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Best Homeowner's Insurance Rates in Canada

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Homeowner’s Insurance

Getting homeowner’s insurance is one of the wisest decisions you’ll ever make. It protects not only your home but also your possession against damage.

Although it’s not required by law for homeowners to have home insurance, it’s mandatory sometimes. Most mortgage lenders require homeowner’s insurance as a condition of granting you a loan.

Also, when buying a condo or renting out an apartment, your landlord may require you to have insurance.

Homeowner’s insurance will save you thousands of dollars when an unexpected event happens. And it can offer you the peace of mind to enjoy your investment.

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Important Terms You Should Know

These are some terms related to Homeowner’s insurance you should know:

  • Additional living expenses – the portion of a home insurance policy that pays for expenses incurred when the insured is temporarily displaced from their home. For example, food and accommodation for yourself or your family.
  • Claim – a request made by an insured party, or their beneficiary, to pay benefits provided by an insurance policy.
  • Coverage – The extent of protection provided by an insurance contract.
  • Deductible – The amount of money you will cover when making a claim before your insurer pays. If a kitchen fire causes damages costing $35,000 and your deductible is $5,000, your insurer will pay the remaining $30,000.
  • Endorsement – An addendum to an insurance policy that amends and modifies the policy’s coverage.
  • Liability coverage – a type of insurance that protects an insured party against claims arising from injuries and damage to other people’s property.
  • Perils – the cause of damage or loss, such as an earthquake or a fire.
  • Policy – a written insurance contract between an insurance company and a policyholder that specifies which perils and damages are and aren’t covered.
  • Premium – the cost of insurance protection for a specified risk for a predetermined period.
  • Replacement cost – the cost of replacing property without deducting depreciation.
  • Umbrella policy provides additional protection when the insured’s base liability insurance is depleted.
  • Underwriter An insurance company representative who reviews coverage applications to ensure they are acceptable and reasonably priced.

The Importance of Homeowner’s Insurance

There are several reasons it’s a good idea to invest in Homeowner’s insurance.

  1. No one can predict the future. It’s impossible to know whether a pipe will burst in your house or if someone will steal your possessions. Also, if someone will be injured on your property.
  2. It saves you money. Replacing or repairing your home’s damaged contents can be a significant expense that you, like most of us, may not be able to cover right away. You won’t have to foot the entire bill for any expense if you have insurance.
  3. Peace of mind. You can be confident that your insurer will cover you if something happens to your property or its contents.

Homeowner’s Insurance Policies

There are three main types of home insurance policies:

  • Standard
  • Broad
  • Comprehensive

What distinguishes these policies is what they cover.

The most popular of these amongst Canadians is the comprehensive policy. It provides the most coverage and protection.

Standard Policy

This is the most basic and cheapest type of homeowner’s insurance you can get. Also referred to as a ‘basic’ or ‘named perils’ policy, the standard policy covers the items and contents you specifically mention in the terms.

You can choose specific risks as perils, for example, windstorms or fire. This will protect your home from windstorms or fires. However, if your house floods because a nearby river overflowed, you won’t be covered for damages.

This policy is ideal if you want to save on your insurance premium. And if you can cover the costs of damage or loss yourself.

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Broad Policy

This policy provides named perils coverage on your property’s content and comprehensive coverage for costly items, such as the physical structure of your house.

However, it won’t provide coverage if your property is damaged by a peril you didn’t list on your policy. In this case, your insurer won’t pay for any damage or losses.

With some limitations, you can include any peril from riots and civil commotion to smoke damage.

A broad policy is a perfect middle if a standard policy doesn’t provide enough coverage and a comprehensive policy is too expensive.

Comprehensive Policy

The popular choice amongst homeowner’s, a comprehensive (or all risks) policy provides the full extent of coverage for your property.

It will cover every risk to your home, other structures, and your possessions. Your insurer will cover losses and damages to your property for all perils except those excluded from the policy.

Although it provides more protection than a standard and broad policy, it comes at a slightly higher price. However, the cost is often reasonable for an insurance policy that covers all risks to your property.

Types of Homeowner’s Coverage

Whether you live in a house or a condo or rent, homeowner’s insurance protects your situation.

Coverage includes everything from additional living expenses to personal liability if someone sues you for an injury caused by your property.

Although you can customize a homeowner’s insurance policy, some standard damages and losses your insurer will cover. This includes property damage and liability.

Below are more details about the different types of homeowner’s insurance coverage.

Property Damage Coverage

Protects the insured property’s building, detached structures, and the contents inside your home against damage or loss. The cause of damage can be a fire, hail, or vandalism. However, it’s not limited to these perils.

Depending on your policy, the dwelling building will be covered for all or specific perils. Attached structures, such as a swimming pool or a sun deck, are also covered.

The coverage amount will be the cost of rebuilding and not the property’s market value.

Detached structures, such as a shed or a pool house, are within the scope of protection. The amount of coverage you receive is a percentage of the replacement cost.

Personal Property

Also known as contents insurance, personal property coverage protects your possessions if they’re destroyed in an insured disaster. This includes clothing, furniture, jewelry, and electronics.

There are some exceptions, however, especially for jewelry and artwork. You may need to purchase additional coverage for these.

This protection also applies if your belongings are stolen or damaged while you’re on vacation.

Additional Living Expenses

Suppose you are displaced from your home because of damage or loss caused by a peril. In that case, this coverage will pay for additional living expenses. For instance, what you have to pay for a hotel or food.

The coverage amount is based on a percentage of the replacement cost.

Liability Coverage

This coverage protects you if someone is injured on your property or if you damage someone else’s property.

Your insurer will pay for a lawyer to defend you if someone sues you for injury caused by your insured property. For example, if someone slips and falls on the icy steps leading up to your front door.

The insurance company will also cover the individual’s medical expenses for up to a year following the accident. This is on the condition that they were injured on your property. Or that the injury was unintentional on your part.

Liability coverage protects you and your family when you’re away from your insured property. If you or your child unintentionally damages someone else’s property, your insurer can reimburse the owner for the damage.

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What a Homeowner’s Insurance Policy Covers

A homeowner’s insurance policy isn’t one size fits all. It can contain clauses specific to a property and the policyholder’s possessions.

Liability and property damage coverage are standard inclusions in insurance policies. However, depending on the type of policy you took out, you may be covered for additional damage or loss.

Personalizing Your Insurance Policy

There are specific add-ons you can include in your homeowner’s insurance policy, depending on your level of risk. Although this will increase your policy’s cost, it’ll save you a lot of money in the future.

Some insurance companies include specific add-ons in policies, while others require you to make an additional purchase.

These are the add-ons you can include in your policy.

Identity Theft

When you are a victim of identity theft, someone gains access to your passport or credit card and uses it as if it were their own. This can cause erroneous charges made against your name.

Some banks will reimburse you for the money you lose when someone steals your identity. However, any other additional expenses you have will need to be paid out of pocket. Having a clause for identity theft in your Homeowner’s insurance policy can help you manage the expenses.

Inflation Protection

This feature will increase your coverage automatically to reflect annual increases in homebuilding costs.

Sewer Backup

Protects you for primary sewer backups and overflows into your house.

Extended Replacement Cost

Goes beyond the limit of coverage if building costs increase after a major disaster.

Mass Evacuation

This is similar to additional living expenses. However, in this case, it will cover your expenses if you’re forced to leave your home because of significant risk or danger.

Earthquake, Hail, and Windstorm

Provides coverage if your property is damaged in a natural disaster. It’s imperative if you live in an area prone to earthquakes and high-speed windstorms.

Overland Water

Provides coverage if a river, stream, or other body of water overflows onto your property and causes damage.

Additional Valuables

Protects your belongings, such as artwork and other collectibles that exceed the standard limits of content insurance.

What Isn’t Covered by Homeowner’s Insurance

Although there are several scenarios homeowner’s insurance provides coverage, there are others where your insurer won’t cover you.

If you intentionally damage someone else’s property or harm them, they won’t pay for the liability. In addition, if you are sued for something you did at work.

Also, damage or losses that arise because of moulding and wear and tear caused by a lack of maintenance.

Perhaps you live in an area prone to earthquakes or hurricanes. In that case, your insurance policy may not cover these damages and losses. In this instance, you will need to purchase an add-on.

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Factors That Affect the Insurance Premium

Several factors will determine how much you’ll pay for Homeowner’s insurance.

An insurance provider will do an evaluation to determine your premium. They will look at your property’s condition or age, exterior and interior features, and your claim’s history. They may consider your credit score as well.

These, amongst other details, allow a home insurance broker to accurately assess the likelihood of a homeowner filing a claim. This probability is the insurer’s perceived risk.

Here are some factors that affect the cost of homeowner’s insurance.

Coverage Amount

A significant factor influencing your premium is the amount of coverage you need.

If you go for an ‘all risk’ policy, you’ll have a higher premium than a ‘named perils policy. The same applies if you include add-ons to your policy for valuables or natural disaster protection.

Property Details

An insurer will evaluate the type of property you live in, whether it’s a single-story house or a condo.

They will assess the age and condition of the property.

An older home that hasn’t been maintained, which led to structural damage, is not one an insurer will bet on. These properties are considered higher risk than newer homes for insurers because it’s more likely there will be several claims for damages.

Therefore, your insurance premium may be high if your home is in disrepair.

Location

An insurer will look at where your property is situated.

Your property’s proximity to large bodies of water can impact your premium.

If you own a beach house, you may pay a higher premium than for a house that’s inland. This is because of the higher risk of flooding and natural disasters causing damage to your property.

The crime rate in your neighbourhood is another factor an insurance company considers. They consider the likelihood of vandalism, break-ins, and theft.

If your house or condo is near a fire hydrant, your insurer will consider this a good thing. If there’s a fire, it’ll be handled quickly. This will save you significant damage to your property and your possessions.

Interior and Exterior Building Materials

Houses with knob-and-tube wiring, aluminum wiring, and fuse boxes pose a greater risk. All of these increase the risk of fires and damage to appliances. Circuit breaker panels that don’t function as they can also be a hazard.

Your premium will be higher if any of these construction materials are present in your house.

Another feature that raises alarms for insurers is lead, galvanized steel, or clay pipes. These can easily crack and add toxins to your water supply. They also back up more often, causing problems in your plumbing.

Newer houses have PVC, ABS, or PEX plumbing that doesn’t cause as many problems. Therefore, your home insurance premium will be lower if your house is fitted with plastic or copper piping.

The type of heating in a house is another internal construction feature that influences insurance premiums. Oil-based heating is risky. Therefore, an insurer may charge you more for home insurance.

However, each heating method can be a fire risk, whether in-floor or on a fireplace. The key here is that if it’s more dangerous, you’ll likely be paying more.

The type of roof on the property is also an aspect insurers evaluate. Asphalt shingle roofs wear quickly over time and can cause interior damage in your home if there’s heavy rain or a windstorm.

More durable roofing materials will lower your insurance premium than asphalt shingle.

Renovations

Making improvements to your property can affect your insurance premium positively or negatively.

If you add more possessions to your house or renovate your kitchen to include new appliances, your premiums will increase. This is because you will need more coverage for the additions you made.

However, suppose you replace the wiring in your house or add an alarm system. In that case, it will positively influence your insurance premium by lowering it.

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Your Deductible

The amount you pay for covered damages and losses before your insurer pays a claim is another factor that affects your premium.

A higher deductible than the standard $500 means your premium will be lower. However, you will have to pay more money whenever you make a claim. Therefore, agree to an amount you can afford.

There are several different types of deductibles:

  • Wind and hail deductible: for claims resulting from hail or wind damage
  • Earthquake and hurricane deductible: for claims related to an earthquake or hurricane, but only if you’ve included an add-on for these disasters.
  • Flood deductibles: for claims arising from floods
  • Standard deductible: for claims arising from other types of covered damages and losses

Your property’s location and condition will help you determine which deductibles you need. Also, your financial situation should be a vital consideration.

Claims History

The more claims you make, the more likely you’ll get a higher insurance premium than someone who hasn’t made a claim.

While your insurer is responsible for paying out claims, they also need to make money. If too many claims are made within a certain period, it threatens their solvency.

That’s why it’s crucial to make a claim only when it’s absolutely necessary. For instance, an easily repairable leak doesn’t warrant a claim. However, if a pipe bursts in your home and floods several rooms, then a claim is necessary.

Additional Property Structures

Swimming pools, sheds, and gazebo’s all pose a risk. For instance, a pool can be a drowning hazard. Having all these and other detached private structures insured increases your premium.

However, it’s always a good idea to ensure your Homeowner’s insurance covers them.

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Saving on Homeowner’s Insurance

Homeowner’s insurance doesn’t have to be expensive. There are several ways you can get a good policy that carries a reasonable premium.

While some cost-saving techniques are more specific to your situation than others, there are plenty that can work for every homeowner.

We’ve put together some ways you can save on homeowner’s insurance below.

Shop Around and Compare Insurance Providers

Consider as many as possible before settling for one homeowner’s insurance provider. You may find that one is more suited for your needs than another. Or that an insurer provides a discount that’s not offered by its competitors.

A comparison website like Comparewise can save you the time to investigate different insurers. You can easily compare the offerings of different companies in one place. And save yourself dozens of phone calls and visits to different brokerages.

It’s also best to consider the broker’s reputation. Assess their claim handling practices, the quality and years of service, and their experience.

Bundle Policies

Some insurance companies will give you a discount if you get home and auto insurance from them. If this is an option for you, have both your house and car covered by the same insurer.

Renovate or Make Improvements

Swap out the old electrical wiring in your house, install a monitored alarm system, and replace your house’s plumbing or roofing. Any renovations and improvements you make that reduce the risk for your insurer will work in your favour.

Also, if you add wired smoke and CO2 detectors, fire sprinklers and fire extinguishers, you may get a lower home insurance premium.

Bear in mind that adding more expensive additions to your property will negatively affect lowering your premium.

Increase Your Deductible

If you’re willing to take on a portion of the risk with your insurer, you can get a lower home insurance premium.

While the standard deductible is $500, increasing the amount to what you can afford is a good idea. Your insurance company may decrease your premium in this case.

Ask About Discounts

Although each insurance company has its own specific discounts, some are common. This includes:

  • Age discount
  • New home discount
  • Loyalty discount
  • Corporate discount
  • Claim and mortgage-free discount

You can speak to the insurer before applying to determine the type of discount you might qualify for. It’s also advisable to discuss your specific circumstances in as much detail as possible This way, the insurer might identify conditions that could reduce your premium further.

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April 1, 2022
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FAQs about
Homeowner's Insurance

What is homeowner's insurance?

Homeowner’s insurance is a policy that provides coverage for a home, townhouse, condo, or apartment that you own. Coverage can be customized to include things like theft, fire, flood, earthquakes, and more.

How much does homeowner's insurance cost?

Homeowner’s insurance costs as little as $16/month with our partner, Square One Insurance.

You can also find competitively priced homeowner’s insurance policies on APOLLO Insurance.

Homeowner's insurance
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Gain peace of mind for your home

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