Services, we're here to help North Okanagan & Shuswap homeowners through every step of disaster recovery. Our team works with insurance companies every day and knows exactly what documentation and processes are required to ensure your claim is handled smoothly.

 

Remember: The best time to review your insurance coverage is BEFORE you need it.

 

Bonus: Pro Tips

  • Get a “binder” (not just a quote) to lock in coverage before wildfire season starts. 
  • Review your policy annually, especially if you’ve made FireSmart upgrades or added structures.
  • Ask your broker to go over your exclusions. As an example, some policies won’t cover landscaping or may require defensible space to qualify for full coverage.