Ontario Home Insurance Calculator

How is home insurance calculated in Ontario? 

Property insurance or home insurance is not a mandatory insurance product in Canada, however, many financial institutions or lenders will not offer you a mortgage if you don’t have home insurance.

Home insurance protects owners against instances that cause loss or damage to their property. It indemnifies the owner or user of the property, such as a tenant, for its loss or the ability to generate rental income, when the damage is caused by events such as fire or explosion which is covered by the insurance policy.

Home insurance is based on an exchange of promises between the homeowner and financial lender. The insured party or owner promises to pay a premium to the insurer in return of the insurer’s promise to assume the risk of loss to the homeowner.

In the event of loss or damage, the insurance company offers compensation to the insured as nearly as possible to the actual loss suffered and the financial position he or she enjoyed immediately prior to the loss.

Mandatory and optional home insurance coverage in Ontario

Owning a home in Ontario doesn’t require you by law to have home insurance. However, most lenders won’t provide a mortgage unless coverage is in place. As a result, most homeowners have it.

A home is likely to be your life’s big investment and asset, and to protect it will help you financially and emotionally in the event of a loss in the future. If the loss is covered in your insurance policy, the insurer will compensate you for it. With that comes some peace of mind.

Most home insurance policies also include liability protection which means that if someone is injured on your property, you will also be protected financially.

Climate change has become a harsh reality everyone has to deal with today. From wildfires to extreme cold conditions, homes in Canada are increasingly impacted by damage from climate change. The Insurance Bureau of Canada reports that in 2021, insured damage for severe weather events reached more than $2-billion, ranking it as the sixth highest in insured losses since 1983.

Following are some of the important details you need to consider when choosing coverage that’s right for you and your home.

Types of home insurance in Ontario

These are the most common types of home insurance coverage in Ontario.

Home insurance coverage

• Property and building: This insurance provides protection for both the physical structures on your property and the property itself against a range of potential risks. Covered incidents encompass fires, theft, water damage, and more. If you have secondary structures on your property, such as a garage or guest house, it's advisable to review your policy and consult your insurer if you have any questions regarding additional coverage requirements.
• Contents and personal property: Contents and personal property coverage provide security for your belongings, including items like furniture, clothing, and sports gear, safeguarding them from theft and acts of vandalism. However, it's important to note that valuable items such as fine art and high-value jewelry may not be covered by a standard policy. To ensure protection for these excluded items, you can obtain additional coverage.
• Additional living expenses: If you’re temporarily displaced by an insurable event such as fire, this protection covers your temporary housing costs. For example, if damage to your home forces you to spend a week at a hotel, additional living expenses protection will cover the cost of the room and food, up to a certain amount.

Liability coverage

• Personal liability: This coverage offers safeguards in case of accidental injuries occurring on your property, providing liability protection. You will not be drowning in medical bills if someone else is injured on your property. The insurer will take care of it.
• Voluntary medical payments: Should you inadvertently cause harm to someone or if an individual accidentally injures themselves on your premises, this coverage will cover their medical expenses for a period of up to one year following the incident.
• Voluntary property damage: This coverage pertains to accidental and direct loss or damage that you may inadvertently cause to another person's property. It also extends to accidental loss or damage to the property of someone else who is in your care, provided they are a minor aged 12 years or under.