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Home Insurance

Learn what home insurance covers in Canadian real estate, why it’s required for mortgages, and how it protects homeowners from major financial loss.

Home Insurance

May 10, 2025


What is Home Insurance?

Home insurance is a policy that protects homeowners from financial loss due to damage, theft, or liability related to their property or its contents.

Why Home Insurance Matters in Real Estate

In Canada, home insurance is a standard requirement for most mortgage lenders and a crucial safeguard for property owners. It provides coverage in cases such as:

  • Fire or natural disaster damage
  • Theft or vandalism
  • Liability for injuries on the property
  • Loss of use if the home becomes uninhabitable

Policies typically include dwelling coverage, personal property protection, and liability insurance. Optional add-ons—called riders — can cover specific risks like sewer backups, floods, or valuable items.

Premiums are influenced by factors like location, property type, age, replacement cost, and claims history. A higher deductible generally results in lower premiums.

Homeowners should shop around for the right policy, ensure they have adequate replacement coverage, and review terms annually. Proof of insurance is usually required before closing a real estate transaction.

Understanding home insurance ensures financial protection in emergencies and compliance with mortgage terms.

Example of Home Insurance

A homeowner in Ottawa experiences a kitchen fire that causes $30,000 in damage. Their home insurance policy covers the repair costs after the deductible is applied.

Key Takeaways

  • Protects against property damage, theft, and liability.
  • Required by most mortgage lenders.
  • Covers the structure, contents, and legal claims.
  • Customizable with riders for added protection.
  • Vital for financial security and risk management.

Related Terms

  • Mortgage Lender
  • Property Insurance
  • Title Insurance
  • Closing Costs
  • Replacement Value

Additional Terms

Rent Control

Rent control refers to government regulations that limit how much landlords can increase rent for residential tenants each year.. more

Receivership

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or. more

REALTOR

A REALTOR is a licensed real estate professional who is a member of the Canadian Real Estate Association (CREA) and adheres to its Code of Ethics and. more

Property Use History

Property use history refers to the documented past uses, functions, and occupancy of a property, which may affect environmental risk, zoning, or. more

Property Management

Property management is the oversight and administration of real estate assets on behalf of the owner, covering leasing, maintenance, financial. more

Property Maintenance

Property maintenance refers to the ongoing upkeep, repair, and management of a building or land to preserve its safety, functionality, and appearance.. more

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