Whether you're making the big move out of your parents' basement or are planning on settling down in your dream home, buying a new property is always a complicated process. Countless things need to be dealt with before you get to sign on the dotted line.
One of the most important tasks is finding a reliable home insurance policy (without breaking the bank, of course).
If you don't know how to choose home insurance or are looking for a few tips on what to include in your policy, you've come to the right place! Our team of licensed insurance advisors has put together a smashing "how-to" guide that can turn a first-time insurance buyer into an expert.
How to choose homeowners insurance in Canada 101 — the basics
Before delving into the nuances of buying home insurance in Canada, we wanted to quickly review some of the basics that you need to be aware of.
What is home insurance?
Home insurance is an agreement between a homeowner and an insurance company. Homeowners are responsible for making timely payments, either on a monthly or yearly basis. In turn, insurance companies provide financial coverage after an event damages your home or its contents.
Although insurance isn't technically required for a new home, chances are, you'll need to purchase.
This is because mortgage lenders won't shell out a dime unless you've acquired home insurance.
What types of properties does home insurance cover?
Home insurance only covers certain types of houses (detached homes, townhomes, etc.).
If you own a condo or are renting a property in Canada, you can still obtain financial protection; you just need to purchase a separate form of insurance (condo insurance or tenant insurance, respectively speaking).
Types of home insurance in Canada
Before learning how to choose the right home insurance policy for you and your family, you need to be aware of the various options (and their differences). These two options are basic and all-risk home insurance.
Basic home insurance
Basic coverage is the "meat and potatoes" of the home insurance industry. Basic home insurance safeguards Canadian homeowners by ensuring that they receive financial coverage after a specific risk or peril (an insurance term for unforeseeable risk or unavoidable natural disaster).
Some types of risks and perils covered by basic home insurance include:
- Theft and vandalism
- Windstorms
- Fire and smoke
- Hailstorms
- Fallen trees
All-risk home insurance
In contrast, all-risk home insurance offers much more extensive coverage. Unlike basic coverage, all-risk home insurance protects homeowners from (almost) all risks and perils that could potentially damage their property.
Because of this, it's an excellent option for homeowners that are prone to a wider variety of natural disasters or issues. But, the additional protection does come at a cost — all-risk home insurance is more expensive than basic coverage.
However, before making a final decision, you should be aware that a handful of risks and perils are not covered by all-risk home insurance. Some common examples include earthquake coverage and overland water insurance. You’ll want to include these add-ons in your home insurance policy if you live in an area that is prone to particular natural disasters.
If you wish to include certain risks or perils to your all-risk home insurance policy, you can ask your provider about buying an add-on.
How to pick home insurance that won't break the bank
Now that you understand what home insurance is, it's time to get to the topic at hand — how to choose a home insurance policy in Canada. Taking the time to utilize these tips will make it much easier to find an affordable home insurance policy that protects your property, belongings and family.
Get quotes online from a licensed insurance advisor
In the past, comparing home insurance quotes was a time-consuming and arduous process for Canadian homeowners. Thankfully, modern homeowners can skip the lines and hassles by working with a licensed insurance advisor online.
Licensed insurance advisors can help you find the best, most affordable home insurance quotes in Canada. Our insurance advisors work with the most respected providers in Canada, which means that you get access to top-quality quotes every time.
If you're not convinced, feel free to reach out to one of our team members today. We can provide you with ten high-quality home insurance quotes in ten minutes or less.
Assess your needs
No two homeowners are exactly alike — so why would they have the same needs? In short, they wouldn't. When it comes to home insurance, everyone has different preferences and expectations that they want to meet.
If you're having a hard time making a decision, you should start by assessing your needs.
Firstly, you'll need to assess your financial needs. Be sure to set a budget for your prospective home insurance policy (and stick to it!). Setting a budget gives you a firm number to work with when you're comparing plans.
Additionally, it would be best if you took a moment to assess the property's physical location. Take note of large trees, nearby bodies of water or other potential hazards that could damage the home in the future.
Taking the time to do this will give you a better idea of what type of home insurance you may want to purchase. Doing this can also help you decide whether you'd like to buy add-ons or not.
Consider bundling your home and car insurance policies
If you own one or more cars, you may want to ask your insurance provider about bundling your home and car insurance.
For those that don't know, bundling is a term that describes the act of purchasing more than one type of coverage from a single company.
Although this adds a step or two to the initial buying process, it can help you save a hefty chunk of change over time. Bundling your policies generally allows you to save 10% to 15% on car insurance and up to 5% on home insurance.
Do you feel like an expert?
We hope that this article has answered your questions about buying home insurance in Canada. However, if some details are still unclear, we recommend reaching out to one of our licensed insurance advisors. Our team members are more than happy to share their knowledge and experience with homeowners, just like you.
