Home insurance protects the building you own, the belongings inside it and your personal liability. No Canadian province makes it compulsory, but mortgage lenders require it, and a single fire, burst pipe or lawsuit can cost more than most households could absorb. This guide explains how a standard policy is built, which policy form fits which situation, where the common gaps are, and what matters when you are insuring a home you are about to buy. The guides at the bottom of the page go deeper on costs, companies, condos, tenants and each province.
What home insurance covers
A homeowner policy is a bundle of separate coverages, each with its own limit:
| Coverage | What it pays for |
|---|---|
| Dwelling | The house itself: walls, roof, floors, built-in fixtures and attached structures |
| Detached structures | Buildings and structures not attached to the house, such as a garage, shed, fence or deck |
| Personal property (contents) | Furniture, clothing, electronics and other belongings, including many items while they are away from home |
| Additional living expenses | Extra costs of living elsewhere (hotel, meals, temporary rent) while a covered loss is repaired |
| Personal liability | Legal defence and damages if someone is hurt on your property or you accidentally damage someone else’s property |
| Voluntary medical payments | Small medical costs for an injured guest, paid without anyone having to prove fault |
Each coverage has its own limit, shown on the policy’s declaration page. The dwelling limit matters most, because it caps what the insurer pays to rebuild the house. Liability is a separate limit, chosen on its own.
Insure the rebuild cost, not the market value
The dwelling limit should equal what it would cost to rebuild the house from the foundation up at today’s labour and material prices. Market value includes the land, which does not burn down, and it moves with the housing market rather than with construction costs, so the two figures can differ widely in either direction. Insurers estimate rebuild cost from square footage, construction quality, finishes and local building costs, and the estimate should be reviewed after a renovation, an addition or a finished basement.
Policy types: comprehensive, broad and named perils
Canadian insurers sell homeowner coverage in a few standard forms:
- Comprehensive (all-risk): covers the building and contents against every cause of loss except the ones the policy excludes. This is the broadest form.
- Broad form: all-risk coverage on the building, but named-perils coverage on contents. It is a mid-priced option between comprehensive and named perils, and leaves the contents more exposed.
- Basic or named perils: pays only when the damage comes from a peril the policy lists, such as fire, lightning, windstorm, hail, explosion, smoke, theft or vandalism. Anything not on the list is not covered.
- No-frills: a limited policy for homes that do not meet standard underwriting rules, for example because of their condition or unusual risks.
The practical difference shows up on unusual losses. Under an all-risk policy, a loss is covered unless an exclusion applies; under a named-perils policy, it is covered only if it came from one of the listed perils.
Replacement cost vs actual cash value
How a policy values a loss matters as much as what it covers.
| Settlement basis | How it pays | Example: 10-year-old roof that costs $15,000 to replace |
|---|---|---|
| Replacement cost | Cost to repair or replace with new property of similar kind and quality | $15,000, less the deductible |
| Actual cash value (ACV) | Replacement cost minus depreciation for age and wear | Less than $15,000, because 10 years of wear are deducted, then less the deductible |
| Guaranteed replacement cost | Full rebuild cost even if it exceeds the dwelling limit, subject to conditions | Covers the rebuild if construction costs have outpaced the limit |
Replacement cost policies usually require you to actually repair or replace the property to receive the full amount; until then, many pay ACV. Guaranteed replacement cost protects against a dwelling limit that has fallen behind construction costs, but insurers typically require the limit to match their own estimate and the home to be rebuilt on the same site.
Common exclusions and the endorsements that fill them
A standard policy excludes some of the costliest losses Canadian homeowners face. Several can be added back for an extra premium:
| Gap in a standard policy | How it is usually handled |
|---|---|
| Overland water (rivers, lakes, heavy rain entering at ground level) | Overland water or flood endorsement, where the insurer offers it for your address |
| Sewer backup (water and sewage coming up through floor drains) | Sewer backup endorsement, often with its own limit; some insurers give an incentive for a backwater valve |
| Earthquake | Earthquake endorsement, usually with a percentage deductible; most relevant in BC and parts of Quebec and eastern Ontario |
| Service lines (water and sewer pipes between the house and the street) | Service line endorsement |
| Home-based business equipment and liability | Home business endorsement or a separate business policy |
| Jewellery, art, bikes and collectibles above the policy’s sublimits | Scheduling the items individually |
| Gradual leaks, wear and tear, rot, mould from long-term moisture, pests | Excluded: treated as maintenance |
| A home left vacant beyond the period the policy allows | Notify the insurer and arrange vacancy coverage |
Overland water and sewer backup are separate endorsements, and the difference matters: a basement flooded by a storm can involve both, and a policy with only one of them may pay for part of the damage. Earthquake coverage matters most on the West Coast, which is why the BC home insurance guide covers percentage deductibles in detail. Older homes raise their own issues: knob-and-tube or aluminum wiring and galvanized or lead plumbing raise the premium, and updating them can lower it. Upgrades that lower premiums are covered in home renovations that lower insurance premiums.
What drives the premium
Location is a major rating factor: weather and flood exposure, distance to a fire hall and hydrant, and the number and cost of past claims in the neighbourhood. Then come the rebuild cost, the age and condition of the roof, wiring, plumbing and heating, the construction type, your claims history and the deductible you choose. Shopping around, bundling home and auto with one insurer and choosing a higher deductible are common ways to bring the price down. Province-by-province survey figures and the discounts insurers offer are on the page for average home insurance costs in Canada, and the best home insurance companies in Canada guide compares the main insurers.
Insuring a home you are buying
Buyers have a deadline that existing owners don’t: the policy has to be in place on closing day.
- Lender requirement. The mortgage terms make insurance a condition. The policy carries a standard mortgage clause naming the lender as mortgagee (first loss payee), so the lender has first claim on the insurance money for the dwelling. Standard mortgage terms also typically let the lender buy insurance itself if you don’t, covering only its own interest, and add the cost to the mortgage.
- Binder before closing. Your real estate lawyer or notary will ask for proof that coverage starts on the closing date. Insurers provide this as a binder or certificate of insurance, before the full policy documents are issued.
- Timing. Starting quotes a few weeks before closing leaves time to compare insurers and deal with underwriting questions before the binder is needed.
- What insurers ask for. Expect questions on the address, year built, construction type, square footage, heating system, electrical panel and wiring type, roof age and material, plumbing, and your claims history. The home inspection report answers most of them, and the home inspection guide explains what an inspector checks.
- Condo purchases. A condo buyer insures the unit, improvements and liability, while the condo corporation insures the building. The condo insurance guide covers the corporation’s deductible and loss assessments.
Insurance sits alongside other closing costs such as title insurance and land transfer tax, and it becomes part of the monthly carrying costs of owning a home.
Filing a claim
After a loss, the order of steps matters: make the home safe, take reasonable steps to prevent further damage (shut off the water, cover a broken window), photograph and video everything before cleaning up, keep receipts for emergency repairs and hotel stays, and report the claim to the insurer promptly. The insurer assigns an adjuster to assess the damage. Small claims can raise future premiums, so some owners pay minor losses themselves. Step-by-step detail is in how to file an insurance claim in Canada, and what happens if insurance denies your claim covers disputes.
Home insurance companies
Choosing a home insurer in Canada is less about finding one company that wins everywhere and more about knowing which insurers compete hard in your province and for your type of home. The insurer that is cheapest for a new detached house in Calgary may be expensive for a century home in Halifax. This guide compares the national insurers, lists the regional and member-based companies worth adding to a quote list in each province, and explains what to compare beyond price. For how policies work, see the guide to home insurance in Canada; for typical premiums, see average home insurance costs by province.
National home insurers compared
| Company | What it is | Sold through |
|---|---|---|
| Intact Insurance | Canada’s largest property and casualty insurer; owns belairdirect | Brokers (Intact) and direct (belairdirect) |
| TD Insurance | Insurance arm of TD Bank; bundling and online-purchase discounts | Direct, including online |
| Aviva | Large national property and casualty insurer | Brokers |
| Desjardins | Quebec-based co-operative financial group | Direct |
| Wawanesa | Mutual insurer founded in 1896 in Wawanesa, Manitoba | Independent brokers |
| The Co-operators | Co-operative insurer | Its own advisors |
| Definity (Economical) | Economical Insurance, now becoming Definity Insurance | Brokers; Sonnet is its online brand |
| CAA Insurance | Auto-club insurer with savings for CAA members | CAA agents or brokers |
| Square One | Vancouver-based online provider; customizable policies | Direct online |
TD Insurance
TD sells directly, and its main pricing levers are bundling home and auto and discounts for buying online or through affiliated alumni and professional groups. Discount amounts change with its promotions, so check the current offer. Claims experiences reported by customers vary, so it is worth reading recent reviews for your province.
Intact Insurance
Intact is the largest property and casualty insurer in the country and also sells directly as belairdirect, which absorbed the Johnson Insurance brand in 2023, so two quotes that look like competing companies can come from the same group.
Wawanesa
Wawanesa is a mutual insurer, owned by its policyholders, that started in Wawanesa, Manitoba, in 1896. It sells across the country through independent brokers.
Regional and member-based insurers by province
National insurers compete everywhere, but in several provinces a local or auto-club insurer is also worth quoting:
| Province | Insurers to add to the list | Province guide |
|---|---|---|
| Alberta | AMA (Alberta Motor Association), Peace Hills Insurance, SGI Canada | Alberta |
| British Columbia | BCAA, Square One | BC |
| Saskatchewan | SGI Canada | Saskatchewan |
| Manitoba | Wawanesa | Manitoba |
| Ontario | Gore Insurance (now part of Beneva), Desjardins, CAA Insurance | Ontario |
| Quebec | Desjardins, Promutuel, Beneva | Quebec |
| Atlantic Canada | CAA Atlantic, belairdirect (formerly Johnson Insurance) | Nova Scotia, New Brunswick, Newfoundland and Labrador |
Auto clubs such as BCAA and CAA give their members lower insurance prices, so when comparing their quotes, the membership fee belongs in the price.
How to compare home insurance companies
Price is the easiest thing to compare and the least informative on its own. Two quotes can differ because one includes sewer backup and a higher liability limit and the other doesn’t. When lining up quotes, check that each one has:
| What to match | Why it matters |
|---|---|
| The same dwelling limit, based on rebuild cost | A lower limit makes a quote look cheaper and leaves you underinsured |
| The same policy form (comprehensive, broad or named perils) | Named-perils policies cover much less |
| Replacement cost or guaranteed replacement cost | ACV settlement pays much less on older property |
| The same deductible | A higher deductible hides part of the price difference |
| Overland water and sewer backup endorsements, with their limits | These are common gaps in a claim |
| Liability limit | A higher limit costs more and protects more, so compare quotes at the same limit |
Beyond the policy, look at how each insurer handles claims: whether there is 24/7 claims reporting, whether you can use your own contractor, how quickly adjusters are assigned after a regional storm, and complaint records with the provincial regulator and the General Insurance OmbudService. The insurance broker vs direct guide explains the two ways to buy.
Bundling, loyalty and when to switch
Bundling home and auto is a widely available discount, but its size varies by insurer. Insurers reprice regularly, so re-quoting every few years, or after a renovation, a new roof or paying off the mortgage, keeps the policy competitive; switching at renewal avoids cancellation penalties. The full list of discounts is on the average home insurance cost page, and renovations that lower home insurance premiums covers upgrades insurers reward.
Choosing a policy for a condo, rental or tenancy
Not every insurer is equally strong in every product. Condo owners need a unit-owner policy with loss assessment coverage, and the condo insurance guide explains what to look for. Renters buy tenant insurance, compared separately in the best tenant insurance companies guide.
A house you rent to someone else needs a landlord (rental dwelling) policy rather than a homeowner policy, and renting out a home must be disclosed to the insurer. Landlord policies add loss of rental income coverage, which pays the lost rent if a covered loss leaves the property unrentable. A lease can require tenants to carry their own insurance; tenant insurance covers the tenant’s belongings and liability.
Home warranties
A home warranty and home insurance sound similar but pay for different things. Home insurance pays when something sudden happens to the house, such as a fire, a storm or a burst pipe. A home warranty pays when a furnace, water heater or appliance simply wears out. This page explains what third-party warranties cover and exclude, how they compare with the mandatory warranties on new homes, and when one is worth buying.
Short answer
A home warranty can be useful for buyers of older homes whose systems are near the end of their lives, but only if the plan’s coverage caps are realistic and its exclusions don’t rule out the likely failures. Setting aside a repair fund gives similar protection with no claim restrictions.
New home warranty vs third-party home warranty
| Type | Who provides it | Coverage period | Required? |
|---|---|---|---|
| New home statutory warranty | Builder, backed by a provincial program | 1 to 10 years depending on the province and defect | Mandatory for new homes in several provinces, including Ontario, BC and Alberta |
| Third-party home warranty or protection plan | Private company | Usually a 12-month or month-to-month term | Optional |
Provincial new home warranties
| Province | Program | Coverage |
|---|---|---|
| Ontario | Tarion | 1 year work and materials, 2 years water penetration and electrical, plumbing and heating systems, 7 years major structural defects |
| British Columbia | 2-5-10 warranty (Homeowner Protection Act) | 2 years materials and labour, 5 years building envelope, 10 years structural |
| Alberta | New Home Buyer Protection Act | 1 year labour and materials, 2 years delivery and distribution systems, 5 years building envelope, 10 years major structural components |
| Other provinces | Varies: some have provincial programs, some rely on builder warranties | Varies |
A new home with a statutory warranty is already covered for major structural and mechanical defects for several years, so a third-party plan adds little during that period.
What third-party home warranties typically cover
Canadian protection plans, such as those sold by Enercare and Reliance Home Comfort, are built around heating, cooling, plumbing and electrical systems, with separate plans or bundles for each. What any one plan covers is set by its own terms, so the useful questions are these:
| Coverage category | What to check in the plan |
|---|---|
| Heating and cooling (furnace, A/C, heat pump) | Whether replacement is covered or only repairs, and any age or pre-existing condition limits |
| Plumbing and drains | Which pipes and fixtures are included, and whether drain clogs or outdoor lines are |
| Electrical | Whether code upgrades needed during a repair are covered |
| Water heater | Whether it is in the plan, and whether it is owned or rented |
| Appliances | Whether they are included at all |
| Roof | Storm damage to a roof is an insurance claim; check whether the plan covers roofs at all |
Home warranty vs home insurance
| Feature | Home warranty | Home insurance |
|---|---|---|
| Pays for | Systems and appliances breaking down | Sudden events (fire, theft, storm, burst pipe) |
| Trigger | Normal wear and tear | Sudden, accidental damage |
| Examples | Furnace failure, water heater, appliances | Fire damage, storm damage to the roof, theft |
| Cost | Set by the plan, often monthly | Varies by province; see average home insurance costs |
| Required by a mortgage lender? | No | Yes |
A roof shows the split clearly. Storm damage to a roof is an insurance claim. A roof that has simply reached the end of its life is neither an insurance claim nor, unless a plan says otherwise, a warranty claim: it is a capital expense to budget for over time.
The alternative: a self-funded repair reserve
Instead of paying plan fees, some owners put the same amount into a savings account:
| Approach | Trade-off |
|---|---|
| Home warranty or protection plan | Defined coverage, with caps and exclusions |
| Self-funded repair reserve | No restrictions or claim process; the money stays yours if nothing breaks |
As an illustration, setting aside $700 a year builds a reserve of $3,500 after five years and $4,900 after seven, before any interest. Whether that covers a failure depends on the repair; getting a quote for replacing the oldest system in the house shows what the reserve needs to reach.
When a home warranty makes more sense
| Scenario | Value of a warranty |
|---|---|
| Buying an older home with ageing systems you didn’t choose | Higher: reliability is unknown |
| The seller includes a free one-year warranty | Take it; there is no cost |
| First-time buyer with no repair fund yet | Higher: covers the first year while savings build |
| Several ageing systems at once (heating, appliances, water heater) | Higher: several near-term failure risks |
| Rental property where predictable repair costs matter | Moderate |
When a home warranty is lower value
| Scenario | Value of a warranty |
|---|---|
| New home already covered by a statutory builder warranty | Low: the coverage overlaps |
| Home under 10 years old with systems in good condition | Low: failure risk is small |
| An adequate repair reserve already exists | Low: you are effectively self-insured |
| The exclusions rule out the risks you are worried about | Negligible |
What to check before buying a home warranty
| Feature | What to look for |
|---|---|
| Coverage cap per item | Whether the cap would pay for a full replacement, not just a repair |
| Pre-existing condition clause | A broad clause can disqualify almost any claim on an older system |
| Service call fee | Whether each visit carries a fee or deductible |
| Contractor choice | Some plans require their own contractors, and quality varies |
| Renewal terms | Whether the company can raise the price or drop coverage at renewal |
| Cancellation policy | Whether you get a refund if you sell the home |
Bottom line
For new homes with statutory builder warranties, a third-party plan adds little. For older resale homes with ageing systems and no repair fund, a home warranty can provide useful protection, provided the exclusions and caps fit realistic repair costs. Neither replaces home insurance, which a lender requires and which covers the sudden, large losses a warranty never will; the best home insurance companies in Canada guide compares insurers.
Home insurance guides
Costs and companies
- Average home insurance cost in Canada: survey figures by province, the factors insurers price and the discounts that lower a premium
- Title insurance in Canada
Condo and tenant insurance
- Condo insurance in Canada: the corporation’s master policy, unit improvements and loss assessment coverage
- Tenant insurance in Canada: how renters coverage works, what it costs and whether you need it
- Tenant insurance companies and provinces are sections of the tenant guide: companies, Ontario, British Columbia, Alberta and Quebec
Home insurance by province
Each province is a section of the page on average costs: British Columbia, Alberta, Calgary, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia and Newfoundland and Labrador.
Claims and policy questions
Browse All Home Insurance in Canada: Coverage, Policy Types and Guides Articles
Browse all 4 articles in this section.