What does home insurance cover?
Home insurance is like car insurance — but instead of protecting your car and those in it, you’re protecting your home and its contents. It’s important to talk to your insurance provider to understand what’s included in your premium as there may be exclusions to keep in mind, as well as inclusions — what good is being covered if you don’t know what you’re covered for? By getting home insurance, you’re protecting yourself as well as your home from unforeseeable events and other unfortunate circumstances.
How much is the average premium?
Premiums differ depending on where you live and which insurance provider you’re with. Why the difference in cost? When you pay a premium on a house, you’re paying to replace the entire structure in the event of a fire or other hazard. Condo insurance protects your unit and any improvements, as well as the contents of your home. Other factors that affect your home's premium include location, value, age, neighbourhood crime rates, and build quality.
How can you compare home insurance?
Do your research by reading reviews left by other insurance providers' clients, exploring the rates available, and testing their customer service by calling in to speak with an agent or sending them an email with all of your questions. There are so many options in Canada that will suit your specific needs and location. Bundling products (ex: home and auto insurance) and shopping around before your closing date can help you get a better quote.
Is home insurance required for a mortgage?
In Ontario, home, condo and tenant insurance are not mandatory by law. However, almost every bank and mortgage lender will request it. Home insurance protects you from unforeseeable events that could disrupt your income or ability to repay the mortgage.
Don't forget; Lenders don't just give you a mortgage because they like your credit score and income level. They will assess whether they can sell your home in the event of a foreclosure. Home insurance also includes coverage for the mortgage lender indirectly, as you are assuring the asset they're lending you money on. In the case of default, they'd want a marketable property to sell and earn back their outstanding loan.