Home Insurance

Imagine moving into your first home, getting everything set up, then losing some or all of your belongings in a fire. Or having walls and floors ruined after a water leak. Or even coming home to find your belongings have been dishevelled, destroyed, or stolen after a burglary. Appropriate home insurance protects you financially from such incidents.

When you buy home insurance, you will pay a premium for a risk policy that an insurer agrees to take responsibility for. By choosing the right insurance policy for your new home, you protect yourself from the financial burden of having to repair/replace your property and the contents in it, should you find yourself in a situation where you need to do so.

Different kinds of home insurance

This varies by insurance provider. The Insurance Bureau of Canada (IBC) lists four different types of home insurance coverage that should be available across the country: comprehensive, basic, broad, and no frills. While IBC has their own explanation of what each of these includes, insurance providers will have their own personalized product names and descriptions. Whoever you choose to buy home insurance from, read the fine print of your policy details to find out what’s covered and what’s not.

Zoo Tip!

When buying a home, keep your home insurance in mind. Homes in areas that experience severe storms and/or are in remote areas that are not well protected may also be subject to higher rates.

If you’re looking at a home in a high-crime neighbourhood, adding a security system, deadbolts, or other precautionary measures can reduce your premiums. Finally, any home that has a history of expensive claims will be considered a higher risk, making it subject to potentially higher rates.

It’s also important to note that having a poor credit score can hurt your insurance premium rates.

How insurance premiums are calculated

Much like how a home inspector examines the physical conditions of your home and/or property, a home insurance provider will give you a quote based on an assessment of your home, calculating the probabilities and risk factors for an incident to take place. As the risks go up, and any associated cost of repairs with it, your premiums will rise.

The list of things home insurance providers look at includes:

  • Construction of home—brick vs. cement vs. wood
  • Location
  • Distance to closest fire hydrant
  • Value of home and belongings
  • Any special uses—home office, rental unit, etc.
  • Type of electricity
  • Type of pipes
  • Source of heating
  • Any extras that could affect your premiums—age of roof, home security system, pool, etc.

Where to purchase home insurance

You can purchase home insurance in-person, online, and over the phone, through any licensed insurance broker, agent, or company in your province. If you have trouble finding someone you trust, ask for recommendations from family and friends.

Whoever you work with should take the time to explain your policy options and premium rates, so don’t be hesitant to read the fine print and ask as many questions as you want.

Remember that you have the right to shop around for the best rate. That said, be honest with your insurance provider. Saving money on your premium by lying will cost you, should you ever need to make a claim.

Cancelling home insurance

If you’re in a situation where you would like to cancel your current home insurance policy, either because you’ve found a better offer elsewhere or because you no longer require coverage on this home, you should give as much notice as possible and provide a written letter requesting your cancellation.

If you’ve prepaid your premium for the year, you may be entitled to a refund. As with any policy you purchase, it’s important to read the fine print of any policy or agreement before signing anything.