How to Get the Best Home Insurance Rates in Canada

By Corey Sherwood

Purchasing a new home is a complex process with tons of moving parts. With so much going on, it’s common for people to neglect to consider the potential savings available to them throughout the process. Particularly for less-experienced first-time buyers, the prospect of spending less can get lost in the stress and excitement of impending homeownership. It makes sense, but this can prove to be a costly mistake over time. 

Just like no two houses are the same, insurance providers, policies, and rates are unique and constantly changing. Even between two different people looking to purchase the same house, the exact insurance rate for each will vary considerably depending on a number of factors. Personal credit score, deductible value, and the collective value of your personal items — among many other things — contribute to your insurance rate. 

If you’re looking to get a policy that provides sufficient protection for you, your home, and your belongings while still offering affordable home insurance rates, there are quite a few things you need to consider.

Tips to get the best home insurance rate

Although it’s not the most sizable of your ongoing homeownership costs, home insurance certainly needs to factor into your pre-purchase financial planning. Getting the best home insurance rate is a common concern for people as they begin the journey into property ownership. Some important considerations go into determining which home insurance policy and price are right for you, including the questions listed below. 

Questions to ask when assessing insurance rate

Answering the questions below is crucial to narrowing down the list of policies that are best suited to your specific homeownership situation. Be sure to thoroughly consider each question before making your selection. 

1. How much home insurance do I need? While home insurance isn’t technically a requirement in Canada, it’s virtually impossible to secure funding without it. The exact amount of coverage you’ll need depends on the province you’re looking to live in, the size of your family, the age and quality of the home in question, and the replacement cost of your belongings. Generally, the more personal belongings and hard assets you have, the more insurance you’ll need.
2. What are my future plans and goals? Buying a home is generally part of a larger plan for one’s future. This plan may involve family, accumulating certain items, and laying down neighbourhood roots for the long haul. In cases where you’re looking to purchase your “forever home,” additional insurance coverage may be necessary to ensure your family’s financial safety.
3. What policy best suits me? There are many different coverage types available to you, from actual cash value, to replacement cost, to extended replacement coverage. Each represents a different level of risk for the insurer and therefore changes how much you’ll need to pay. Based on your goals, claims history, and location in Canada, it’s possible to choose a home insurance policy that best suits your needs.

How can I reduce my home insurance rates?

While picking your home insurance purely on matters of cost is not advisable, there’s certainly a financial benefit to reducing your rates and premiums. Some of the cost variables are fixed and aren’t easy to mitigate (things like neighbourhood, geography and climate, and the age of the home), however, there are still several things you can do to ensure your home is insured at the best possible rate. 

Getting an online quote

Some insurance providers incentivize potential customers by offering a discount on premiums using their online quoting tools. Institutions like Toronto Dominion and other large banks sometimes offer a discount just to initiate the quote estimation process. Be sure to check out multiple providers before making a decision purely off of an initial discount, though.

Improving home security

Thanks to the integration of smart technology into the practice of home security and monitoring, you can now take additional steps to protect your house against theft, fire, water damage, and other potential damages. The specifics of these rewarded cost savings will vary depending on your provider, the location of your home and its age, and other applicable factors. 

Purchasing a new-build

In addition to making you eligible for an increase in the CMHC’s first time buyer's incentive, purchasing a newly-built home also helps reduce your insurance rate. This is because the risk of expensive damage occurring is much less likely when the construction and appliances are still new. 

Increasing your deductible

It’s no secret that insurance providers are looking to reduce their exposure when covering the insured. A great way to maintain comprehensive coverage while also reducing your premiums is to increase your deductible. Although you’ll pay more out of pocket in the event of a claim, your ongoing costs will be lower, making this a great option for people who consider themselves low-risk.

Insuring multiple homes or bundling

If possible, covering multiple homes with the same provider will help reduce your insurance rates. Not everyone can do this, but for those looking to flip or rent a home in addition to owning their own residence, this is a great option. Bundling your home and auto insurance is another great way to reduce home insurance rates. 

These are just a few of the ways you can ensure that your home insurance is sufficient to meet the current and future needs of you and your family. You can check out government resources or contact your real estate experts to learn more about reducing insurance-related costs and getting home insurance discounts.