Although home insurance is not mandatory by law in Canada, many lenders will require proof of insurance at the time of signing or renewing your mortgage. You may wish you could forgo this expense, but the truth is having home insurance protects you from having to dole out a large amount of money all at once, especially when it’s unexpected. If you’re looking to get insured, you should review and compare home insurance quotes from different insurers.
How much does home insurance cost?
The average cost of home insurance in Canada is $960 per year (equal to $80 per month), according to Ratehub.ca, an aggregator website. (Ratehub.ca is owned by Ratehub Inc., which also owns MoneySense.ca).
The cost of insurance can vary significantly from one province to another. For example, home owners in Ontario pay an average of $1,250 a year (or close to $105 per month) for coverage. That’s quite a bit more than in the Maritime provinces, but only slightly higher than in Saskatchewan. Meanwhile, in British Columbia, the average cost of home insurance is $924 per year.
“Home insurance premiums are based upon the likelihood of someone suffering a loss and how substantial that loss is likely to be,” explains Stefan Tirschler, product and underwriting manager at Square One Insurance Services in Vancouver.
Here’s an overview of the average cost of home insurance across every Canadian province, according to data from Ratehub.ca. (No data available for the Northwest Territories, Nunavut and Yukon.)
| Province | Average cost per year | Average cost per month |
|---|---|---|
| Alberta | $1,000 | $83 |
| British Columbia | $924 | $77 |
| Manitoba | $1,032 | $86 |
| New Brunswick | $781 | $65 |
| Newfoundland and Labrador | $780 | $65 |
| Nova Scotia | $782 | $65 |
| Ontario | $1,250 | $104 |
| Prince Edward Island | $781 | $65 |
| Quebec | $984 | $82 |
| Saskatchewan | $1,100 | $92 |
How home insurance premiums are calculated
How much you will pay for home insurance depends on several factors, including the specifics of your dwelling, your geographical location, the amount of coverage you need and who your insurer would be.
The bigger and more valuable your home, the higher your premiums will be. (It makes sense that it would cost more to insure a massive estate than a small townhome, right?) Home insurance coverage works the same whether you have a small house or a mansion. The difference is in the cost of replacing or fixing the home, so additional features, like a pool or a wood fireplace, can add to the cost.
Depending where you live, your home may be more susceptible to certain risks, such as weather-related damage—say, if you live near a coastline, where overland flood insurance is a good idea. This, too, will increase your premiums. Similarly, the age and nature of key components of your property, like the plumbing, electrical wiring and roof, can also affect your insurance rate.
