What are Canada's best homeowners insurance companies?
A home is the most valuable asset of most families in Canada. The average home is now an astronomical $716,828, according to the Canadian Real Estate Association. And prices continue to rise.
After investing that much, where would you and your family go if a fire, flood, or natural disaster left you without your house?
Homeowners insurance offers you peace of mind that your most valuable asset is protected.
This guide explains how homeowners insurance works in Canada. Learn what is covered, why you should consider purchasing it and who offers the best homeowners insurance plans.
What is homeowners insurance?
Homeowners insurance in its simplest form protects your home and your possessions against damage and theft. It is a necessity that protects your investment and your valued possessions.
Homeowner’s insurance works by having elements that the insurer will cover the cost of in the event of a covered loss. Standard losses are damage to the interior and exterior of your house. For example, if there is damage to your home due to fire, hurricanes, lightning, vandalism, or other covered disasters, the insurer will compensate you so your house can be repaired. If your house is a complete loss, your policy will pay for things such as accommodation and a food allowance while your home is being rebuilt. Clothing, furniture, appliances, and many other contents of your home would be covered if they were destroyed due to a covered loss.
When a homeowners insurance policy is taken out, the insurer will base the premium on several factors including your credit score, the condition of the house, and its location.
Homeowners insurance is a powerful tool. It protects your investment and your most-valued possessions.
What does homeowners insurance cover?
It is very important to understand exactly what your homeowners insurance policy covers. We recommend reading the fine print to avoid any bad surprises in the event you need to file a claim. While every homeowner’s insurance policy is different, there are some coverages common to almost all insurance policies.
Homeowners insurance typically covers a broad range of possible damages. It should protect:
- the physical home
Basic policies protect from:
- natural disasters
- flooding (from your plumbing)
Flooding caused by an interior problem, like a water leak due to a leaking pipe or an overflowing toilet, is generally covered by homeowners insurance. If the causes of flooding are natural such as rising rivers and flash floods or human causes like burst dams and sewer backups, they are not generally covered in basic policies.
Worried about flooding? Ask your insurance company about adding coverage to your policy, or buying separate flood insurance.
Personal property, things like clothing, furniture, appliances, is typically accounted for in your policy as well. The specific protection for it is sometimes known as contents insurance. However, coverage may be limited on certain types of high-value items, such as jewelry, artwork, and antiques and collectables. Additional coverage is often purchased specifically for such assets. When policy shopping, we recommended asking your agent whether you will need to get additional coverage for expensive possessions like fine china or a diamond ring.
Is homeowners insurance mandatory in Canada?
The short answer is no. Homeowners are not required to purchase homeowners insurance by Canada’s federal or provincial governments.
If you are trying to purchase a home with a mortgage, homeowners’ insurance is often required by the mortgage lender. It protects their investment, and yours. Your application may be denied if homeowners insurance is not purchased.
How much homeowners insurance do I need?
You recognize that you need some form of a homeowners insurance policy to protect your investment and the contents of your home, but navigating what policy is best for you can be a whole different ball game. There are three main forms of policies available: basic, broad, and comprehensive.
Here is what each policy covers and how they differ:
|Level of Insurance||Named risks to home||Most risks to home||Most risks to possessions|
Basic homeowners insurance
A basic policy, sometimes referred to as a standard or a named perils policy, only covers the risks to your home and contents that are explicitly named in your policy.
For example, say your basic policy names fire. This means you are covered for the risk of fire damage. However, the policy does not name flooding, sewer backup, or earthquake which means you are not covered for these risks.
Broad homeowners insurance
A broad policy provides a level of coverage in between comprehensive and basic policies.
For the physical structure of the house itself, a broad policy covers all risks except for any risks named in your policy as exclusions. This is similar to comprehensive policies.
For your possessions (contents), a broad policy only covers all named risks (perils). This is similar to a basic policy.
Comprehensive homeowners insurance
A comprehensive policy provides the most coverage. It covers all risks to your home and contents, except for any risks named in your policy as exclusions.
Imagine that your comprehensive policy names flooding, sewer backup and earthquake as exclusions. This means you do not have coverage for those named risks. However, your home and contents are covered for all other risks that are not named, such as fire.
Options are usually available if you are concerned about flooding, sewer backup, earthquakes or other specific exclusions where you live.
How do I get homeowners insurance?
Shopping for the best policy and price can seem daunting. However, the best way to compare home insurance quotes online is to use a quote comparison tool.
Get a look at various insurers and shop plans anonymously in one place all at once with our tool.
Shop for the best homeowners insurance!
Compare rates now.
You can also use an insurance broker or agency to help navigate the process. But you can also get various home insurance quotes online.
How much does homeowners insurance cost?
In 2019 the average homeowners insurance policy in Canada cost $1,200.
Numerous factors influence the cost of homeowners insurance. Use our free and anonymous comparison tool to find the best rate for you.
Some of the biggest factors the insurer will take into consideration in determining your premium will be province/location and neighbourhood. If you live in an area with a high crime rate, that will increase your premium because you may be at a greater risk of theft. Similar considerations are electrical wiring, the type of plumbing, the age of your home and completed renovations.
Do you have a wood-burning stove? That would also be factored into the cost of your premium.
Some other factors that would impact insurance rates, but not as significant as those previously listed, are whether your house is made out of wood or concrete, the distance from water sources such as sprinklers, any additional endorsements that you need (like for jewelry, for example), and size of insurance deductibles.
Save money. Having a security system installed can help lower your premiums.
How long does it take to get homeowners insurance?
You can typically get a homeowners insurance quote in just a few minutes.
When you decide to move forward, you may be able to get a homeowners insurance policy in a few hours depending on the type of property you are insuring. However, it could take longer if an underwriter has additional questions related to location, structure or verifying contents.
Does where you live affect your insurance premiums?
As mentioned before, many factors affect your homeowners insurance premium, a major one being location. According to the JD Power & Associates 2019 Canada Home Insurance Study, nationwide, the median homeowners’ insurance premium during the past year was $1,200. On a regional basis, policyholders in the Atlantic provinces and Ontario paid the highest for coverage ($1,260), followed by British Columbia and Alberta ($1,248) and Quebec ($984) regions. Where you live will play a part in how much you will pay in premiums.
Cost of insurance premiums by province
What is the best homeowners insurance?
Which homeowners insurance provider and policy is best for you depends on where you live and your risk tolerance.
Popular homeowners insurance providers include:
- Allstate homeowners insurance
- Aviva homeowners insurance
- BCAA homeowners insurance
- Belairdirect homeowners insurance
- CAA homeowners insurance
- Certas homeowners insurance (a subsidiary of Desjardins)
- CIBC homeowners insurance
- Co-operators homeowners insurance
- Costco homeowners insurance
- Cumis homeowners insurance
- Desjardins homeowners insurance
- Intact homeowners insurance
- Manulife homeowners insurance
- RBC homeowners insurance
- Scotialife homeowners insurance
- TD homeowners insurance
- The Personalhomeowners insurance
- Wawanesa homeowners insurance
Get homeowners insurance rates quickly and anonymously with our comparison tool.
Shop for the best homeowners insurance!
Compare rates now.
Is homeowners insurance recommended while renovating?
Yes, you will want to contact your insurance company before you upgrade to your dream kitchen.
Homeowners insurance is recommended while renovating because renovations bring with them increased risk. Imagine that a worker or a neighbour gets injured as a result of the work.
Your insurer can also clarify whether you require additional coverage for a specific renovation project. For example, adding a pool or fireplace will likely increase monthly costs. If you file a claim during a renovation but have failed to notify your insurer of the work, it may be declined.
If the renovations increase your property’s value, you could be left underinsured. Speak with your insurer before renovating.
How do I file a homeowners insurance claim?
If you need to make a claim, call your insurance provider as soon as possible. They will walk you through their steps. Be prepared to speak with them. Make a complete and detailed list of what is damaged or stolen.
Here are the typical steps for filing a homeowners insurance claim:
- First, report the incident to the police and obtain a police report (if applicable, such as for vandalism or theft. This would not be necessary for a leaky roof)
- Call your insurance representative.
- Provide a complete and detailed list of what is damaged or stolen.
- A claims adjuster will then contact you to investigate what happened, request documentation, and help you with follow-up steps.
- Fill out a proof of loss form listing damages or losses and estimated values.
- Depending on your coverage and the nature of your claim, your items may be repaired, replaced, or reimbursed.
It can be helpful to have photos and receipts on hand when you contact your insurer to file a claim.
How much does homeowners insurance go up after a claim?
The amount your premium increases after a claim depends on the nature of the claim and your claims history. This is because insurers see policyholders who file a claim as more likely to file additional claims in the future.
On the contrary, rates may also change depending on the number of claims that come from your surrounding region. Large-scale weather events and other regional issues often result in increases.
A minor claim should not impact your premium.
How do I cancel homeowners insurance?
While cancelling your insurance policy is generally not recommended, there might be situations where it makes sense for you to cancel your home insurance. If you are planning to cancel when your policy expires, you should notify the insurer or your insurance agent when you receive your renewal notice.
Your insurance provider will ask for a written copy of your intent to cancel your home insurance. A written letter, signed and dated will usually suffice but check with your agent or the insurer to be sure.
If you are cancelling your policy before the term is up, be prepared to pay penalties.
How can I save on my homeowners insurance?
Everyone wants to be able to save money when they can, especially on big purchases such as a homeowners insurance policy.
Here are some tips for saving on your policy:
- Bundle home and auto insurance
- Increase your deductible
- Bring plumbing and electrical systems up to code
- Install a security system
- Install smart water shut-off valves
- Ask if you qualify for any group or corporate discounts
- Increase your deductible
The quickest way would be to bundle your home and auto insurance. Other ways include ensuring electrical wires and plumbing are up-to-date and installing a security system, smoke alarms, leak detectors, and smart water shut-offs.
The deductible is the amount you must pay when making a claim. A standard homeowners insurance deductible is $500. Taking a higher deductible can decrease your monthly premium.
What is the difference between homeowners insurance and mortgage insurance?
Mortgage insurance protects most families’ most valuable asset, their home, but in a different way than homeowner’s insurance. It protects a family’s ability to pay their mortgage. If illness, injury or death were to prevent you from working, your mortgage insurance would pay off your mortgage. This helps you or your family to keep the home. Any payout goes directly to the existing mortgage balance. Once you pay off your mortgage, the policy expires. This protects the payments towards the house, whereas, homeowner insurance protects damage to the home itself.