If you've done your research, then you know that home insurance isn't a luxury; it's a necessity. Having high-quality home insurance gives you confidence and peace of mind. If a covered risk or peril damages or destroys your home, you know that your home insurance company is there to provide financial support when you need it the most.
However, even though most homeowners know that home insurance is vital, not everyone knows how much they should have in the first place.
Today's post will answer the question, "how much insurance do I need for my home?". We'll also briefly go over the various types of home insurance and coverages that are available and help you figure out which one benefits you the most.
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How much home insurance do I need to buy a home in Canada?
Although home insurance isn't legally mandated in Canada, you must purchase a sufficient policy if you need a mortgage for your future home. Mortgage lenders require home buyers to obtain homeowners insurance in order to protect their investment (i.e. your property).
Different mortgage lenders in Canada have their own unique home insurance requirements. Confirm your mortgage lender's requirements before proceeding with the home insurance process.
Now that you know the answer to the question, "how much home insurance do I need in Canada?", let's look at the various types of insurance you can purchase for your property.
What are the different types of home insurance in Canada?
There are four types of home insurance policies that you can choose from:
- No frills home insurance
- Standard home insurance
- Broad-form home insurance
- Comprehensive home insurance
No frills home insurance in Canada — No frills home insurance (also referred to as Fire and Extended Coverage form) is the most basic form of home insurance you can get for a property. These types of insurance policies are relatively cheap, but they are only available for homes with unique needs or structural defects. Because of this, very few homeowners in Canada have no frills home insurance.
Standard home insurance in Canada — Standard home insurance (also referred to as named perils home insurance) provides more financial protection than no frills home insurance but is still relatively basic in what it offers. These types of insurance policies financially protect homes and their contents from named risks and perils. If your property is damaged by a peril that isn't listed on your policy, you will not receive coverage from your insurer.
Broad-form home insurance in Canada — Broad-form home insurance is, in basic terms, a hybrid form of home insurance that offers aspects of both comprehensive and standard policies. These types of insurance policies protect your property from all risks and perils (with exclusions) and your possessions from named perils.
For instance, if a fire damages your property and possessions, and fires are a named peril on your policy, then you'll receive coverage. On the other hand, if a wind storm severely damages your home and possessions, and wind storms aren't listed on your policy, then you will only receive coverage for your property, not your possessions.
Comprehensive home insurance in Canada — Comprehensive home insurance offers the most extensive protection. These policies financially protect your home and its contents from all risks and perils (with exclusions). Comprehensive insurance also provides the most peace of mind, as you know you'll be covered if a risk or peril damages your property.
If you're wondering, "what insurance do I need for my home?", the answer depends on your budget and your personal circumstances. That being said, most homeowners and insurance experts feel that comprehensive home insurance is the safest option due to the fact that it provides the most protection.
What are the differences between liability coverage and personal property coverage in Canada?
When it comes to home insurance liability coverage and personal property coverage are equally important but very different.
Personal property coverage in Canada
Personal property coverage financially protects you from losses or damages related to:
- Your home
- Your possessions
- Your vehicle
Liability coverage in Canada
On the other hand, liability coverage financially protects you from lawsuits resulting from third-party injuries or third-party property damage. Liability coverage can also financially cover damages awarded and additional court fees.
Generally, home insurance policies come with a minimum of amount of coverage; that being said, most insurance advisors recommend investing $1 million to $2 million in coverage (or more under select circumstances). This is something you should keep in mind while comparing insurance quotes for your home.
Your policy is built around your personal property and liability coverage. Speak with your Surex insurance advisors to learn more.
How much home insurance do I need in Canada if I own a condo?
This is a common misunderstanding. Condo owners don't need home insurance; they need condo insurance.
Condo insurance is a different type of property insurance that financially protects condo owners when a covered event damages the inside of their unit or possessions.
Bonus tip — Learn more about condo insurance in Canada
You can save up to 25% on insurance when you team up with Surex
Now that you know the answer to the common question, "how much home insurance do I need?", you're ready to start comparing quotes. The easiest way to access the best home insurance quotes in Canada is by teaming up with a reputable insurance brokerage, like Surex.
We work closely with several of the best home insurance companies in Canada. Having a close working relationship with the best insurers allows us to provide policyholders with some of the most competitive insurance quotes on the market.
Additionally, when you team up with Surex, you're paired with your own insurance advisor. Instead of re-explaining your situation or question, you can chat with the same person every time.
Want to get started? Contact us over the phone or visit our website to learn more and to receive your insurance quotes in ten minutes or less! While speaking with your insurance advisor, be sure to ask about the various benefits of bundling your policies. Bundling your insurance policies with one of Surex's carriers can help you save as much as 25% on your premium.
