After nearly 50 years working with homeowners and drivers across Nova Scotia and PEI, Cluett brokers have heard a lot of assumptions about how insurance works.
Most of them are understandable. Policies are long, the language isn’t always plain, and over time the details get simplified into rules of thumb that feel true but aren’t quite accurate.
The problem is that these assumptions only get tested when something goes wrong. Here are five of the most common ones, and what’s actually true.
Myth 1: My Home Insurance Covers Every Kind of Water Damage
This is probably the most widespread misconception Cluett brokers encounter, and it comes up most often right after a flooding event.
The reality is that water damage coverage depends entirely on where the water came from. A burst pipe is typically covered. Water that enters from the ground during heavy rain, called overland flooding, usually is not. Neither is water that backs up through your drains due to an overwhelmed municipal system, known as sewer backup.
Both overland water and sewer backup coverage are available as endorsements that many Atlantic Canadian homeowners add to their policies. But they are not automatic. If you’re not sure whether you have them, it’s worth a quick call to find out, especially heading into fall when heavy rain events become more frequent.
Myth 2: My Landlord’s Insurance Covers My Belongings
This one surprises renters consistently.
Your landlord’s insurance covers the building. It does not cover your personal property or your personal liability. If a fire or break-in damages your furniture, electronics, and belongings, your landlord’s policy does not respond to that loss.
Tenant insurance in Nova Scotia and PEI is inexpensive, straightforward to set up, and covers both your belongings and your liability if someone is injured in your unit. If you’re renting without it, it’s one of the easiest gaps to close.
Myth 3: The Cheapest Policy Gives Me the Same Protection
Price comparison is a reasonable starting point. But the lowest premium does not mean equivalent coverage.
Policies differ in what they exclude, what the deductibles are, and how claims are settled. A lower premium can reflect a genuine gap in protection that only becomes visible after a claim is filed.
This is one of the clearest advantages of working with a broker. A broker can show you what’s actually different between two policies, not just what they cost. Sometimes the price gap reflects a real difference in coverage. Sometimes it doesn’t. Knowing which one before something happens is considerably more useful than finding out afterward.
Myth 4: My Home’s Market Value Is the Same as What It Would Cost to Rebuild
These are two very different numbers, and confusing them is one of the most common causes of underinsurance in Atlantic Canada.
Market value is what your home would sell for today. It includes the land, the location, and current buyer demand.
Replacement cost is what it would take to rebuild your home from the ground up, same size, same quality, at today’s labour and material prices.
These numbers can diverge significantly. In recent years, construction costs across Atlantic Canada have risen substantially. A home that was accurately insured a few years ago may no longer be covered for enough to fully rebuild today. If your insured value hasn’t been reviewed recently, that’s a conversation worth having.
Myth 5: I Only Need to Update My Insurance When I Make a Claim
Your policy is a snapshot of your situation at a specific point in time. When your situation changes, that snapshot becomes inaccurate.
Life changes worth reporting to your broker include completing a renovation, adding a structure to your property, starting a business from home, purchasing high-value items, and adding a driver to your household. None of these require a claim to trigger an update.
The goal is straightforward: make sure the policy you’re paying for actually does what you expect when you need it. A short conversation with your broker after a meaningful change is far easier than discovering a gap at the worst possible moment.
Still Have Questions About Your Own Coverage?
If any of these made you uncertain about your own policy, that’s a good sign it’s worth looking into.
At Cluett, we’re local, independent, and happy to give you a straight answer, no obligation.
Contact us directly or get a quote and we’ll take it from there.
Reach out to us today to see Cluett helps!