Average Home Insurance Cost in Canada
Purchasing a home and signing on those dotted lines might be one of the best feelings for a person. However, home buying has many requirements and responsibilities that the home owner needs to live up to. One of these important tasks is finding adequate and cost-effective home insurance. Although home insurance is not mandatory in Canada, it is a wise investment not to let unforeseen damages or thefts burn a hole in your pocket. This article will discuss the nitty-gritty question, “how much is home insurance (on average) in Canada?” and a number of other details that you should know about it. Meanwhile, if you are looking for the most cost-effective home insurance in Canada, contact a Surex advisor to compare quality quotes in ten minutes or less.
How much is home insurance in Canada?
An average Canadian household pays around $840 – $960 a year for home insurance premiums. However, insurance premiums differ based on your location- different provinces have different premium rates.
Here is a quick glance at what it looks like in some states across Canada.
- Alberta households pay around $1000
- British Columbia pays $924
- Newfoundland and Labrador pay $780
- Ontario pays around $1200
Among these, Ontario pays the maximum due to inflation causing construction supply chain issues.
What factors affect the average home insurance cost?
The answer to the question, “how much is home insurance?”, is also affected by several factors listed below.
The market value of your home
The location and overall size of your property determine the market value of your home. The age of your home and the number of resales will also affect its value. The more the value of your home, the more will be your insurance costs.
The cost and replacement value of your home
This is probably one of the most important factors that affect your insurance premium. The replacement value includes the materials, labor, and time needed to rebuild your home or even parts of it.
The home’s construction type
This includes the material used to build your home, the plumbing, wiring, weathering, roof condition, and framing. A home built with premium quality material and exotic interiors will be more costly to insure.
Your average credit score
This is one of the least talked about factors in determining home insurance premium. But if you have a low credit score, your insurance premium will be much higher than average.
Variables and add-ons
This is a variable factor that depends on the homeowner. You can cut down on insurance premiums the kind of coverage you want. For example, if you want to include disaster insurance, your cost will go up. Thus, if you do not wish to pay the extra amount, you also have to ensure that your house does not suffer any damage that can burn a hole in your pocket.
Basic vs comprehensive home insurance
You can either get a basic plan or a comprehensive insurance plan, which will determine your average annual premium. The answer to the question, “How much is the home insurance cost (on average) in Canada?” will depend on the coverage opted for.
A basic plan covers your home against damages caused by only a few events. Damages due to fire, theft, and wind are generally covered within the basic insurance plan. Anything that is not mentioned in this basic plan is generally out of bounds. You need to know the details with your insurance partner before buying any plan.
However, events like floods, earthquakes, other disasters, and natural calamities are generally not covered in such basic plans. You need a comprehensive home insurance plan for this to cover all bases. This will lead to increased insurance costs. If your home location is prone to floods or earthquakes, it is wise to go for a comprehensive plan. You can add the extra features and customize them with your insurance provider above the basic plan.
How do you lower your annual home insurance premium?
Though home insurance rates are higher in some locations in Canada, there are multiple ways you can reduce the average cost. Take these factors into account to get a better deal.
Look around for the best insurance provider
When you look for home insurance, do not settle. Make sure you contact a licensed home insurance provider and get the best value for your money. Get quotes from different providers, read genuine customer reviews, talk to locals in your area, and shop around a little.
Though the low premium is the most significant factor to consider, you also need to consider the deductibles, replacement costs offered, and other factors your provider offers. You should look at what actual cash value you are offered to replace items in your home before settling for an insurance provider.
You can buy home and motor insurance from the same provider
Most home insurance companies that offer home insurance also offer motor insurance. In most cases, if you buy both insurances from the same provider, the average cost of your home insurance will also go down. With the right insurance company, your average home insurance cost can go down as much as 25%.
Look for discounts
Many home insurance companies give hefty discounts on many accounts like loyalty discounts, retiree discounts, retired personnel discounts, affinity discounts, and more. You need to talk to your insurance provider agent if you qualify for any of these to bring down the average cost of your home insurance premium.
Do not switch insurance companies mid-term
Do not switch between insurance providers in between an insurance term. You will be charged a hefty penalty if you cancel your subscription mid-term.
Improve the security of your home
You can reduce your insurance premium by installing a smoke detector or burglary alarm and smart security system to protect your home from threats and reduce insurance costs.
Endnote — How much is home insurance in Canada?
Now that you know the answer to the question, “how much is home insurance in Canada?”, you can prepare a realistic budget before starting insurance shopping. No matter the average cost, your home insurance will stop you from paying out of your pockets in case of unforeseen situations.
You need to look out for different ways to cut down on the average cost of the premium to stay on the right side of the policies.
