Average Cost Of Home Insurance In Ontario

How much does home insurance cost in Ontario?

Buying a house in Ontario means you also need to think about getting home insurance. Whether you live in the busy city of Toronto, the quiet areas of Muskoka, or the historic city of Ottawa, the price for insuring your home can be very different depending on where you live in the province.

There are many reasons why insurance companies charge different amounts, such as the risk of natural disasters or the crime rate in your neighbourhood. But don’t worry—we’re here to help you understand how much you might pay for home insurance in Ontario, what affects these costs, and how you can start saving today on your home insurance costs.

What is the average cost of home insurance in Ontario?

In Ontario, as of 2023, the average home insurance costs $1,250 annually for home insurance or a little more than $104 every month. But, depending on how much your home is worth and where it’s located, your yearly cost could be anywhere from $1,000 to more than $2,500.

However, the price you pay for your home insurance premiums is based on your own situation. Things like the type of coverage you choose, how much coverage you want, any extra protections you add, and other choices you make about your insurance will also affect how much it costs.

What determines home insurance costs in Ontario?

The cost of Ontario home insurance depends on many different things. When insurance companies look at a house, they think about all the factors that could affect how likely it is that something might go wrong and how much it would cost to fix it. Here’s a look at what factors affect the cost of your homeowners’ insurance:

Where your home is

If your house is in an area that gets a lot of floods or has a higher chance of natural disasters, or if it’s in a place with more crime, you might have to pay more for insurance because there’s a bigger chance something might happen to your home.

How much your home costs to rebuild

If your house would be expensive to rebuild, maybe because it’s big or made with expensive materials, your insurance will probably cost more. This isn’t about how much you could sell your house for but how much it would take to build it again (rebuild value) from scratch.

What your insurance covers

More basic insurance plans are cheaper than ones that cover more things. If you add extra protection for stuff like water damage, sewer backup, or earthquakes, or if you want a guaranteed replacement cost policy that states everything will be replaced no matter the cost, your home insurance premium will cost more.

Your deductible

This is the amount you agree to pay out of your pocket if something happens before the insurance pays the rest. Choosing to pay more yourself if something happens (a higher deductible) usually means you’ll pay less for insurance every year. It’s a form of risk-sharing that can be beneficial for both the insurance company and the policyholder.

Your past insurance claims

If you’ve submitted an insurance claim before, they might think you’re more likely to do so again, which could make your insurance cost go up.

How old your home is, and what condition it’s in

Older houses or houses that aren’t in great shape might cost more to insure because they’re more likely to need repairs. Original materials can be harder to find or more expensive to replace in older homes. As such, newer homes with recent updates to the roof, electrical wiring, and plumbing are seen as lower risks.

Home safety features

If you have things like home security systems or smoke detectors, or if you’ve updated your home’s wiring or plumbing to make it safer, you might pay less for insurance. These features and updates lower the risk of damage or loss.

Your credit score

Sometimes, insurance companies look at how you handle your money to help decide how much you should pay for insurance. People who are good with their money might also take better care of their homes.

Neighbourhood features

Living close to a fire station or having a fire hydrant nearby can lower your insurance because it means help can get to your house faster if there’s a fire, reducing damage.

Environmental and climate factors

Insurance companies are paying more attention to how the weather and climate can affect homes. If your house is in an area that’s getting more wildfires or intense storms because of climate changes, your insurance might cost more.

Why do average home insurance costs in Ontario keep rising?

Home insurance costs in Ontario keep going up for several reasons, including weather changes and higher repair costs, making it more expensive for homeowners. While homeowners can’t control all these factors, knowing about them can help them make better decisions about their insurance needs. Here are some of the main reasons why the average home insurance cost in Ontario keeps increasing:

Higher costs for repairs

This is one of the biggest factors right now. The high costs of building materials due to supply chain issues and even higher labour costs are increasing the price of fixing or rebuilding homes. When it costs more to repair or rebuild homes, insurance companies need to charge more to ensure they can cover the claims.

Homes are worth more

As the value of houses goes up, so does the cost of insuring them. Homes today have more high-tech appliances and systems, like smart home technologies, which are expensive to fix or replace if they break or get damaged. Insurance is designed to cover the cost of rebuilding the house if it’s completely destroyed, so insurance companies need to raise their prices to make up for the increase in real estate costs.

Weather changes

With the climate changing, Ontario is seeing more extreme weather like floods, wildfires, and intense storms. These events cause a lot of damage, leading to more insurance claims, which can be costly. This makes insurance companies raise their prices to cover these costs.

Urbanization and aging infrastructure

As more people move into cities and build homes, reducing the ground’s ability to absorb water and increasing runoff, the chance of water damage goes up. Many of these areas have old water and sewer systems that aren’t as good at handling heavy rains or melting snow, leading to more water damage and flooding in homes. This means more claims, which can push up insurance prices.

Legal and medical costs are up

The money insurance companies might have to pay for legal fees and medical treatments have also gone up. This affects the liability portion of your home insurance that covers you if someone gets hurt on your property, leading to higher insurance costs to cover these possible claims.

Market conditions and investment returns

Insurance companies invest the money they receive from premiums to help make more money to cover future claims. How well these investments do can affect the company’s finances. If they aren’t making as much money from investments, they might charge more for insurance to make sure they have enough money for future claims.

What does Ontario home insurance coverage include?

Home insurance in Ontario helps protect your home and belongings if something unexpected happens. Here’s a closer look at what homeowners often include in their home insurance policy:

Dwelling Coverage

This is the main part of a home insurance policy. This covers the cost of fixing or rebuilding your house if it gets damaged by things like fires, storms, hail, theft, or vandalism. It includes the main building and anything attached to it, such as a garage or a deck.

Contents Coverage

This covers the stuff you have in your home, like TVs, furniture, clothes, and appliances. If these items are stolen or damaged, your insurance can help pay to replace or repair them. However, if you have high-priced items, like expensive jewelry or art, you might need extra coverage for those.

Liability Protection

If someone gets hurt on your property or if you accidentally damage someone else’s property, this part helps cover legal costs and any money you might have to pay them. It’s essential because it protects you from having to pay out of pocket if you’re found at fault for an accident.

Detached Private Structures

If you have other buildings on your property, like a shed or a detached garage, this coverage helps pay to fix or replace them if they’re damaged by covered risks.

Additional Living Expenses (ALE)

If your home is damaged badly and you can’t live there while it’s being fixed, this coverage helps pay for things like hotel stays and meals out, so you’re not stuck with those extra costs.

You can also customize your policy with add-ons or endorsements for things that a standard policy doesn’t include. This could include protection from flood damage, sewer backup damage, or even earthquakes. You can also add coverage for very valuable items that are worth more than the standard coverage limits.

Who has the cheapest home insurance in Ontario?

Finding the cheapest home insurance in Ontario depends a lot on where your house is, what it’s like, and your own history with insurance. Generally, places that are less crowded and have fewer problems like natural disasters or theft might have cheaper insurance.

To get the best price, it’s a good idea to compare offers from different insurance companies. Each company has its own way of deciding prices, so you might find a big difference in cost for the same type of protection if you shop around. You can use online tools that compare prices or talk to insurance brokers who can help you look at different options.

Remember, going for the cheapest insurance may not always be the best choice. You want to make sure your insurance covers everything you need. If you try to save money by cutting back on protection, it could end up costing you more if something happens and you’re not fully covered.

How to save money on your home insurance costs

Saving money on home insurance means being smart about how you choose and manage your policy. Here are some tips to help you cut costs without cutting corners on protection:

Shop around

Don’t just go with the first insurance offer you get. Compare prices and coverage from different companies to find the best deal.

Bundle your policies

If you get your home and car insurance from the same company, they often give you a discount.

Choose a higher deductible

The deductible is what you pay out of pocket before insurance starts paying. If you can afford to pay more in case of an issue, you can lower your monthly payments by choosing a higher deductible.

Handle small repairs yourself

If you claim a lot of small damages, your insurance cost might go up. Sometimes, it’s cheaper to fix small issues yourself.

Ask about discounts

Insurance companies give discounts for things like having smoke alarms and security systems or for home improvements that lower your risk of damage or theft. Always ask about ways to save.

Conclusion

Determining the cost of home insurance in Ontario means looking at lots of different things, like where your house is, how big it is, what kind of insurance plan you pick, and your history with insurance claims. Even though we talked about an average cost, the truth is everyone’s premiums can be really different. The best advice is to shop around—check prices from a bunch of insurance companies to find the best deal that gives you the coverage you need.