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Components of home insurance in Alberta
Add-ons to home insurance coverage in Alberta
What an Alberta home insurance policy may not cover
Recent Alberta home insurance quotes
What determines the cost of home insurance in Alberta?
How to get the cheapest home insurance coverage in Alberta, Canada
Home insurance premium trends 2011-2021
Alberta home insurance premium trends
Average home insurance premium in Alberta (by city)
Home insurance coverage is similar in every province in Canada. While homeowners aren’t required by law to have it, most lenders will only mortgage a property that’s insured. The type of coverage you select will have a significant affect on overall policy cost.
To get started, it helps to be aware of the different package types available: basic, broad and comprehensive. They share much in common, though differ in the amount of coverage they provide.
While you’re welcome to opt for any policy type you wish, it’s worthwhile considering the best coverage for perils that are unique to your neighbourhood. In Alberta, that’s likely to mean getting a policy and then adding protections for perils like flooding and forest fire.
You'll start with one of these three policy types:
Comparison shopping is the single most effective way to bring down your insurance costs. We recommend that you get quotes from dozens of providers across the country every time your policy is up for renewal.
Aside from changes to your personal circumstance that may effect how much coverage you need and therefore your rate, there are three main reasons that home insurance premiums tend to increase more often than those for auto insurance.
First, replacement cost. Depending on where you live, replacement costs are not necessarily equal to the actual cash value of your home. There are insurance industry accepted replacement cost calculators that determine how much coverage your home insurance policy makes you eligible for following a claim. The cost of building materials is a factor. When inflation is high and/or materials are expensive, home insurance premiums are likely to be higher as well.
Second, premiums are one of two forms of revenue for providers. The second is investments. In a low interest rate environment, when returns on investments are low, home insurance providers may turn to rate increases to balance costs. They don't need to go through a regulatory process to start charging more. Comparatively, auto insurance premiums require government approval. As a result, home insurance premiums tend to go up before auto insurance premiums.
Finally, insurance providers have been paying out record claims due to increasing incidents of climate change, including historic floods and wildfires in Alberta. In 2016, the wildfire in Fort McMurray was the most costly insured natural disaster in Canadian history, according to the Insurance Bureau of Canada. Insured property damage was $3.58 billion, which was more than double the cost of the 2013 southern Alberta flood, for which $1.7 billion in insurance claims was paid out.
It's helpful to understand how most home insurance policies are structured. There are typically two components: The first includes coverage for property and contents. The second includes legal liability for injury or damage to another person’s property as well as benefits following injury or damage to another person’s property.
Here's a breakdown:
1) Property and building: This coverage protects both the structure(s) on your property, as well as the property itself, from a variety of perils. Protected incidents include fire, theft and water damage, among others. Because some policies may require additional coverage for secondary structures, like a garage or guest house, consult your insurance provider if anything is unclear.
2) Contents and personal property: Contents and personal property coverage protects your possessions, such as furniture, clothing and sports equipment, against theft and vandalism. Some items, like fine art and expensive jewelry, may not be protected under a standard policy. Excluded items can be protected with additional coverage.
3) Additional living expenses: If you’re temporarily displaced by an insurable event, 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.
1) Personal liability: This coverage provides protection against liability in the event someone is accidentally injured on your property.
2) Voluntary medical payments: If you unintentionally injure someone, or someone accidentally injures themselves on your property, this coverage will pay for the medical expenses for up to one year from the date of the accident.
3) Voluntary property damage: This coverage is for unintentional direct loss or damage you cause to someone’s property . It also covers unintentional loss or damage to someone else’s property by a minor (12 years or under) in your care.
In addition to the components of an Alberta home insurance policy, there are add-on coverages you can purchase to further protect your home and contents.
Some you can add to your home insurance policy include:
Be aware of what’s not covered. Some insurance policies have exclusions. For example, your policy might specifically state that the home will not be protected against fire. There are also some perils for which no coverage is available. They’re referred to as ‘uninsured perils.’ If your home is built in an area that’s especially vulnerable to forest fire, no insurance protection may be available.
To keep your insurance costs as low as possible, comparison shopping is the single most effective tactic. However, before you use RATESDOTCA’s free online tool to get multiple quotes for the cheapest home insurance in Alberta, decide what you’d like the policy to include – over and above what’s available in a basic plan.
When determining your home insurance premiums, Alberta insurance providers will look at the following factors:
The structure and size of your house impacts your insurance premium. For example, a house that is semi-detached comes with more liability than a fully detached home because damage may spread to another property.
Alberta is one of the provinces where insurance providers are allowed to use your credit score to determine your rate, though it must be done with your consent. A poor credit score will not negatively impact your insurance premium, but a good or excellent credit score may earn you a discount.
Your replacement cost is calculated by estimating how much it would cost to rebuild your home. Always ensure that you inform your insurance company about any renovations you’ve completed, so the replacement cost of your home can be changed to reflect the additions.
If your residence is exposed to risk factors, such as crime or natural disasters, your insurance premium will increase. For example, homes near airports face the risk of damage from falling debris or heavy vibrations. Similarly, a home near a lake or a river is exposed to the risk of flooding and other types of water damage.
The internal construction of your home, such as the electrical fittings and plumbing, directly affect your home insurance premium, as old installations are more prone to causing issues like fire or water leakage. Old wiring and fuse boxes increase the risk of fire and can also damage your home appliances. Similarly, old lead or clay pipes can burst, causing heavy water damage in your home. Water damage in a home can run you thousands of dollars in repairs. From damaged ceilings to damaged doors, water can really wreak havoc. It is crucial to check how old your electrical fittings and water pipes are. Updating them will allow you to decrease the cost of your insurance premium.
The insurer will check your roof by analyzing its material and age. A standard asphalt roof will show heavy wear and tear within 10-15 years, depending on external conditions. If your roof is old or weak, it may need repairs to prevent water leakage during the wet and cold months. If you have a metal roof, which is proven to be more resilient against wear and tear, your house insurance premium may go down.
The insurer will check how many claims you’ve made in the last 5-10 years. Frequent or failed claims can increase your monthly premium. Always remember to check if a problem can be easily fixed before filing an insurance claim.
Pet owners are exposed to extra liability because visitors who are attacked may file a lawsuit. Additionally, exotic pets like boa constrictors carry a high value, which may further raise your premium.
If you use part of your home for professional reasons, it may affect your home insurance premium. Using your home as a part-time daycare or Airbnb rental, for example, means a greater chance for damage and liability claims.
Having a swimming pool on your property affects your insurance premium because of the replacement cost and the risk of a visitor drowning. Other accessory dwellings, like a tree house or outhouse in your backyard, will similarly increase risk, and in turn, the premiums you pay for a home insurance policy.
When it comes to reducing the cost of home insurance in Alberta, Canada, it’s all about mitigating risk for the provider. Consider some of the following tactics:
| Year | Avg Alberta home insurance premium (CAD) | Year over year changes |
|---|---|---|
| 2021 | $1,779 | 23.83% |
| 2020 | $1,355 | 6.64% |
| 2019 | $1,265 | -1.82% |
| 2018 | $1,288 | 5.9% |
| 2017 | $1,212 | 1.65% |
| 2016 | $1,192 | 16.86% |
| 2015 | $991 | 6.05% |
| 2014 | $931 | 10.85% |
| 2013 | $830 | -1.81% |
| 2012 | $845 | 12.31% |
| 2011 | $741 |
Home insurance rates in Alberta have grown at multiple times the rate of inflation over the past decade, and personal property damage claims have grown 42% nationwide over the same timeline.*
Over the past 10 years, home insurance premiums in Alberta have grown by 140% to reach $1,779 (excluding condo and renters insurance) in 2021. The increase to premiums is directly tied to the growth of the provincial claims rate, which has been augmented by climate change.
As climate change-related natural disasters accelerate in both frequency and cost, Canadian homeowners are increasingly feeling the financial impact in their insurance premiums.
Homeowners can better protect themselves from the effects of climate change by ensuring they are covered for climate-related events. For example, overland flooding insurance has been available in Canada since 2013, and is something every Alberta homeowner should consider - whether or not they live near a body of water.
| City in Alberta | Population in 2021* | Average home insurance premium in 2021** |
|---|---|---|
| Calgary | 1,372,178 | $1,874 |
| Edmonton | 1,057,181 | $1,494 |
| Red Deer | 104,392 | $1,706 |
| Lethbridge | 101,799 | $1,702 |
| Airdrie | 77,027 | $1,737 |
| St.Albert | 69,789 | $1,671 |
| Grand Prairie | 67,627 | $2,086 |
| Medicine Hat | 65,203 | $1,633 |
| Spruce Grove | 39,607 | $1,948 |
| Leduc | 34,560 | $1,613 |
*Source: Province of Alberta
**Data available via RATESDOTCA 2021 Home Insuramap Tool
Residents of smaller cities in Alberta tend to pay higher home insurance premiums than those in larger cities, according to the 2021 findings of the RATESDOTCA Home Insuramap tool.
Though location is one of the key factors that go into determining a home insurance premium, safety and increasing incidents of extreme weather also have a considerable impact.
If you're a homeowner is a smaller city with a high crime rate and less emergency infrastructure available to help manage the impacts of an extreme weather event, you can expect to pay more for coverage.
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Here’s everything you may be wondering about home insurance coverage in Alberta
No home insurance policy is a one-size-fits-all solution. Finding the best home insurance policy for your home in Alberta involves comparing quotes from top provincial insurance providers. On RATESDOTCA, you can instantly compare the best home insurance quotes in Alberta and pick the policy of your choice.
You can save money on Alberta home insurance by comparing quotes from the top home insurance providers in the province. You will also receive a discount if you bundle your home insurance policy with your auto insurance policy. Learn more ways to save money on your home insurance premium.
Home insurance is not mandatory anywhere in Canada, though it’s especially good to have the protection if you live in an area like Alberta that’s vulnerable to wildfire risk. Most home insurance policies include protection against fire, including but not limited to wildfire. We recommend that you clarify what any policy you purchase includes or excludes.
In Alberta, where forest fires are increasingly common, the Insurance Act sets out a two-year deadline for claims to be settled. This means that you should receive compensation from your insurance provider within two years of damage from a covered peril.
While we recommend that homeowners in most parts of Canada add flood protection to their home insurance policy, it’s an especially good idea for homeowners in Alberta where extreme weather is common.
In fact, flood protection is an increasingly wise investment in many parts of Canada, including Alberta where snaps of extreme cold can cause significant thaws and overflowing waterways as well as wreak havoc on water pipes. Most home insurance policies include protection against water damage such as that which might occur if a pipe freezes and bursts, but protection against flood usually must be purchased as additional coverage.
The Insurance Bureau of Canada reflects that severe weather events in Alberta account for a large portion of record high insured damage. For example, in 2020, when insured damage for severe weather events across Canada reached $2.4 billion, three of the six events that contributed to that total were flood-related events in Alberta.
The 2016 wildfire in Fort McMurray, Alta remains the most notable severe weather event, resulting in more than $5.2 billion in total losses.
You may want to switch home insurance providers to take advantage of a lower premium or more extensive coverage. If you switch home insurance providers before your existing policy expires, you may be charged a cancellation fee. If the switch is worth the cancellation fee, changing companies is advisable.
If you are renting out your home, or a part of it, policy add-ons may be required. Or, depending on the renter’s length of stay, you may need a separate policy altogether.
Start by consulting your insurance provider to clearly understand your options. Many home insurance policies, including their liability and contents protection, are void if the policyholder has been absent for an extended period of time – between 30 and 90 days.
If you end up getting short-term rental insurance, you’ll be protected against damage or theft by tenants as well as be eligible for income replacement if your unit becomes uninhabitable due to damage. You can also get coverage for the cost of replacing locks and keys.
*Shoppers in Alberta who obtained a quote on RATESDOTCA from January to December 2021 saved an average amount of $566. The average savings amount represents the difference between the shoppers’ average lowest quoted premium and the average of the second and third lowest quoted premiums generated by RATESDOTCA. Excludes tenant and condo insurance.
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