Home ownership allows your family to create its own space in the world. For many, this is the most valuable asset that they own. Canadian home insurance allows you to protect against the most common perils, risks, accidents, crimes or dangers.
We will discuss what homeowners insurance covers and what it does not cover. We will discuss how to compare the coverage offered by different companies. Learn how you can compare the best house insurance rates in BC. You can sleep better at night after you find the best home insurance in Canada with the help of this Mega Guide.
Canada Home Insurance Mega Guide
Your family home is a nest of peace and tranquility where you can eat, rest and share memorable moments with your loved ones. Unfortunately, the world is not a perfect place without risk. There are many dangers that can strike without warning.
You can’t really predict when a storm will damage your house. The burglars are not going to tell you when they will arrive. That is why you have house insurance available.
Insurance actuaries have looked at volumes of statistical information on how often accidents, crimes, and natural disasters take place. Insurance firms have individuals pay a premium into a group pool from which payouts are made when losses are suffered by any of them. The goal is to spread out risk amongst Canadians. This prevents one calamity from causing the financial ruin of a homeowner.
Generally, the insurance industry will use the term “Basic” or “Standard” coverage for the minimum protections. Some advise you to simply take the “Comprehensive” or “All Perils” policy. Most of these insurance policies will cover personal property, liability, and loss of use.
Which homeowners insurance policy is the best for you? Your family activities, personal belongings, and home fixtures will determine what type of insurance policy is best for you. The best house insurance rates in BC will include protection for what you value most.
Who Regulates Canadian Insurance Companies?
The Office of the Superintendent of Financial Institutions (OSFI) is responsible for issuing the federal licenses for Canadian insurance companies. But, some insurance companies are not federal and those with British Columbia provincial licenses are regulated by the Financial Institutions Commission of British Columbia (FICBC). The Insurance Council of British Columbia (ICBC) administers insurance broker licenses under the Financial Institutions Act.
The Financial Services Commission of Ontario (FSCO) licenses and regulates insurance companies who operate within the province of Ontario. Each province is likely to have its own rules with regard to the insurance industry.
You might see the terms, Replacement Cost or Actual Cash Value (Fair Market Value) written in your homeowners insurance policy.
What do these insurance terms mean? Replacement Cost means the amount to replace the damaged item today; the Actual Cash Value refers to what the item is actually worth today.
So, basically the Actual Cash Value = Replacement Cost – Depreciation.
If you want the insurance company to replace the entire item, then Replacement Cost is better. If you have Actual Cash Value written in your insurance policy, it should be cheaper.
How To Get The Best Deal in Home Insurance?
What sets the best home insurance companies above the competition? You might wonder how to compare various home insurance quotes with one another.
The best home insurance rates will optimize coverage for the items that you own. You want the highest possible amounts paid for perils that you are most likely to face.
If you have a lot of trees, then you want the insurance company to reimburse you for landscaping damage.
How much do homeowners in each province pay for their property insurance? The home insurance Ontario average cost might be different than the home insurance British Columbia average cost (in fact, the more populated cities might also vary greatly).
Of course, the location has a large impact on cost, but RateHub had calculated that home insurance Ontario average cost for 2015 could be divided by income bracket:
- Under $300,000 is about $702 per year
- $300,000 to $699,999 is about $924 per year
- $700,000 to $1,499,999 is $1,404
Besides location, other factors impacting your homeowner’s insurance rates include electrical wiring, piping, plumbing, house age and type of heating, according to RateHub.
Other items that might impact your insurance cost less dramatically are the distance from water sources, installed alarm monitoring and availability of a garden.
Places Where You Can Purchase Home Insurance Policies
The Canadian government has provided homeowners with a great deal of variety by issuing insurance licenses to many different types of financial institutions. It pays to compare different offers to get the most affordable policies. Here are some places where you can purchase home insurance policies:
- Insurance Companies
- Insurance Comparison Websites
- Mortgage Providers
You can even tell the insurance firms that you are comparing their offers with others. The best home insurance companies will take this into consideration. Obtain the best home insurance rates from multiple sources, compare their coverage with their price and save money.
How To Compare The Coverage Options of Different Insurance Companies?
The standard insurance policy will attempt to provide you with protection against the most common perils and risks. These risks are also based on which province, you live in. British Columbia standard insurance policies might be different than those found in Quebec.
Common perils include fire, lightning, explosion, falling objects, theft, vandalism and accidental glass breakage coverage to the primary home. You might see written into certain policies, additional 15% of detached structures limits. Some home insurance policies might even cover cash cards up to a very low limit.
Most insurance policies start out being very general. If you want to add more specific coverage, you might choose one of the following:
- Dwelling Coverage
- Liability Insurance
- Other Structure Coverage
- Personal Property Coverage
- Loss of Use Coverage
- Medical Payment Coverage
- Escape of Fuel Oil Coverage
- Comprehensive Water Coverage
- Watercraft Coverage
- Enviroguard Coverage
Homeowners add coverage when the basic policy is not high enough or does not include what they specifically own. Watercraft Coverage is a good example. Watercraft can provide coverage up to $100,000 or more while a basic policy might only cover up to $2,000 or so. You can get a discount for approved boating training courses.
Your basic personal belongings might be covered to $3,000 or so in standard coverage; but you might have a wedding ring, jewelry, watches, furs or coin collection that is worth more than the $3,000 limit. You can specifically list these in Scheduled Personal Articles or Riders for as much as you want.
Enviroguard coverage allows you to replace any of your old damaged appliances with more eco-friendly models, such as Energy Star.
How To Find Out Damages Which Are Not Covered in The Insurance?
Many homeowners assume that anything and everything is covered by their homeowner’s insurance. Unfortunately, that is not necessarily true. The insurance companies will put a lot of perils and damages in their standard policies, along with a few exotic ones; but some things are left out.
Learn how to find out damages which are not covered by the insurance policy. The best home insurance companies will offer you Additional Coverage. This is a good place to start. If Additional Coverage is offered, then something is probably not covered in the main policy.
Once again, your province matters. For example, in Alberta, British Columbia, Nova Scotia and Ontario, homeowners residences can add something called Comprehensive Water Coverage. This includes water damage from water, septic or sewer, storm surge or flooding. That sure sounds like the basic coverage covers very limited water damage.
Earthquake Coverage is also an additional coverage for some insurance agencies. If you run a home-based business, you may need to add Small Business Liability insurance. And, mold removal and remediation is usually not covered.
The good news with insurance is that if you want to add something, you can. You can add Scheduled Personal Articles or Riders to specifically name what you want to be covered and for what amount. These can be very important for valuable art, jewelry or coin collections.
How To Find The Cheapest Home Insurance?
It might be wise to write down the most important things you want to be covered in your property insurance. Then, you should compile home insurance quotes from various sources. Finally, see what each firm is charging for premiums.
The next stage of comparing home insurance quotes with one another is to see if there are any ways to lower the price. Sometimes, installing a security alarm system will lead to a reduction in rates. It only makes sense. Here is how to find the cheapest home insurance:
- Avoid Over-Insuring
- Get All The Policies From Single Provider
- Enhance Home Safety and Security
- Always Ask for Discounts
Just like most businesses, insurance companies like it when you bundle multiple policies with them. You could include home, life and car insurance with a single provider.
Some discounts are given if you take special training courses, such as for Watercraft Coverage. Other discounts are given to those who go for a certain number of years without a claim. Every penny counts.
Doesn’t Mortgage Insurance Cover My Home?
Home ownership can be a bit confusing because there is both mortgage insurance and house insurance. Don’t both of these protect your home? They are both associated with home ownership, but slightly different.
House insurance (or property insurance) covers the physical house and your belongings inside. On the other hand, mortgage insurance covers your financial lender against your default. It covers the financial loan, not the physical property.
Find the best house insurance rates in BC to make sure that your family’s dwelling is secure. You can’t predict the future. With house insurance, you have protection against uncertainty.
And, don’t forget liability
Many home owners will concentrate on the personal property covered under their homeowner’s insurance policy, but there is more. The best home insurance also protects the owner against liability should someone be injured on your property. The best home insurance will protect you against someone slipping and falling or being bitten by your dog.
Your house insurance protects against bodily injury or property damage sustained by others when you or your covered household residents were legally responsible. This can be a very important protection when you have children.
Why is Renters Insurance Valuable?
So, you have decided that renting a home will give your family more space for the right price. Does the landlord’s insurance include your personal belongings? You might be surprised to learn that most landlord insurance only covers the property and it might be wise to consider renters insurance (also called contents or tenants insurance).
Renter’s insurance can cover personal property, loss of use and liability. Personal property covered could include your large-screen television, laptop computer, coin collection, jewelry, furniture and clothing against fire, theft, and damage. Loss of use could pay for a hotel and restaurant if your apartment, house or condo is damaged and you need emergency lodging.
The aforementioned RateHub found that while the average home insurance cost in Ontario was about $780, the average rental insurance cost in Ontario was about $252. This was for a rented home. You can purchase renters insurance for any time of dwelling, apartment, condo and so forth.
Fortunately, Canadian homeowners have plenty of insurance options for their family home. You need to determine what is the most important to protect. You can add coverage to fill in gaps. Discounts are readily available too, so you can find the best fitting, affordable house insurance.