MUST READ: Hale Muskoka Is Going All-Season With Multi-Pronged Expansion

Insurance

Explore how insurance works in Canadian real estate — what types exist, why they’re required, and how they protect buyers, lenders, and homeowners.

Insurance

May 22, 2025


What is Insurance?

In real estate, insurance refers to coverage that protects homeowners, lenders, and investors from financial loss due to property damage, liability claims, or other risks.

Why Insurance Matters in Real Estate

In Canadian real estate, insurance is essential for mitigating risk and meeting legal or mortgage lender requirements. Key types include:

Homebuyers must show proof of insurance before closing, and policy limits, deductibles, and exclusions vary.

Understanding insurance allows homeowners and buyers to properly assess risk, select appropriate coverage, and protect their property investment.

Example of Insurance in Action

The buyer provides proof of home insurance with $1 million in liability coverage as a condition of their mortgage approval.

Key Takeaways

  • Provides financial protection from real estate risks.
  • Required by lenders before closing.
  • Includes multiple coverage types.
  • Essential for all property owners.
  • Policy details must be reviewed carefully.

Related Terms

  • Home Insurance
  • Title Insurance
  • Mortgage Insurance
  • Liability Coverage
  • Coverage Limit

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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