Based on what we’ve witnessed so far this year, the spring and summer housing market will continue to be turbulent. We’ve already seen exploding prices, bidding wars, scarce inventory, burned-out buyers, rising interest rates, a cooling in listing prices, and overall market uncertainty.
Depending on how many homes change hands this spring, a lot of British Columbians could be on the move in the months ahead. Plus, with so many of us working remotely from home now, both buyers and renters alike are looking for ways to get more square footage for their money, indoors and out.
For you, the reason for a move could be:
- You’re ready to buy your first home and realize it could happen fast; you’re elated (and a touch overwhelmed).
- You’ve upgraded to a larger space that’s suddenly within your budget – yep, that also means some renovations are needed.
- You’re ready to make the dream of owning a vacation property a reality, especially now that you can work remotely.
These are all exciting scenarios, but knowing the BC market, finding a new home to buy or rent, or a property to build a house can be understandably challenging. During the search process, it can be tempting to get caught up in bidding wars, and in competitive housing markets (like BC has faced for years), buyers often feel the pressure to move quickly and make seller-friendly offers, potentially with no subjects such as financing or inspections. However, there are risks involved with making a subject-free offer which you can learn more about here. And even after you’ve found your home, it’s only the beginning; there’s everything that comes next, including the move.
The reality of a chaotic housing market is that things can happen fast, and being prepared is key to ensuring the transition to your new home is smooth. We can help. Here are some essential insurance considerations to make sure you’re covered for the unexpected, whether you’re buying, looking to relocate or thinking about investing in a vacation property.
Preparing for the move
Once you’ve found your new home, signing the paperwork is incredibly exciting, relieving and daunting, all at once. As soon as the ink dries, it’s time to start preparing for what comes next, and an important first step is setting up your home insurance.
- If you’ve purchased your new home. First off, you’ll need home insurance to be approved for a mortgage. It’s crucial to ensure that you have home insurance starting on the completion date when the property officially transfers ownership from the seller to the buyer (you!). Even if you have yet to take possession of your home, it is now legally your responsibility. It’s key to know your completion and possession dates and share them with your insurer to ensure there’s no gap in coverage.
- Plan ahead and protect your new space. It’s also important to check in with your insurance provider if you’re not planning to move right away, as there may be specific scenarios not covered by your insurance (this is called a vacancy exclusion). A vacant home is more vulnerable to things like glass breakage, water damage, vandalism or theft. Your insurance advisor can help explore extended coverage options to ensure your new space is protected in the days leading up to and during your move.
- How insurance works during a move. If you’re moving within BC and have an existing home insurance policy, your personal belongings are most often covered while in transit. And if you’re putting some (or all) of your belongings in a storage facility while moving, they could be covered for several days – check with your insurance provider to confirm how long that may be.
As long as you have your new address and moving date set up, you can call us to schedule the switch to your policy ahead of time. And if your coverage needs will be changing at your new home, we can help create a new policy for you.
Helpful tip: If moving right now feels a bit overwhelming, we can help with that too. Here are some tips on how to stay safe while moving during a pandemic.
Renovating before moving in
As British Columbians seek more space, some are making a trade-off: to get the square footage desired, many opt for a home in need of some work.
So, if you’re planning updates to make your new place a bit more “you,” it’s important to tell your insurer about the work being done. Depending on the scope of the renovations, you may need to purchase a layer of construction coverage. Without that extra coverage, you won't be covered if something were to happen during the renovations.
Additionally, if you are not moving into your home right away for renovations or other reasons, it’s necessary to let your insurer know that too; vacancy exclusions (as explained above) may apply. Essentially, you’ll want to check to ensure you have protection against things like glass breakage, theft, water damage and vandalism, which are more common in an unoccupied home. If you’re between homes, make sure that you keep coverage at your current residence – don’t cancel it! Home Insurance is flexible to cover multiple properties at once and can easily be updated once you’ve settled into your new space.
Building a new home
A level up from renovating a new home is building one from scratch. Whether you’re tearing down an existing property and building in its place or building on vacant land, there are a lot of moving parts. Be prepared and get insurance for every stage of the building process – very often a requirement if you have a mortgage. What you’ll want to speak to your insurance advisor about is something called course of construction coverage or at BCAA what we call under construction coverage. It restores protection for previously excluded coverage such as water damage, glass breakage and vandalism. Course of construction coverage covers new homes, built by an owner or general contractor. It also covers an existing unoccupied home or condo that’s undergoing substantial renovations.
Helpful tip #1: It’s essential to get coverage before the shovel hits the ground, as purchasing insurance after the fact may be tricky or cost more.
Helpful tip #2: You’ll be keeping tabs on all the work done, but don’t forget to share updates with your insurance provider! Plans are quick to change, and this could impact your coverage.
Buying an investment or recreational property
With more people able to work remotely, another home-buying trend we’ve witnessed is purchasing a second property. It could be a vacation/seasonal property, a rental property or a hybrid of both.
When it comes to properties you’re infrequently visiting, say less than monthly, for example, there are several additional elements you should consider and plan for. In BC, seasonal or vacation properties often take the form of a cabin and might be more remote, plus many have unique features that differ from your primary residence.
Helpful tip #1: Check in with your insurance provider during the search process. They will advise on certain details you may want to look out for, helping you ask the right questions before purchase.
Helpful tip #2: If you plan to rent out your property on occasion, we highly recommend you get rental coverage. It will cover you for scenarios such as the theft of items by a guest. With BCAA Home Insurance, there are options for both short and long-term stays in your condo, house, seasonal home and/or vacation property.
We’re always here to help
Finding and getting settled into a new home is an exciting endeavour, but the process of actually moving, renovating or building a home can be overwhelming. Taking the time to make sure you’re covered will help put your mind at ease, so you can focus on enjoying the experience of creating your new home.
Whether you’re looking for coverage as a renter or a homeowner, learn more about our home insurance options here. More questions? Get in touch and speak with one of our expert advisors who can help build you customized coverage for your unique situation. Better yet, BCAA Members can save up to 20% on home insurance plus you'll save an additional 5% if you buy online. Happy moving!