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Updated
Owning a home in Canada has become incredibly expensive, which is why finding low-cost home insurance is an absolute necessity these days.
According to Zoocasa, a real estate brokerage, property prices have nearly doubled since the 2010s – with the national average rising from $417,000 in 2013 to $779,100 in 2023. Meanwhile, Canadian census data shows that the median income in the country has remained more or less the same since the 1990s, making it tough to buy a home in the first place, especially for younger people.
The cherry on top is the rising cost of home insurance, driven largely by an increase in natural catastrophes and severe weather events. According to the Insurance Bureau of Canada (IBC), natural disasters have cost Canada over $3 billion in insured damage for multiple consecutive years. Because of that, Canada has become a much riskier place to insure – which in turn has led to a premium hike.
If you’re a homeowner in search of savings, we’d like to assist you with the insurance part of the equation. Assuming you don’t intend to ditch your home insurance altogether (something we would never recommend!), check out our ultimate guide on how to save on house insurance in Canada.
Sometimes, we buy more home insurance coverage than we need, especially if we go down the path of optional coverage or add-ons. For example, you may decide to add earthquake coverage to your policy, believing that earthquake a risk in your area. However, in most of Canada, earthquakes are either rare or unimpactful, making this coverage mostly unnecessary. If you haven’t already done so, be sure to carefully examine your policy for any coverages that could be eliminated.
Did you know that increasing your home insurance deductible can lower your premiums? While most standard home insurance deductibles are around $1,000, they can be raised to $2,000 or even $2,500, which in turn can lower your premiums.
Do note that you would have to pay more out of pocket when filing a claim in the event of a disaster. For instance, if the cost to repair your home is $30,000, and your deductible is $2,000, then your insurance would cover $28,000. You’d have to cover that remaining $2,000 yourself.
Our advice is to strike a balance between lower premiums and a high deductible in a way that matches your financial capabilities. Ensure that your deductible is not too high, or you may find yourself in a dire financial situation.
If the personal possessions you keep on your property are worth less than the coverage you’re paying for, then you’re likely overpaying for your home insurance. The inverse can also be true – especially if you own multiple high-value items such as fine art or jewelry.
The best way to determine how much your possessions are worth, and if you’re covered, is by creating a checklist of all your items (including furniture, electronics and clothing) and assigning monetary value to each item. If the total value of all your possessions ends up being lower than your current coverage, then you may want to reduce it.
The cost of rebuilding your home – should it get destroyed – is not the same as the cost you pay when you buy it. Depending on where and when you bought your home, the cost of rebuilding it may be lower than the cost you’ve paid for it. It’s worth exploring this with your provider to make sure you’re not paying for more coverage than you need. There are three ways to calculate your rebuilding costs:
Not all losses or damage are worth filing a claim for. Losses that are relatively inexpensive are rarely worth the effort. For example, if your deductible is $1,000 and your loss is $1,200, then you’d be filing a claim for $200. Ask yourself if that $200 is worth the increase in premiums down the road. Chances are, it isn’t. If you’re claims-free, you may also be getting a discount for that. Filing a claim may disqualify you from receiving it.
As a rule of thumb, you should file a home insurance claim only if you’ve suffered a major loss – valued at thousands or tens of thousands of dollars. An example of that may be a part of your home burning down or a good portion of your personal possessions getting stolen or purposely destroyed.
It’s your home, so be sure to keep it in good shape. Repair your roof every ten years (or sooner), keep an eye out for leaky pipes and do your best to prevent mold and insect or rodent infestations.
The better you maintain your home, the less likely it is to incur any significant damage. For example, a well-maintained roof is more likely to withstand a windstorm than a poorly maintained one. Moreover, a poorly maintained roof can also cause different types of internal damage to your home – some of which you may not even notice until it’s too late. It’s cheaper to invest in maintenance than to pay for repairs or suffer higher premiums due to filing a claim.
So, do yourself a favour and invest in your home before it becomes a huge problem (it will be cheaper in the long run).
Never settle for the first home insurance quote you receive. Research other providers on the market and compare their quotes before deciding on the one that suits your needs best. You can do the research manually – by looking up insurers one by one and then calling each of them, or you can get others to do the work for you. A broker may be helpful in this regard. Scoop Insurance is one such broker, if you’re interested in this option. Alternatively, you can look up home insurance quotes online right now via our comparison tool here on RATESDOTCA. The choice is yours.
If you’re looking for additional ways to save on home insurance, here are some that you should consider:
If you own one or multiple vehicles or one or more additional properties – such as a seasonal or rental property – then consider bundling them all under one provider. Doing so will simplify your payment and can get you a discount of up to 15%.
If you have a monitored fire alarm system, which includes smoke and carbon monoxide detectors, alongside the ability to notify the fire department in case of a fire, then you may be eligible for a home insurance discount. If you can, add an automatic sprinkler, as that can also lead to a discount. A robust fire alarm system is a good idea in general, since it can prevent fires from spreading far enough to cause major damage – and most importantly, it can save lives.
If your home has security measures such as cameras, burglar alarms and motion sensors, you may be eligible for a discount. Overall, the more protected your home is from theft and vandalism, the less risky it is to insure, which means lower premiums.
A sump pump – a device that transports water from your basement to the outside – can help you prevent floods and avoid major damage to your home. If you have it installed in your home, your insurer may give you a discount.
Instead of paying for your insurance on a monthly basis, consider paying for it once a year. It’s less costly for insurers to process one payment instead of 12, which can lead to lower payments for you.
Quitting smoking isn’t only good for your health, it’s good for your wallet too. Presence of cigarettes, matches and lighters increases the risk of fires breaking out inside your home. This means that smokers are forced to pay higher premiums than non-smokers – in addition to dealing with a lower resale value of their home.
Unlike in the US, home insurance companies in Canada cannot check your credit score without your explicit permission. However, you can allow your insurer to check your score anyway, because a high score means that you are less risky to insure (apparently, homeowners with good credit scores are statistically less likely to file a claim). What’s great about doing a credit check in Canada is that insurers are prohibited from increasing your premium, if your score is too low. They can only lower the premium (provided the score is high enough). So, it’s a win-win, no matter how you slice it.
Before moving into a neighbourhood, do as much research about it as you can. Make sure that it’s safe not only from criminals but from various potential disasters (man-made or natural). The frequency of floods, catastrophic weather events and similar calamities can have a profound effect on your premiums.
Of course, moving to a safer neighbourhood is easier said than done, as homes in less safe areas are likely to be cheaper. However, you need to think about savings holistically. Sure, initially, you may secure a cheaper home, but down the road, you may spend more on premiums and potential damage to your home. You have to weigh your options carefully.
Don’t be afraid to ask your insurance provider about the discounts that they may offer. There are plenty that may surprise you. Here are some of them:
Taras has over nine years of content marketing experience across multiple industries in B2B and B2C spaces. He has produced thought leadership content for organizations like Constellation Software, Facebook and Yellow Pages as well as outlets like Huffington Post and MSN Canada.
He graduated from York University with a Bachelor of Arts degree and studied Technical Communication at Seneca College.
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