When the time comes to buy a house or rent an apartment, home insurance isn’t the most exciting thing on your mind! But it’s a necessary step to take before moving day. If you’re new to insurance, this guide to home insurance is for you! First, we explain why you should buy home insurance. Next, the type of insurance policy and coverage that’s right for you.
Home insurance is not legally required in Canada if your home is fully paid up. But you’ll need it to get a mortgage from a mortgage lender.
Although not compulsory, home insurance helps you sleep well at night, whether you own a home or rent. It protects your property and personal belongings against damage, loss, theft and vandalism. What’s more, if you have to leave your home temporarily following a covered loss, home insurance covers your living expenses. Finally, home insurance can also cover medical expenses if someone is injured while visiting your property.
In short, your home is much more than just a place to sleep. Rather, it’s a place where you live and where your most precious items are stored. So it’s very important to be protected against damage or loss.
To compare home insurance quotes, feel free to use our tool.
As we mentioned earlier, you don’t just need insurance when you buy a single-family home. There are also other properties you should consider insuring, such as a rental building, condo, vacation home or cottage.
Here’s more information on each type of home insurance…
Homeowner’s insurance is a type of insurance for owners of detached houses, covering the building as well as detached structures such as sheds. Most homeowners opt for comprehensive coverage, as it offers the best protection for their home and personal belongings.
Tenant insurance is designed for people who rent an apartment, condo or house. It mainly protects your personal property, but also covers the medical expenses of visitors who are injured on the rented property. Tenant’s insurance does not cover damage to the building (the landlord is insured for this). But it does cover living expenses if you have to move temporarily to carry out repairs following an insured loss.
If you own a condominium, you’ll opt for condo insurance. Like home insurance, condo insurance protects your unit and your personal property. It also covers shared common areas such as the gym, roof, garage, etc. You’ll also be covered if you have to live elsewhere during maintenance or repair work on your building or condominium unit.
Do you have a vacation home or cottage? If this is the case, you’ll need to take out vacant home insurance. This type of policy requires you to choose your perils (or risks), as the risk of damage is higher since you’re not there all year round. Many insurance companies will list both your permanent and secondary residence on the same policy.
Landlord insurance is required for owners of rental properties who rent out their property to others. Like homeowner’s insurance, this type of policy protects the building and covers civil liability if someone is injured on the property. The main difference is that landlord insurance can reimburse lost rental income if the building or dwelling is damaged and tenants are unable to occupy it.
When you choose a home insurance policy, you get a number of coverages, including personal property and liability coverage. Personal property coverage protects you financially against loss or damage to your personal property and home. Liability coverage legally protects you from liability for losses caused by injuries to visitors to your home.
Once that’s settled, there are three types of home insurance policies to consider:
Here’s more information on each of them…
A comprehensive home insurance policy offers the best coverage for your home and personal belongings. It protects you financially against loss, damage (fire, vandalism, natural disasters) or theft of your personal belongings and your home. Although more expensive, it’s the most popular choice for Canadians because of its comprehensive coverage. Use our tool to compare home insurances and find the best policy for your needs.
A basic home insurance policy offers less protection than comprehensive coverage, since it only protects you financially against the risks listed in your policy. This means that not all accidents or events such as theft, flood or fire will be covered. The advantage is that your monthly premium will be lower with basic coverage than with comprehensive coverage.
That said, you need to understand the types of risks covered by your policy before making your decision.
An extended home insurance policy is somewhere between basic and comprehensive coverage. With comprehensive home insurance, you’re covered against all risks except those listed as exclusions in your policy. This means that your home may not be protected against certain events, such as an earthquake, but is covered for all other risks.
Contact your insurance agent or broker to find out exactly what your current policy covers. Since not all risks are covered, an extended home insurance policy generally costs less than full coverage, but more than basic coverage.
Home insurance policies in Canada are quite comprehensive. They include the standard protections, but you can also add additional (optional) protections.
Here’s more information on these types of insurance coverage…
Standard protections include :
Optional coverage includes :
For each of these insurance coverages, conditions and limits apply. For example, water damage coverage and insurance amounts. Check your home insurance contract with your current insurer, as well as with other insurance companies.
As mentioned earlier, it’s very important to understand the types of risks that are covered by your policy before taking out or renewing home insurance. In general, your insurance policy covers disasters or unexpected events such as floods, theft or wind or hail storms.
Usually, home insurance does not cover foreseeable events, also known as speculative risks. An example of a speculative risk would be leaving a candle burning all night in your bathroom, causing a fire. The outcome of the action was foreseeable and, if you’re at fault, your insurance policy won’t cover the cost of repairing your home. Other examples include damage caused by lack of maintenance, normal wear and tear, intentional damage or unoccupied homes.
Again, be sure to speak with your insurance company to understand what is and isn’t covered. If necessary, talk to an insurance broker like YouSet.
In short, home insurance isn’t the most exciting part of renting or buying a property. But it’s essential to protect your personal property, among other things. We hope this comprehensive guide to home insurance has answered your questions, and that you can now make an informed choice.
Finally, don’t forget to use our home insurance comparison tool to find the best policy for your needs.
The average cost of a home insurance policy varies according to a number of criteria, including place of residence, type of property (house, condo, rental) and type of coverage (basic, extended, comprehensive). In Quebec and Ontario, the average cost of home insurance is $87 ($1044/year) for a house, $31/month ($372/year) for a condo and $23.50/month ($282/year) for a rental, according to our partner YouSet.
The cheapest home insurance is basic home insurance. It offers coverage limited to the risks listed in your insurance policy. Although more affordable, you should be prepared to cover the cost of any damage not included.
No. Canadian law does not require you to take out home insurance. But mortgage lenders require it for properties that are not fully paid up. In other words, to get a mortgage. That said, home insurance is still important to protect your personal property in the event of theft, vandalism, fire and much more.
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