Homeowners insurance is an important part of your financial security net, and in many cases a requirement if you have a mortgage. But how much should you expect to pay for your coverage? Like many things about insurance, the answer is both simple and complicated. Let’s break it down for you.
The average homeowner’s insurance rate in Ontario
According to the JD Power & Associates 2018 Canada Home Insurance Study, the median annual Ontario homeowners insurance rate in 2018 was $1,284 ($107 per month). This compares to a low of $960 in Quebec and $1,200 in western provinces.
But using a median value for all of Ontario can be misleading as there are many factors that contribute to your homeowners premium.
You can view the average home insurance rate by city here, too.
Comparing Ontario’s average to the rest of Canada
According to insurEYE, the average monthly insurance cost for a home valued between $100,000 and $700,000 in Ontario is $74.50.
In Alberta, the average monthly premium is higher at $78. British Columbia’s average rate is the lowest at $69, and Quebec’s is $72.50.
It’s also common to see homes that are valued at over a million dollars these days, especially if you live in the Greater Toronto or Greater Vancouver areas. That’s why it’s important to know the average home insurance rates in your region.
Here are the average insurance premiums by province for homes valued between $700,000 and $1,500,000:
Average renter’s insurance rates across Canada
InsurEYE’s research also found that renters in Quebec pay the lowest premiums for home insurance, followed by Ontario, British Columbia, and Alberta.
According to this data, Quebec has the lowest insurance rates, and homeowners pay between 1.4 and 2.1 times more than renters for insurance.
You can take a look at the averages here.
|Province||Homeowner’s Annual Rate||Renters Annual Rate|
Renters insurance is typically expected to be cheaper than homeowners insurance because it doesn’t include the cost of repairing or replacing your house, which would likely be covered by your landlord’s insurance policy.
In contrast, a home’s replacement cost is closely connected to the price you’ll pay for homeowners insurance. In fact, it’s one of the most important factors in calculating home premiums.
It should be pointed out that replacement cost is different from the resale value of your home because it covers the cost of labour and materials needed to rebuild it, not the value of the entire property.
Replacement cost is literally the cost to rebuild your home as it stands today. A $1,000,000 dollar home in Toronto could have the same replacement cost as a $300,000 home in Sudbury.
The size and nature of the home also affects replacement cost. A large custom-built home with expensive features like plaster moldings and marble floors costs more to replace than a smaller home with a basic finishing.
Higher replacement costs do equate to higher rates, but it’s all relative when your home has marble floors.
There’s more to insurance than just price
Before you start looking for real estate opportunities in Quebec, keep in mind that the extent of your home insurance coverage could have a larger impact on the price you pay for insurance than where you live.
For example, B.C. residents are (on average) nine times more likely to purchase earthquake insurance than Quebec residents, even though some parts of Quebec are situated in earthquake zones as well.
Water damage protection is another kind of optional home insurance that raises an annual rate, but has become more important in recent years. Canadian insurance companies began offering overland flood insurance in 2015 because these natural occurrences have become so much more common.
Paying for something in the ballpark of $10 worth of flood insurance per month could cover your home for tens of thousands of dollars worth of flooding damage if an extreme weather event were to occur.
There’s also some variation in home insurance rates within any given province. Home insurance providers need to consider:
- Is the home located in a flood plain?
- Is the home in an earthquake zone or along a fault line?
- Do tornadoes touch down in the area with any consistency?
Location affects your average homeowners insurance rate in Ontario in a number of ways. Perhaps the factor with the highest impact is the fire protection in your area.
The distance of your home from the nearest fire hall and hydrant has a direct impact on the amount of damage a fire can cause before a fire department can respond.
A city fire department that responds to most fires in less than eight minutes and has access to unlimited amounts of water using nearby hydrants will see a better outcome than a rural fire department that takes 15 or more minutes to respond while carrying a limited amount of water in their truck.
Your home insurance rate reflects those differences, which is why it’s always important to get an accurate quote before buying a home!
Location also comes into play in areas such as the cost of local tradespeople and materials, and whether rebuilding on a site is likely to face new environmental regulations.
Credits and homeowners insurance in Ontario
Most insurers offer a variety of credits that homeowners can use to their advantage. This includes credits for having not made a recent claim.
You can also save money if you have installed a fire and burglary alarm. New homes are less likely to suffer water leaks and electrical issues, so there is often a credit for these dwellings. Ask your insurer what credits they offer.
It could reduce your premiums even lower than the average homeowner rate in Ontario, depending on where you live!
You’ll need an accurate (and guaranteed) rate before you commit to buying a home. Get yours in 3 minutes right here!