Home insurance covers your home in case of damage, theft, or loss. A great home insurance policy can also compensate you and your family if there’s a natural disaster, or if someone injures themselves in your home or yard. Some may even pay for a hotel stay or rental while repairs are made to your home.
A more comprehensive home insurance policy also covers the contents of your home, so you can feel good knowing that your designer shoes or your priceless family heirloom are covered in case of theft or disaster. But choosing the right policy means understanding home insurance, so here’s how to choose a policy that’s right for you.
From natural disasters, like fires or floods, to someone who breaks their foot on your front steps, home insurance can provide coverage that lets you rest easy. Home insurance policies vary, but can cover a variety of events, including damage or loss to your home, theft or loss of personal possessions or valuable items, injury or damage to others visiting your property, and damage to someone else’s property. Coverage typically includes you and your direct family members. Some policies overlap with other forms of insurance including car, business, and disaster insurance.
Different kinds of home insurance cover you in various situations, so you’ll likely need a combined policy to cover your property, home, and possessions.
Home insurance policies generally operate in tiers, with varying levels of coverage.
If you purchase your new home or property with a mortgage, you’ll be required to obtain insurance and your lender will require proof of suitable home insurance before closing on your home. But, if you purchase your home in full, home insurance is not legally required in Canada.
Insurance costs vary based on your home’s materials, construction type, safety systems, risk factors, crime rates, plumbing, and even your proximity to the closest fire hydrant. Your insurance might cost more if you have an outdated electrical system with a higher fire risk, or if you’re planning on doing in-depth renovations.
The province you’re purchasing in will affect your insurance costs; Quebec has the lowest home insurance costs, and British Columbia typically has the highest. The valuable items you include in your policy will also impact your rate. Shop around for home insurance and get a quote using the postal code of your potential property to get a sense of how much your insurance might be.
If you buy an apartment or condominium property, the corporation that owns the property will have a policy that covers the exterior of the building and common indoor spaces. Your own home insurance for an apartment or condo will include the interior of your own living space, the contents of your home, your patio, and other personal spaces, like your storage locker.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.
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