Guide to High-Risk Home Insurance in Ontario

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Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated on January 16, 2024

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Picture of By <span>Matthew Roberts</span>
By Matthew Roberts

Updated January 16, 2024

Visit author page

4 minute read

Article Contents
Guide to High Risk Home Insurance in Ontario

Every home tells a story. From the rustic charm of a countryside cottage to the sleek design of a city apartment, homes in Ontario vary widely. But while their aesthetics differ, they all share a common need: protection. At MyChoice, we understand that some homes and homeowners face unique challenges when it comes to home insurance in Ontario. Enter the realm of high-risk home insurance in Ontario.

What is High-Risk Home Insurance in Ontario?

High-risk home insurance, sometimes called non-standard home insurance, caters to properties or homeowners deemed “higher risk” than the average. Various factors, which we’ll delve into shortly, can label a property or its owner as high risk. If you find yourself in this category, it’s essential to understand your options and work towards reducing your risk profile. This not only helps in securing better insurance rates but also ensures broader coverage availability in the future.

Worsening Housing Conditions in Ontario

In Ontario, while a significant portion of households live in acceptable housing conditions, there has been a growing concern over the quality and state of housing, especially in the affordable segment. Much of the province’s housing stock, particularly the most affordable options like rental and government-subsidized housing, is aging, with many units being 40 years old or older. This aging infrastructure puts these dwellings at risk of deterioration due to their poor condition. Specifically, 6% of Ontario households reported that their dwelling required major repairs in 2016. This percentage increases for renter households, with 8.7% indicating the need for significant repairs. The situation is even more pronounced for renter households in subsidized housing, where 11.1% reported their homes as poor. These statistics underscore the pressing need for renovations and improvements in Ontario’s housing sector to ensure its residents’ safe and adequate living conditions.

Factors Influencing Your Home Insurance Risk Level

Several elements can elevate the risk associated with insuring a property. Some of the most common include:

  • Age and Condition of the Home: Heritage homes, with their unique architecture and materials, can be more susceptible to damage. Their repair costs can be significantly higher due to the need for specialized materials and craftsmanship. Regular maintenance, especially for older homes, is crucial.
  • Roof’s Age and Condition: A well-maintained roof is essential. Older roofs, especially those showing wear and tear, are more prone to damage from various elements, including weather and animals.
  • Heating, Electrical, and Plumbing Systems: These systems’ type, age, and condition can significantly influence your home’s risk profile and encourage you to get high-risk home insurance. For instance, homes with knob and tube wiring might be viewed as higher risk.
  • Insurance Claims and Payment History: Your personal history as a policyholder matters. Frequent claims or a history of missed payments can label you as high risk. Insurance companies often hesitate to offer standard policies to those with multiple claims in a short timeframe or those with a history of policy cancellations due to non-payment.
Factors Influencing Your Home Insurance Risk Level

Why Might Your Home Be Considered High-Risk?

Your home could be considered high-risk based on age, style, heating, and occupancy. Some vacation homes are also deemed high-risk. For instance:

  • Older Homes: Homes that require renovations, especially those with dated building materials like knob and tube wiring or galvanized steel plumbing, can be classified as high risk. As you make upgrades, you can potentially reduce your premiums.
  • Rural Property: Homes in rural areas might be more exposed to natural disasters such as high winds, forest fires, and tornados. The absence of nearby fire hydrants and reliance on well water can also elevate the risk.
  • Multiple Mortgages: Insurance companies often view homes with more than two mortgages as high risk.
  • Vacant Dwellings: A property without inhabitants or no one living there is considered riskier because no one monitors the property. Homeowners with vacant properties should be aware of Ontario’s Vacant Home Tax. Rental properties with absentee landlords might also be classified similarly.

Navigating High-Risk Home Insurance in Ontario

While high-risk home insurance tends to be pricier, it doesn’t mean you’re left without options. Partnering with a reputable insurance brokerage can provide access to multiple quotes, ensuring you get the best possible deal. At MyChoice, we’re dedicated to helping homeowners find the right coverage at the right price. To get a broader understanding of home insurance costs in Ontario, check out our detailed guide on how much home insurance costs in Ontario.

Climate Change and The Implications to the Insurance Market

Globally, from 2000 to 2019, a staggering 7,438 disaster events were recorded, resulting in approximately 1.23 million lives lost and affecting 4 billion people. These events led to economic losses amounting to $US 2.97 trillion. In Canada, the increasing frequency and severity of extreme weather events and natural catastrophes, driven by climate change, pose significant challenges to homeowners and renters. These challenges range from financial losses and forced relocations to more dire consequences such as injury and death. Particularly concerning is the rise in uninsured economic losses stemming from climate-related disasters. This strains individual households, especially those already in vulnerable situations, and also exerts pressure on public finances as governments scramble to provide emergency funds.

Recognizing the escalating risks, Canada’s a growing momentum, spearheaded by institutions like the Canada Mortgage and Housing Corporation (CMHC), to explore high-risk home insurance-based solutions. These solutions aim to mitigate the impacts of climate change, incentivize better risk mitigation, and reduce the financial burden on the government. By drawing lessons from international catastrophe risk mitigation and insurance models, such as those in the UK, France, and Japan, Canada is poised to develop a robust system that ensures housing remains affordable, resilient, and climate-compatible. This approach not only safeguards the well-being of its residents but also ensures the stability of the nation’s housing finance system in the face of unpredictable climatic events.

Tips to Lower Your Home Insurance Costs

If you’re labelled as high-risk, there are steps you can take to potentially reduce your premiums:

  • Yard Maintenance: Remove potential hazards like dead trees that could damage your home during a storm.
  • Safety and Security: Update smoke alarms, install secure doors and windows, and consider a monitored burglar alarm.
  • Roofing and Siding Upgrades: Invest in materials designed to make your home more weather-resistant.
  • Regular Maintenance: Inspect your home and address any maintenance or repair needs.
Tips to Lower Your Home Insurance Costs

The Bottom Line

Every homeowner in Ontario deserves peace of mind, regardless of their property’s age, location, or history. High-risk home insurance ensures that even those facing unique challenges can find the protection they need. At MyChoice, we’re here to guide you through the complexities of the home insurance world, ensuring you’re well-informed and well-covered.

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