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Everything You Need to Know About Home Insurance in Canada

everything you need to know about home insurance in canada f

Getting home insurance should be the top priority of a homeowner. The right policy can protect your important investment and cover the costs if an unexpected event occurs. If you are planning to get coverage in Canada, read on to learn the essentials so you can make the best decision.

What is Home Insurance?

Home insurance protects you, your home, and your belongings if something happens. Most home insurance policies provide coverage for damage to your home and possessions due to theft or fire and additional living expenses should your home become uninhabitable due to an insured event. They also cover personal liability if someone gets injured on your property.

Do You Legally Need Home Insurance in Canada?

Unlike auto insurance, homeowners in Canada are not legally required to have home insurance. However, it is beneficial for every property owner to have something in place for the following reasons:

  • Financial Security
    Owning a home is a huge responsibility. Moreover, your financial security could be negatively affected if something goes wrong, and you are not adequately protected. Having a comprehensive home insurance policy can help you deal with unforeseen circumstances.
  • Mortgage Requirements
    If you’re applying for a mortgage, your lender or bank may need you to hold a valid home insurance policy so they know that the property is protected.
  • Peace of Mind
    Having basic insurance coverage allows you some peace of mind. You can be confident that if something happens to your property, you can replace your belongings and repair your home.

What Does Home Insurance Cover?

This depends on your specific needs and how much you are looking to pay. Every home insurance policy offers a variety of coverage options. The standard policy includes the following:

  • Damages to your home
  • Theft, damage, or loss of your possessions
  • Injury or damage caused to others when they visited your property
  • Any belongings that are stolen from your vehicle
  • Accidental damage that you may have caused to someone else’s property

In addition to this, you may opt for additional coverage such as overland water damage, sewer backup, and more, depending on your needs and circumstances. You may also insure expensive jewellery and other valuables.

Types of Home Insurance

Since one policy may not suit everyone, it is essential to assess different home insurance quotes and find one that fits your lifestyle. An insurance broker can help you find the best policy for your needs at the lowest price available. Here are the main types of insurance:

  • Comprehensive
    Also referred to as an all-perils policy, it covers your home and contents, except any risks that may be included in the policy as exclusions. This policy is your best option if you want to protect the essentials.
  • Standard
    Also known as a named perils or basic policy, this type of home insurance policy offers less coverage as compared to comprehensive coverage. It includes the risks to your home and contents that you may name specifically. If you are looking to save on the premium amount and you’re prepared to take the financial risk, you may want to choose this option.
  • Broad
    This policy falls between the standard and comprehensive policies. It covers all risks to your home, except for those specifically named in the policy, and includes only specific contents you choose to add. If comprehensive home insurance costs more than what you can afford, but a standard policy doesn’t suit your needs, you may opt for broad coverage.
  • Personal Liability
    As a homeowner, you may be held liable for any unintentional injury or property damage caused to others on your property. Most home insurance policies have a clause to cover unexpected events that occur on your property. This is why whether you own a house or live in a rented property, having personal liability insurance is essential.

Also Read: Insurance Tips & Advice for First-Time Home Buyers

Factors that May Have an Impact on Your Home Insurance Premium

  • Location
    If your house is in a neighbourhood that has a high number of house fires, burglaries, cases of vandalism, or anything else that may lead to a claim, your premium may be higher.
  • Primary Use
    If you have plans to rent out your basement, allow booking on Airbnb, or want to use your house as an office, you need to inform your insurance provider to make sure you have adequate coverage.
  • Roofing System’s Age
    Having an old roof is more likely to raise the cost of your insurance because it increases the chances of problems such as mould growth, leaks, and more.
  • Heat Source
    The way you heat your home can have an impact on the premium because certain heat sources tend to be riskier.
  • Electrical Distribution
    If you want to find an affordable home insurance policy, it is best to have insulated wiring to decrease the risk involved.
  • Plumbing & Pipes
    Ensuring that the plumbing is less likely to leak, crack, or get damaged can be beneficial when looking for home insurance coverage. Insurers prefer copper or plastic pipes and more modern technology.
  • Claims History
    Your previous claims determine your future insurance needs. If you have a history of filing claims, providers may consider you high risk and charge a higher premium.
  • Proximity to a Fire Station
    Insurers need reassurance that local fire services and a fire hydrant or other suitable water source are available in case of an emergency. If these services are easily accessible, your premium amount may not increase.
  • Security System
    An alarm system monitored by a security service will help reduce your insurance costs because it acts as a deterrent to thieves.
  • Property Value
    Your home’s area and materials used may impact insurance costs. The larger your home, the higher your premium will be.

Tips to Get Affordable Home Insurance Quotes

  • Shop Around – Consider your specific needs and ask questions to choose the right coverage option.
  • Pay Annual Premiums – Many providers offer reduced rates if you pay an annual lump sum for your home insurance premium.
  • Multi-Line Discount – Combine your home and auto insurance to save on the overall cost.
  • Increase Security – Reduce the likelihood of making a claim by enhancing security, installing a durable roof, and more to get reasonable rates.
  • Lifestyle Changes – Pay off the mortgage, quit smoking, and adopt other changes to benefit from potential savings with your insurance provider.
  • Review the Policy Annually – Ensure all the clauses are still applicable to you and update the coverage every year accordingly.
  • Enquire About Discounts – Ask your insurance broker or provider about any discounts or incentives to lower your premium rate.

Let Us Help You Find an Affordable Home Insurance Policy

Affordable Home Insurance Policy

If you are looking to buy home and auto insurance in Canada, we can assist you. Our brokers will work closely with you to understand your needs and help you find suitable coverage to safeguard your home.

For more details about our insurance products and services, call us toll-free at 1-866-521-5926 or 905-833-6691. You could also fill out our online form to get a home insurance quote.

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