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Home insurance in Alberta
 

Home insurance is not mandatory in Alberta. However, few banks or lenders will offer you with a mortgage if you cannot prove that your house is protected by an up-to-date home insurance policy.

Besides being required to procure and maintain a mortgage, home insurance is important because your home is most likely the most valuable asset you have. By insuring your home, you gain coverage against risks like water damage, theft and personal liability. If you choose to forego home insurance, you will be solely responsible for the cost of damages, personal displacement and liability claims, which can easily exceed hundreds of thousands of dollars.

So even if you’ve paid off your mortgage and aren’t required to insure your home, why take the risk?

In Alberta, frequent floods and wildfires cause extensive damage to properties every year. One of the highest insured property losses recorded in Canada was $5 billion in 2016, with $3.7 billion of that total being the result of the Fort McMurray wildfires. These wildfires resulted in 60,000 property insurance claims. This tragic event illustrates why having home insurance in Alberta is so important for all homeowners.

(Source: Insurance Bureau Canada)

Types of home insurance in Alberta
 

Here are the standard components of home insurance policies in Alberta.

Property coverages
 

1) Property: Property coverage protects your home from perils, such as floods and fires. The cost of coverage is primarily based on the replacement value of your home, not the market value. Though the exterior of your property is usually included as part of this coverage – e.g. fences, driveways, etc. - detached structures built on your property may require additional coverage. Ask your insurer for more information.

2) Contents and personal property: Contents and personal property coverage protects the personal belongings inside your home, such as your bicycle, laptop, appliances and furniture. Provide your insurance company with a list of your valuable belongings at the outset of your policy.

3) Additional living expenses: Additional living expenses cover housing costs if you and your family are temporarily displaced because of a property insurance claim. For example, if you need to stay at a hotel while your home is repaired, you won’t have to pay out of pocket.

Liability coverages
 

1) Personal liability: Most home insurance policies in Alberta, whether basic, broad or comprehensive, offer personal liability protection. Personal liability coverage provides protection in the event someone is injured on your property and files a lawsuit against you.

2) Voluntary medical payments: If someone is injured on your property and needs medical attention, such as a doctor’s visit or surgery, your insurer will pay the covered amount for up to one year from the date of the accident.

3) Voluntary property damage: This covers damages that you or your family unintentionally cause to someone else’s property.

Add-ons to home insurance coverage in Alberta

These are additional home insurance coverage options you can add to your policy, depending on the risks facing your house:

1) Overland water : This covers property damage from overflowing water stemming from rivers, streams, lakes and thawing snow. Please note that not all insurers may offer this add-on.

2) Sewer backup: This protects you when a main sewer backs up and damages your home. You can limit risk by installing a backflow preventer in your home. If your house is located at the bottom of a hill, it is highly recommended to have a backflow preventer installed.

3) Earthquake: Earthquake damage is not always covered by a standard policy. You can add it as an additional coverage option if your area is vulnerable to earthquakes.

4) Mass evacuation: This is an important add-on for Alberta residents. It covers mass evacuation when disasters, such as wildfires or floods, strike. This coverage will pay for some of the expenses you incur, like hotel stays and food, when you are temporarily displaced from your home due to a city evacuation.

5) Identity theft: This covers losses incurred by identity theft that may not be covered by your bank, such as the cost of replacing passports and other important documents. Your bank will only help you recover the lost funds incurred due to credit/debit and bank fraud.

6) Lock replacement: This covers the cost of replacing your house locks when they are damaged or stolen. Remember to report the damages to authorities and notify your insurer.

**Home insurance prices are based on RATESDOTCA home insuramap data for policy transfers from 2011 through early 2021. Personal property damage claims growth rate is based on Insurance Bureau of Canada (IBC) data from 2009 through 2019, the most recent ten-year period available.