Is Home Insurance Mandatory In Canada?
As you may know, certain types of insurance coverage, like car insurance, are legally required throughout Canada. Various types of insurance are meant to protect policyholders from a wide array of unforeseen risks and perils that they may not be able to pay for otherwise.
As important as personal insurance policies are, not all types of insurance are legally required in Canada. This leads to the commonly asked question — is home insurance mandatory in Canada?
Continue reading to learn more about the ins and outs of home insurance, the requirements regarding home insurance in Canada and a handful of tips on how you can reduce your premiums.
START A QUOTEWhat exactly is home insurance and why is it important for homeowners in Canada?
As a quick reminder, home insurance is a type of coverage that financially protects homeowners from unforeseen risks and perils.
Different types of home insurance cover various risks and perils.
For instance, personal liability insurance financially protects policyholders from legal fees if third-party property damage or an unexpected injury occurs on their property. On the other hand, contents coverage financially protects policyholders if an unforeseen event, like a house fire, damages their own personal property.
Click here if you'd like to check out our guide for home insurance in Canada.
Is home insurance mandatory for Canadian homeowners?
So, is home insurance mandatory in Ontario and other Canadian provinces?
No, home insurance isn't legally required for homeowners in Canada. But at the same time, homeowners generally do need to purchase a home insurance policy.
Here's why:
There are no Canadian laws that currently enforce homeowners to purchase home insurance So, from a legal standpoint, home insurance isn't technically required.
This is where things start to get a bit tricky.
If you need a mortgage for your home (which most home buyers do), your mortgage lender will most likely require you to purchase an acceptable home insurance policy. Mortgage lenders require homeowners to buy home insurance because they want to protect their investment. Technically, your mortgage lender owns part of your home until you've paid off your mortgage.
This leads to the next question…
Is home insurance mandatory in Canada if you've paid off your mortgage?
No, once you've paid off your mortgage, you can choose to continue insuring your home or drop your policy.
Although dropping your home insurance policy may be tempting (as you can save a few bucks), we highly suggest that all homeowners maintain their home insurance policies!
Home insurance is much more than one of the costs associated with purchasing a home — it's the best available tool for protecting your property, belongings and loved ones. You never know when an unforeseen event (a natural disaster, theft, vandalism) will affect your property or your family. So, if you want to ensure that you can "weather the storm", we suggest keeping your home insurance policy intact after paying off your mortgage.
How can policyholders reduce their home insurance premiums in Canada?
As mentioned earlier, if you need a mortgage for your new home, it's more than likely that your prospective mortgage lender will ask you to purchase a home insurance policy that meets their standards.
Although home insurance rates are notoriously high in many parts of Canada, there are several things that policyholders can do to lower their rates by a significant amount.
Try these simple (yet effective) tips if you'd like to save on home insurance in Canada:
- Bundle multiple insurance policies with the same carrier
- Install a security system in your home
- Make claims strategically
- Increase your home insurance deductible
Bundle multiple insurance policies with the same carrier
Bundling your insurance policies with the same provider is a fantastic way to reduce your insurance premiums passively.
When you purchase multiple policies from the same insurance carrier, they will generally reduce your premiums by a significant amount (sometimes as much as 25%!).
Install a security system in your home
Home insurance providers will offer lower rates to homeowners that opt for a home security system, like a security camera or burglar alarm.
Home insurance companies do this because statistics have shown them that properties with security systems are less prone to theft and vandalism.
Make claims strategically
Has a windstorm caused minor damage to your roof? Did a fallen object unexpectedly scratch your freshly painted garage door? Although you may be tempted to file an insurance claim, we suggest saving them for major events.
Making a number of home insurance claims in a short period can stain your insurance history and negatively influence your insurance premiums. This is due to the fact that home insurance companies equate high numbers of claims with high-risk homeowners.
Additionally, it doesn't make financial sense to file a claim if the damage is less than the deductible. Speaking of deductibles…
Increase your home insurance deductible
Increasing your home insurance deductible is an effective way to reduce your monthly or annual rates.
Generally, home insurance providers charge homeowners more if they have a low insurance deductible (as they are more inclined to submit a claim).
In contrast, home insurance providers tend to charge homeowners less if they have a high home insurance deductible (as they are less inclined to submit a claim).
Save up to 25% on home insurance when you shop with Surex!
One of the best things that you can do to save on home insurance is to partner up with the pros at Surex.
At Surex, we do things a little bit differently; instead of pairing you with the first available broker, we match you with your own insurance advisor. Instead of spending time re-telling the same story to different brokers, you can jump right into the nitty-gritty action and start comparing quotes!
Reach out to one of our expert insurance advisors today to receive quality quotes from Canada's top home insurance providers in ten minutes or less!
Want to learn more about home insurance in Canada?
We love teaching Canadians about the ins and outs of insurance — that's why we've filled our blog with fantastic articles about a wide variety of topics, ranging from home insurance to high-risk car insurance.
If you have questions about your home insurance policy, you can reach out to a Surex insurance advisor online or over the phone.
