BREAKING: BoC Holds Interest Rate For Second Time In A Row

Insurance Appraisal

Learn what an insurance appraisal is in Canadian real estate, how it's calculated, and why it’s essential for setting proper property coverage limits.

Insurance Appraisal

May 22, 2025


What is an Insurance Appraisal?

An insurance appraisal is a professional valuation of a property used to determine the appropriate amount of insurance coverage needed for rebuilding or replacement in the event of a loss.

Why  Insurance Appraisals Matter in Real Estate

In Canadian real estate, insurance appraisals ensure homeowners, condo corporations, and lenders have accurate coverage based on the property's construction, age, features, and materials—not its market value

Key features include:
  • Reflects rebuilding cost (not resale value)
  • Conducted by certified appraisers
  • Required for condo reserve planning and lender underwriting

Outdated or missing appraisals can result in underinsurance, leaving property owners exposed to financial loss.

Understanding insurance appraisals helps property owners secure adequate protection and comply with legal and mortgage requirements.

Example of an Insurance Appraisal in Action

A condo board commissions an insurance appraisal to verify the replacement cost of the building for its annual policy renewal.

Key Takeaways

  • Determines rebuilding cost for insurance.
  • Used for residential and condo policies.
  • Conducted by certified professionals.
  • Different from market appraisals.
  • Prevents underinsurance.

Related Terms

  • Replacement Cost
  • Actual Cash Value
  • Home Insurance
  • Coverage Limit
  • Reserve Fund

Additional Terms

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