What is homeowner’s insurance in Canada?

To the point Homeowner's insurance differs from landlord's insurance. This article explains these differences, as well as the different levels of protection.

Whether you own a house, a condo, a cottage or a rental property you live in, homeowner’s insurance helps protect your property and personal belongings against the damages and insured loss. In this article, we explain what homeowner’s insurance is, the different levels of coverage, the differences between landlord’s insurance and home insurance, and the tools you can use to compare home insurance policies.

What is homeowner's insurance?

Home insurance is not legally required in Canada. However, mortgage lenders require it for properties that are not fully paid up. That said, homeowner’s insurance is essential to protect your property, personal belongings and potential liability claims.

Homeowner insurance covers homeowners with or without a mortgage, condo owners, cottage owners and owners of rental properties (which they live in).

What's the difference between homeowner's and landlord's insurance?

Landlord insurance differs from homeowner insurance. Of course, the choice between the two types of insurance depends on whether or not you occupy the property. But protection is different too.

Here are the main differences:

  • Landlord’s insurance: Landlord’s insurance is sometimes called non-occupant owner insurance. It protects a rental property that you do not live in. Coverage includes loss of rental income following an insured loss, damage to the building, in addition to the protections found in home insurance.
  • Homeowner’s insurance: Insurance for homeowners is simply called home insurance. It protects homeowners, condo and rental property you live in, against theft and claims. It covers property, personal belongings and civil liability. This is the insurance we explain in this article.

What is covered by homeowner's insurance?

Homeowner’s insurance policies in Canada are quite comprehensive. They cover the items below, but you can also add additional protection.

Standard protections include :

  • Dwelling: Protection of the physical structure of your property, including foundations, walls, roof and detached structures (e.g. deck, shed, etc.).
  • Personal belongings: Protection against loss or damage to your personal effects (furniture, clothing, jewelry, electronics, art, etc.) due to covered risks.
  • Civil liability: Protection against possible legal action for accidental injury or property damage.
  • Living expenses : Financial protection for expenses incurred if you have to leave your property temporarily due to a loss (e.g., hotel accommodation).

Optional coverage includes :

  • Water damage: Protection against water damage, such as sewer backup (e.g. sewer and septic tank), surface water (e.g. rain and snow melt), above-ground water (e.g. seepage through roof, doors and windows) and water leaks.
  • Identity theft: Protection against identity theft and fraud, covering legal fees and the recovery of your identity.
  • Earthquakes: Protection against damage caused by seismic tremors.

For each of these coverages, conditions and limits apply. For example, the types of damage covered and the amounts insured. Check with your insurer.

What are the different types of insurance and their levels of protection?

There are three types of home insurance, and they differ in their level of protection:

  • Basic home insurance: Limited protection to the risks covered by your insurance policy. It’s affordable, but it doesn’t cover all damage.
  • Comprehensive home insurance (all risks): The broadest coverage, including fire, theft, vandalism, natural disasters and civil liability. It’s more expensive, but offers optimum protection for your home and personal belongings.
  • Extended home insurance: Compromise between basic and comprehensive coverage. It’s not as comprehensive as full home insurance, but it offers relatively broad protection at an affordable price.

If necessary, don’t hesitate to talk to an insurance agent or damage insurance brokerage firm like YouSet.

What influences homeowner insurance premiums?

Several factors influence the cost of homeowner insurance premiums in Canada, including :

  • Type of property (house, condo, etc.)
  • Type of coverage (basic, extended, comprehensive)
  • Amount of insurance and deductible
  • Location of your home
  • Value of your home
  • Value of your personal belongings
  • Insurance claim history
  • Types of damage and claims covered
  • Additional insurance coverage
  • Limits and conditions of your insurance policy

How can you reduce your homeowner's insurance premiums?

Of course, homeowner’s insurance premiums vary from person to person, depending on a number of factors. But you can save money and pay less for your home insurance with the following tips:

  • Bundle your insurance: when you combine your home and car insurance on the same policy, you can save money. For example, you can save up to 15% when you combine your car and home insurance with our partner YouSet.
  • Increase your insurance deductible: you can reduce your insurance premium when you increase your insurance deductible.
  • Maintain your home: when your home is well maintained, you can save money. Some events are beyond your control, but regular maintenance can reduce your insurance costs. For example, annual maintenance costs generally represent 3-5% of your home’s value.
  • Compare home insurance premiums online: you can use our home insurance comparator to get several homeowner’s insurance quotes.
  • Pay your insurance premium in one lump sum: when you pay your home insurance premium for the year in one lump sum, many insurance companies offer a discount. What’s more, you could even unlock credit card sign-up bonuses.
  • Maintain a good credit score: a good credit score confirms to the insurer that you are able to pay your premium on time. If so, authorize your insurer to run a credit check, which will save you money.

Comment souscrire à une assurance propriétaire occupant ?

Before purchasing homeowner’s insurance or renewing your current policy, compare several quotes. Check the conditions, exclusions and coverage in the event of damage for each insurance company. To make this task easier, use our online comparator to compare home insurance quotes based on your specific needs.

That said, insurance is a complicated business. So don’t hesitate to ask a professional for advice. For example, you can contact a damage insurance brokerage firm like YouSet. They have access to several insurance companies and exclusive discounts. Hence, they can then present you with the best offer available on the market. On the other hand, an insurance agent only has access to the products of the insurance company he or she works for.

Bottom Line

In short, homeowner’s insurance protects your property and personal belongings against unforeseen events and claims. Although not legally required in Canada, we believe that home insurance is essential for owners of homes, condos, cottages and rental properties.

Finally, try our home insurance comparison tool to find the best policy for your needs.

Frequently asked questions about homeowner's insurance

What type of insurance should I choose as a homeowner?

If you live in the property or one of its units (owner-occupier), you must choose home insurance. On the other hand, if you don’t live in the property (non-occupant owner), you must choose landlord’s insurance.

Is home insurance mandatory in Quebec?

Home insurance is not legally required in Quebec or elsewhere in Canada. However, mortgage lenders require it for properties that are not fully paid up. That said, homeowners insurance and tenants insurance is essential to protect your personal belongings and your civil liability.

Why take out homeowner's insurance?

Buying a home is usually the biggest investment of your life. However, to protect your home and personal belongings in the event of a claim, you need home insurance. What’s more, if you’re a non-occupant owner, landlord’s insurance also covers loss of rental income following an insured loss.

Should you buy tenants insurance or homeowners insurance?

The choice of home insurance differs if you rent or own a property. Tenants must choose tenant’s insurance, while owners must choose between homeowner’s insurance, condo insurance or landlord’s insurance (if they don’t live in the rental property).

Who isn't required to insure their home?

Owners of fully paid-up homes are not legally required to buy home insurance.

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Vincent Morin
My name is Vincent and I've been a stay-at-home parent to two young boys since achieving financial independence in 2021 (FIRE). Previously, I worked for 12 years in financial technology for a major US investment bank (G-SIB). I'm passionate about personal finance, stock market investing, reading, writing, cycling and gardening. I'm also the founder of Retraite 101, a personal finance blog followed by over 20,000 people on social networks and quoted in several media, blogs and finance books. Despite early retirement, I continue to write about personal finance to share my passion with Quebecers and motivate them to take charge of their finances.

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