Compare Canadian Home Insurance Quotes

All about home insurance

In Canada, the law doesn’t require homeowners to have insurance, but many lenders do. So, if you need a mortgage, chances are you’re going to be getting home insurance. The questions then become: what type of coverage and how to get the best rate?

Comparison shopping is the single most effective way to reduce your insurance costs. Since most providers are offering a similar product, it’s worth figuring out which one is offering home insurance at the lowest rate. To save more money in the longer term, we recommend comparing rates every year when your policy is up for renewal. This approach guarantees that you’ll always have the best rate.

One of the reasons that home insurance rates tend to change more often than those for car insurance which are tightly regulated by the government. Insurance providers don’t have many options other than to change premiums because premiums are one of their two revenue streams. When low interest rates result in small returns on investments, their second revenue stream, premiums, goes up. Keep in mind, insurance providers are also paying out record claims – their volume and cost has been increasing year-over-year due to more and more incidents of severe weather worldwide.

The key elements of home insurance coverage

In addition to deciding on a policy type, you can pick and choose what coverage to include, selecting from the key elements described below. While all policy types include varying degrees of property and liability coverage, contents coverage and additional living expenses are negotiable.

• Property coverage: Protects the actual structure of the home from perils such as damage caused by fire and burglary. Coverage is based on the replacement value of your home, not the market value.
  
• Contents coverage: Getting contents insurance protects your personal property when it's at home and when you carry it with you, such as a laptop you bring to-and-from school, a bicycle you ride to work that’s stolen or the camera you bring on vacation, subject to limits.
  
• Additional living expenses: Additional living expenses coverage covers you in the event you are temporarily displaced from your home due to a claim.

Liability coverage

The umbrella term of personal liability coverage can protect you from lawsuits after damage or injury occurs on your property.

• Personal liability: If there is unintentional injury done to someone and/or if you accidentally damage someone else’s property (or if a child under the age of 12 in your care causes damage), you would be protected under your liability coverage.
• Voluntary medical payments: Voluntary medical payments will cover reasonable medical expenses for one year after an accident where you cause unintentional injury to someone, or they are injured on your property accidentally.
• Voluntary property damage: Voluntary property damage will cover if you or someone else in your home (or a child under the age of 12) causes damage to someone else's property by accident.

Optional home insurance coverage & endorsements

Regardless of what policy you get, it will not cover everything. In fact, it may explicitly exclude coverage against certain perils. These are referred to as 'exclusions'.

For wider protection, you must add additional coverage to your policy. These are called 'endorsements' or 'amendments'. They alter the provisions of the insurance contract.

Flood protection

The most important coverage to consider adding to any home insurance policy is flood protection. It’s a peril that affects more and more homeowners in Canada — and it’s rarely included as a peril.

Insurance providers distinguish between several types of flooding. This means that if you want maximum protection against flooding, you’ll need to add two endorsements to your policy. Some insurance providers combine flood-related endorsements into water protection packages.

• Overland water: Overland water coverage protects against damage when water enters the home through the foundation and basement floors or walls. It also covers damage caused by floods from rivers, lakes, or other bodies of water due to heavy rainfall, melting snow and rising rivers.
  
• Sewer back-up: Sewer back-up insurance covers you when a region's main sewer line backs up into your home, sometimes ruining entire basements and posing massive problems to your home and your health. Severe weather has increased the likelihood of this claim, which is why it is recommended more and more often.

Beyond flood protection

You can pick other endorsements to add to the policy. Every region has different risks, so depending on where you live you might consider adding one of these optional coverages:

• Credit and debit card forgery: This insurance helps to offset any financial loss or other losses due to credit or debit forgery.
  
• Cybercrime endorsements: This can protect you from so-called digital risks such as identity theft, data breaches, cyber extortion, home systems attack and computer attack. Find out if cybercrime insurance is right for you, and if interested, talk to your provider to see what is available to you.
  
• Earthquake coverage: This coverage is listed as an exclusion in many policies. By adding this type of coverage, you can protect your home from earthquakes, which have been known to take place in some parts of Ontario, British Columbia and Quebec. Earthquakes can cause considerable damage to homes and contents, so it's a worthwhile type of insurance to consider if you live in an at-risk area.
  
• Freezer food: Food in freezers on your premises is protected if a power outage occurs or your freezer breaks. This insurance would be good if you have multiple freezers with food.
  
• Identity theft and identity fraud: Identity theft occurs when someone steals your identity. Identity fraud occurs when someone uses your identity. Both can take place when your credit card, social insurance number or passport are stolen and thieves use these items to gain access to your bank account. While some banks may reimburse you for lost funds, other costs associated with reclaiming your identity can quickly add up.
  
• Lock replacement: If you’ve experienced a burglary, lock replacement or locksmith coverage will pay for repairing or replacing any damaged locks and/or stolen keys.
  
• Mass evacuation: If you live in an area that’s susceptible to weather emergencies, particularly wildfires, you should consider getting mass evacuation insurance. This type of insurance is used in the case of having to evacuate your home and community. It helps cover extra expenses, such as food and lodging.
  
• Rider: If you have expensive items such as jewelry and engagement/wedding rings, musical instruments and equipment or high-end art, you may want to insure them under a separate policy called a 'rider.’ There are limitations to how much these items are covered under a standard home insurance policy. Learn more about insurance rider policies.
  
• Home-based business. Many of us are working from home these days and need protection in case of equipment damage, business interruption and liability claims. Depending on the size of your business, different options may be available to you. Check out some of our tips on running a home-based business and learn how insurance can help you out. For more information, talk to your insurance provider.

What is not included in a typical home insurance policy?

Even if you have the most coverage money can buy, having opted for every available endorsement, there are some perils against which no policy will protect you. In the insurance world, these are referred to as 'exclusions'.

Common exclusions are:

• Absence from the home: If you leave your home for an extended period and damage occurs, you may not be covered – unless you purchase something called ‘vacant home insurance.’
  
• Damage from renters: Most insurance providers require specific coverage for landlords. A standard home insurance policy is unlikely to protect you if a renter damages the property.
  
• Earthquake: Most policies exclude protection against earthquakes, though you can add coverage in the form of an endorsement.
  
• Existing damage: You’re unlikely to be covered for damage that began before you held the policy.
  
• Flooding: Most policies exclude flood protection, though coverage can be purchased as an endorsement.

There are also some perils for which no coverage is available. They’re referred to as ‘uninsured perils.’ For example, if your home is built on a known flood plain, no insurance protection may be available.

What do these recent home insurance trends mean to Canadians?

Personal property premium rates have increased for Canadians across the board.

From Q4 2021 to Q4 2022 rates rose an average of 6.1%. Much of that increase can be attributed to the financial costs associated with severe weather damage, which reached a peak of $3.4 billion in 2022, according to the Insurance Bureau of Canada.

That severe weather damage continued into 2023, as flooding and a difficult fire season last year added to the list of catastrophic events. This has forced home insurance providers to reconsider their premiums and risks, to recapture costs. 2023 ranks as the fourth worst year for insured losses in Canadian history. As a result, we find that Q4 2023 personal property premium rate increased 6.6% versus the same quarter in 2022 and a 2.4% increase versus Q3 2023.

Now, more than ever, it’s important to consider the benefits of a home insurance policy that can accommodate severe weather events and climate change.

To avoid high premiums, we recommend that Canadians take the important step of comparison shopping for the best home insurance rate. Though there are several other ways to reduce a home insurance rate, comparison shopping is the single most effective tactic.