The Newcomer's Guide to Home Insurance in Canada

Home insurance can help protect you financially if something unexpected happens to your home or your belongings and, as a result, you suffer a loss that's covered by your policy.

Having home insurance is important because life is unpredictable, and unexpected events like fires, break-ins, extreme weather conditions, and even burst pipes can be costly. Whether it's repairing damage caused by a fire, replacing stolen items, or dealing with legal claims, without adequate home insurance coverage you might end up having to pay for these costs entirely on your own .

The purpose of home insurance is to help provide you with financial protection for accidental injuries you may be liable for, or for property damage caused by an event that's covered by your policy. When you purchase home insurance, you’ll pay a monthly or annual fee called a premium. The specific coverage you get, and the premium you pay, will depend on the policy you’ve purchased. Policies can vary widely, so it’s important to understand the details of what’s included.

Personal liability coverage is an essential part of home insurance. It helps protect you financially if you're sued because someone is accidentally injured on your property, or if you accidentally caused damage to someone else's property.

For example, if a visitor slips and injures themselves on your icy walkway, or if you're visiting a friend and you accidentally break their antique vase, your liability coverage may help you with any medical bills, repairs, or legal expenses you might be required to pay. And if you're a tenant, your liability coverage may protect you if you accidentally damage your landlord's property (subject to the conditions set out in your policy).

Whether you’re renting a place, or you own a house or condo unit, the importance of personal liability coverage simply can’t be overstated. Without it, you could potentially be left paying large, unexpected expenses entirely out-of-pocket as a result of a situation involving accidental injury or property damage.

A deductible is the amount of a claim that your insurer doesn't cover. Think of it as your share of the cost of a claim. But you won't need to pay the deductible separately — instead, once your insurer approves your claim, they'll reduce the payout by the amount of your deductible.

The deductible applies to every claim you make. This means that for smaller claims, the deductible might make up a bigger portion of the cost of your claim, while for larger claims, it might be a smaller percentage of the total claim.

Here’s an example: Let’s say you have a $1,500 deductible on your home insurance policy. An unfortunate incident involving a burst pipe in your home leaves you with a $50,000 repair bill, so you file a claim for this amount to help you fix the damage caused by the burst pipe. Once your insurer approves your claim, they’ll pay $48,500, which is the amount of your claim minus your deductible of $1,500.

But what if the damage is less, so the cost of the repairs is only $25,000? In that case, your insurer will settle your claim with a payout of $23,500 ($25,000 less your $1,500 deductible).

Typically, choosing a higher deductible will lower your premium, while a lower deductible usually does the opposite. But it’s important to pick a deductible amount that fits your budget and finances. So, don’t just think about how much you’d like to save on your premium—be sure to also consider how much you can afford to pay if you need to file a claim.

No, tenant insurance isn’t required by Canadian law. But many landlords require renters to purchase tenant insurance as part of the lease agreement. If insurance is a condition of your lease, you’ll need to provide proof of insurance before moving in.

But even if your landlord doesn’t require it, having tenant insurance is a wise move. Accidents can happen at any time, and without insurance, you’d be responsible for the full cost of replacing your items or covering legal fees and damages in the event of a lawsuit.

Tenant insurance helps provide financial protection if your personal belongings, such as furniture, electronics, and other items, are lost or damaged. It also gives you personal liability coverage.

But tenant insurance could also protect you in ways you might not expect. For example, the coverage for your personal belongings applies not just when your items are inside your home, but also when they’re temporarily away from your home, such as when you're travelling. And, subject to the conditions set out in your policy, your liability coverage might also help protect you if your actions unintentionally harm your landlord’s property.

Coverage for additional living expenses is another important feature offered by most tenant insurance policies. Here's how this coverage works: If a covered event (meaning an event, such as a burst pipe, that's covered by your policy) makes your rental unit unlivable, this coverage steps in to help you cover extra costs like temporary housing, meals, and certain other related expenses that might come up while your unit is being repaired.

If this is your first time renting a home in Canada, tenant insurance might be confusing. And, unfortunately, misunderstandings about what tenant insurance covers may leave you unprotected when something unexpected happens.

In this section, we’ll clear up some of the most common myths about tenant insurance to help you make informed decisions about protecting yourself as a renter.

Unfortunately, while your landlord’s insurance may cover the rental building itself, it won’t cover your personal belongings.

So, for example, if a pipe bursts, your landlord's policy may cover the cost of repairing the damage to the building, but it won't cover the costs of repairing or replacing your clothes, furniture, or electronics. This means, if you don’t have tenant insurance, you’ll have to pay out of pocket for everything you need repaired or replaced.

You might feel tenant insurance is only for people who own luxury items like expensive jewelry or all the latest gadgets, but it’s not just about insuring high-value items.

You might not have a lot of personal belongings right now, but here's where tenant insurance really shines: It provides you with personal liability coverage — not just in Canada but also internationally — so if an accident happens, you'll have this coverage no matter where you happen to be.

Liability coverage helps protect you financially if you're responsible for unintentionally damaging someone else's personal property or if someone injures themselves in your rental unit (for example, a guest tripping and falling while visiting you) and sues you for damages. Even a basic tenant insurance package with $25,000 to $35,000 in content coverage will typically give you a minimum of $1,000,000 in personal liability coverage.

As a newcomer to Canada, buying home insurance may feel like just one more thing you need to figure out — but it’s a lot easier than you might think. You can even obtain insurance quotes online.

Whether you’re renting or buying, the following tips can help you get started.

Here are some ways you can save on your home insurance without sacrificing the coverage you need:

• Obtain quotes and purchase online. Many insurers offer online discounts — plus, it’s convenient to shop online.
• Bundling. Purchasing both your home insurance and your auto insurance from the same insurance provider will often net you a discounted rate.
• Consider increasing your deductible. As mentioned previously, you’ll typically get a lower premium if you choose a higher deductible—but remember, a higher deductible means you’ll have to pay more when filing a claim.
• Install a home security system. At TD Insurance, for example, we offer a discount for installing a monitored home security system. The bonus? Your home security system could also help lower the risk of a break-in.
• Look for other discounts. Be sure to ask about other discounts too. And if you’re interested in a home insurance policy with TD Insurance, we offer over 30 ways to save on your home and auto insurance.

Buying home insurance in Canada is a straightforward process once you know what to expect. The key? Take your time, compare different options, and choose a policy that fits both your needs and your budget. Here’s how to get started:

1. Identify your coverage needs. Are you a tenant or do you own a house or a condo unit? Are there any special concerns that you’d like coverage for? Your answers to these questions will help you determine the coverage you need.
2. Comparison shop. Obtain quotes from multiple insurers so you can compare coverage options and prices. Don’t just look at the price, though: You also want to compare what’s covered and what isn’t.
3. Ask questions. Don’t hesitate to reach out to a licensed insurer to learn more about the coverage they offer.
4. Customize your policy. Create a plan that works for you by adding any optional coverage you need or adjusting the amount of your deductible.
5. Purchase your policy. You can usually purchase your policy by phone or online. At TD Insurance, for example, we make it easy for you to purchase your policy online, or you can contact us if you prefer to speak to someone directly.

In need of additional newcomer support? The Government of Canada offers a wealth of resources to help newcomers settle in smoothly, including:

• Government of Canada’s Newcomer Services
• Government of Canada: Find free newcomer services near you
• Language classes funded by the Government of Canada
• Renting a home in Canada
• Looking for a job in Canada
• Benefits, credits, and taxes for newcomers

Getting the right home insurance can help give you the financial protection you need, so you can focus on settling in and enjoying your new home and community. Whether you’re renting or buying, taking the time to understand your coverage needs and explore your options can make a big difference.

Interested in a TD Insurance home insurance policy? Get a quote online today!

¹ See, for example:

https://www.condoauthorityontario.ca/before-you-buy-or-rent-a-condo/fees-and-finances/insurance/;

https://www.ontario.ca/laws/statute/98c19#BK221