Finding the Right Home Insurance in Canada
When you consider how important your home is to you, the value of a complete homeowner’s insurance plan should come as no surprise. As naturally risk averse individuals, we want to live life while protecting our greatest assets – and there are very few assets more prized than the roof over our head. Property, in general, is one of the largest investments that an average person pays for over a lifetime, so it is never a bad idea to have it insured against unfortunate events. If you own a home or are planning to in the future, you should make finding the right homeowner’s insurance a top priority.
THE BEST CANADIAN HOME INSURANCE COMPANIES
Initially formed in the year 1945 by Saskatchewan farmers, the company is now owned by CEO Rob Wesseling and has developed a very positive reputation in Canada. The company offers homeowner’s insurance quotes both in office and through online portals and prides themselves on great customer service. In terms of policies, they provide both comprehensive and optional-type packages. Any claims made by the policyholder can even be executed through their mobile application. The co-operators are known for a very high degree of coverage throughout their insurance plans, and you have the option of adding: fraudulent credit protection, identity protection, and belongings protection for when you’re moving homes to your plan.
Customer Satisfaction Rating in Ontario & Eastern Canada: 791/1000
What we like about "The Co-operators"
- Tier-based coverage policies (Classic / Prestige / Prestige Plus)
- Property insurance types: Home, Tenant, Mobile home, Condominium, Seasonal property, Cottage
- Competitive rates in Ontario
- Solid company-wide accountability (as a customer you have a high degree of agency to influence decisions)
- Supportive of local communities
Although first established in the United States, Allstate has set firm roots in Canada as a reputable insurance provider. If customizable insurance plans are what you look for, then Allstate should be one of your top considerations. Personalized to your exact insurable needs, Allstate gives policyholders the advantage of flexibility with a variety of different policy types offered ranging from a “standard” plan to a VIP plan. Their standout feature is called myLocker and it allows you sort your property’s belongings much easier.
Insurance Customer Satisfaction Rating in Ontario & Eastern Canada: 764/1000
What we like about "Allstate Home Insurance"
- Highly flexible insurance policies
- Property insurance types: Home, Tenant, Rental unit, Condominium, Seasonal property
- Great customer service (easy to access information and reach company representatives)
- Discount program: new home discount, zero mortgage balance discount, favourable claims history discount, security system installation discount, retirement discount
As an insurance-specialized branch of the long running and positively reviewed Toronto Dominion bank, you can trust TD home insurance to have your back. With so much experience in the insurance industry, TD Home Insurance is where you should go if you have very niche requirements from your home insurance plan, since they have a very diverse selection of add-on insurance coverage options. Some of these niche insurance needs can include parental retirement home coverage, eco-friendly maintenance and repair coverage, specific valuable possession coverage (wines, jewellery, etc) and many others. Of course, much like many other major insurance providers, if you choose to bundle TD home insurance with other sectors (such as automobile insurance) you’ll receive a ton of complimentary benefits.
Insurance Customer Satisfaction Rating in Ontario & Eastern Canada: 749/1000
What we like about "TD Home Insurance"
- Toronto Dominion bank has tons of experience helping Canadians in the financial services sector
- Property insurance types: Home, Rental unit, Condominium
- Industry expert in personal insurance (non-commercial) coverage
- Excellent customer service and response time
- User-friendly interface (easy to use insurance tools on their website along with a clean mobile application)
- Discount program: home and auto bundle discount, home security installation discount, favourable claims history discount, fire detection system discount, zero mortgage balance discount
Desjardins Group is one of Canada’s largest credit unions and has been around for decades. As a principal insurance branch, Desjardins Home Insurance is well known for its success in the industry. The company provides what they call all-risk insurance that is their version of a comprehensive insurance policy. Similar to other insurance companies, Desjardins also offers incentives to bundle their insurance packages. If you choose Desjardins auto insurance as well, and you have a favourable claims history, you could stand to save up to 20% on your premiums. But that’s not all – Desjardins offers multiple eligibility discounts, such as having home security or water protection systems installed (see their website for a full list). You can also access the company’s services from a mobile application, where you may manage your policy account and make a claim whenever you’d like.
Insurance Customer Satisfaction Rating in Ontario & Eastern Canada: 748/1000
What we like about "Desjardins Home Insurance"
- Subsidiary of a largely successful credit union
- One of the largest insurance agencies in Canada
- Property insurance types: Home, Rental unit, Condominium, Seasonal property
- Home and auto insurance specialization
- Easily stackable consumer discounts (Desjardins has ways you can save money around every corner)
- Discount program: multi-insurance bundle discount, favourable claims history discount, various alarm installations discount
WHAT YOU NEED TO KNOW ABOUT HOMEOWNERS INSURANCE IN CANADA
What is Homeowner’s Insurance?
A home/property insurance plan is a financially protective service that helps pay for any unforeseen expenses that can occur on your home. It is a critical tool that promotes your overall financial health by ensuring the home’s value. Typical home/property insurance coverage includes damage protection against fires, natural disasters, burglaries, and personal injury liability. Given the total value of a property’s equity, and the related scope of damage potential, costs covered by homeowner’s insurance are typically very large in size – making it difficult for the average person to pay for them out of pocket. If anything, this point alone should make the idea of buying the right homeowner’s insurance plan more attractive.
What Does a Home Insurance Policy Actually Do?
The number one purpose of this financial service is to financially shield you from disaster. While many disastrous events are considered statistically unlikely to occur, on the odd chance that they do happen the costs can be substantial. Events that cause irreparable total destruction (an uncontrolled house fire) are still a very real possibility, and if you don’t take insurance as a precaution you’re left with zero. The main features of a homeowner’s insurance plan include paying for: interior and exterior damages, theft, and accidental liability (someone either injures themselves or their belongings on your property). In regards to accidental liability, imagine someone takes a fall on your icy driveway during the winter and makes a claim that holds you accountable, or your kitchen fire manages to spread over to your neighbour’s garage; you likely will not be able to afford these fees yourself. A secondary purpose of a complete home insurance policy would be coverage for unforeseen living expenses, which are generally temporary and occur only if you’re unable to reside under your property’s roof for a short time span. Living in a hotel while your primary residence is being sprayed by pest control is an example of an unforeseen living expense.
How Are Home Insurance Premiums Calculated?
Speaking plainly, a home insurance premium is the cost you pay out of pocket for the insurance’s guaranteed risk protection, regardless of whether you ever end up making a claim. Make sure to keep up with your insurance premiums otherwise your policy may be invalidated. When you’re first setting up the insurance plan with your insurer, the company will consider a few universal criteria to determine how much premium you owe based on your needs:
- What kind of property you are looking to insure (traditional family house, apartment style, condo, townhouse, rental unit, etc.)
- Details about the residence (construction materials, property size, age, surrounding area)
- Replacement cost and total property value plus insured possessions
- Geographic distance between the property and a fire station or fire hydrant
- Crime history in the location and neighbouring area
- Your personal history with making insurance claims (tendency to fall back on insurance)
- The policy type that you’re deciding on
- The size of the deductible you’re willing to pay in the event of an insurance claim (the amount of an expense you pay out of pocket before your insurance company settles the remaining cost balance – usually the higher the deductible is the better the service)
Why Do You Need Home Insurance?
The reasoning behind purchasing homeowner’s insurance can be either internal or external, depending on your attitude towards the plan. Either way, homeowner’s insurance can satisfy both factors when you opt for the right amount of coverage.
INTERNAL reasoning to purchase home insurance stems from your own decision to achieve peace of mind. For a relatively minor cost (when comparing the insurance premium to your home equity), you’re able to relax knowing that the value of your home and all of its possessions is backed by policies that can guarantee hundreds of thousands (even millions) of dollars in total coverage. Speaking simply, since the costs of major property damage and liability to others is so high; having homeowners’ insurance effectively prevents you from going bankrupt because of one unforeseeable event.
EXTERNAL reasoning involves scenarios where you’re under obligations to buy a home insurance plan. Since the majority of individuals cannot purchase a property with their own funds, they need to contact a financial institution for a mortgage loan. Essentially, the financial institution pays the lump sum amount out to the property seller as a long term investment with interest-accumulating repayments placed under the borrower’s responsibility. But what happens if the home gets destroyed in a natural disaster? The financial institution’s invested asset is now worthless, and the borrower will more than likely default on the mortgage payments. As a result, it’s in a financial institution’s best interest to find proof of homeowners insurance before they hand out mortgages. This way, even if the property burns down to the ground (literally and financially) the insurance policy will still be able to recover the value of the underlying asset, which the financial institution can then be repaid with. Mortgage lenders will typically approach you with a “standard mortgage clause” that includes the need for home insurance so they can stand to be reimbursed at all times, before you can even receive the loan.
What Do Home Insurance Policies Cover?
The word “coverage” refers to the total amount of funding your insurer will provide in the event of an insurance claim. You should note that different types of claims will result in varying settlement sizes and validation requirements. Personal property claims are what people most commonly associate home insurance with. This form of coverage deals with reimbursing losses from either the property, belongings on the property, or the cars parked on the property. In order to determine how much you’ll need to receive from a personal property claim, you should make an exhaustive list with this information: the replacement cost of your belongings, their product specifications (model number, serial number etc), along with pictures and receipts of anything valuable. Liability claims make up the other half of conventional home insurance. Liability coverage focuses on dealing with damage-reimbursement inflicted on others, such as personal injury to visitors and destruction of neighbouring property.
What Are The Types of Home Insurance Policies?
Home insurers will generally offer a variety of different policies with varying degrees of coverage, which are dependent on the amount of risk you’re willing to pay for. While there are a few standard policy types that you can find from basically any reputable insurer, it’s never a bad idea to look around for a specific one that best suits your needs.
COMPREHENSIVE POLICY – Also known as the “all-perils” homeowner’s insurance package, a comprehensive homeowner’s insurance policy will provide you with more total coverage than any other single policy. With this policy you could make a claim on virtually any risk to your property and belongings (as long as there are no risks excluded in your policy by the insurance company – make sure you’re aware of these before signing).
STANDARD POLICY – Also known as a basic policy, this type of policy offers fewer coverage benefits when compared to a comprehensive plan. While a comprehensive policy is essentially a “risk bundle” package deal with the vast majority of claims covered, a standard policy is more customizable. At its core, it works to protect you from any risks that you decide to include at the time of signing; and only those declared risks. This means that if you purchase a standard policy that covers damage from flooding and fire, but an earthquake happens destroy your home instead, you won’t be able to make a claim.
BROAD POLICY – Falling a little short of a comprehensive package in terms of total coverage, a broad-form policy is basically just the reverse of a standard policy. While a standard policy asks you to include the risks that you want covered, a broad policy asks you to exclude risks you don’t want to pay for. A broad policy will cover the risk of all risks except what you declare as exclusion, so ultimately it will be cheaper than a comprehensive plan – the trade-off being that you surrender the advantage of having complete worry-free coverage.
NO FRILLS POLICY – This form of homeowner’s insurance is barebones and provides only the most basic levels of coverage. Usually this product is offered to homeowners that still want to get their property insured but can’t afford a more effective policy, or it is offered for homes that do not pass all the regular insurance requirements. If you’re willing to pay for home insurance, in most cases it’s better to go the extra mile and side with one of the policies listed above.
OUR THOUGHTS ON HOME INSURANCE IN CANADA
Even though homeowner’s insurance is not a legal requirement, the benefits are hard to ignore. If you’ve managed to secure a home without a conventional mortgage and still don’t have home insurance it is time to reconsider! Your property is most likely the greatest source of equity you own – wouldn’t you want it to be sheltered from unpredictable circumstance? Even if you never end up making a claim, the total peace of mind that stems from complete asset protection is surely worth the insurance payments. We hope that by listing our favourite insurance companies we’ve made the search for the perfect policy a simple one.
Homeowner Insurance Frequently Asked Questions (FAQ)
Is property insurance mandatory in Canada?
Unlike automobile insurance, home insurance is not viewed as a legal necessity by the government – in other words it is not mandatory. However, this doesn’t mean you should completely avoid home insurance altogether just to save a few hundred dollars in coverage fees. On the other hand, mortgage lenders will more often than not state that having home insurance is a requirement, in which case you can consider it a mandatory expense to receive the loan.
What types of events get covered by home insurance policies?
As a rule of thumb, most home insurance plans will cover the more common unexpected events (also referred to as perils) that come from fire, rain/storm beatings, and theft. If you want to be insured for events that are less statistically likely to happen, such as earthquakes in an area that isn’t earthquake-prone, you’ll probably need to request it as an add-on protection. In terms of what your home insurance policy will not cover, most of your claims for “predictable” events will be denied, especially if they relate to general home maintenance. These events usually come from inaction on behalf of the policyholder, such as having an interior pipe freeze in cold weather while the property owner isn’t there to physically run the pipes and prevent it.
What are my settlement options?
Since any insurance claims you make will be thoroughly reviewed by your insurer, most of the time they will choose how the settlement works. Generally, there’s two ways that an insurance company will handle your claim. The first method, Actual Cash Value, provides you with funds equal to the market cost of your belongings less any value depreciation. Insurance companies all use different measures to calculate depreciation on an asset, but essentially it relates to the overall deterioration in quality of your possessions. For example, a used and beat-up smartphone won’t sell for as much as a brand new model of the same smartphone; therefore its price has depreciated. The second method insurers consider is replacement value, which is where you’ll receive the full cost to replace a loss. In other words, if you owned a 3-year old insured laptop that was destroyed in an earthquake, your insurance company will pay for a similar laptop.
What is condominium insurance?
Condo insurance slightly differs from regular homeowner’s insurance because it also financially protects your condominium storage locker in addition to the standard interior/exterior damage coverage. While you are responsible for your own individual unit, condominium companies generally have a “master” insurance plan for the building’s structure (everything from the exterior walls to common areas). Condominium coverage includes: damages to your unit, theft of personal possessions, liability damage to other units caused by your unit, and added living expenses.
What is tenant insurance?
In the case where you do not own your home, and instead you choose to rent a room or an apartment from a landlord, you might wish to register for tenant insurance (sometimes referred to as renter insurance). Ideally, you want to purchase enough coverage to pay for your personal possessions in case any unfortunate event happens to the unit (your belongings are stolen or destroyed). This type of property insurance can also cover liabilities such as visitor injury, and damages to other units under the same roof.
What is home-based business insurance?
This form of insurance is applicable to small businesses that operate from within their business owner’s property. This is separate from general homeowners insurance because of the introduced risks associated from operating a business inside a property – you would need to disclose this to your insurer to avoid any policy cancelations. Usually home-based business is used to cover the replacement cost of business tools (machinery, heavy tools, computers, etc) and to pay for any damages caused through their usage.