Whether you’re a first-time homeowner or you’ve owned your home in Toronto for years, it can be challenging to understand the ins and outs of home insurance. With so many coverage options, risk factors affecting premiums, and different insurance providers, you may feel too overwhelmed to decide what’s right for you.
Here, learn all about the basics of getting home insurance in Toronto, why you need it, and the different types of coverage available. Discover factors that can impact your home insurance premiums and how to save money on your policy.
Why Do I Need Home Insurance in Toronto?
Home insurance isn’t mandatory in Toronto. However, it’s strongly encouraged that you get a policy because of these reasons:
How Does Home Insurance in Toronto Work?
As with other insurance products like tenant insurance or condo insurance, Toronto home insurance gives you financial coverage for your home in the event of certain unforeseen events. By purchasing a home insurance policy, you can file a claim that allows you to handle the cost of damage or losses covered under your policy terms.
There are three types of home insurance policies that you can buy in Toronto. Here’s a basic overview of each type:
What Is Not Included in a Typical Home Insurance Policy?
Even if you’ve opted for a highly comprehensive home insurance policy, there are some risks that insurers explicitly don’t include as a covered peril. These are called “exclusions” by home insurers.
Here are the most common home insurance exclusions:
This is by no means an exclusive list of risks typically excluded from a home insurance policy in Toronto. Talk to your home insurance provider to see what’s covered by your policy in case of loss or damage.
How Much Does Home Insurance in Toronto Usually Cost?
It’s hard to give a definitive answer to the typical cost of home insurance in Toronto, as your quotes are affected by factors like your home’s age and value, your policy type, and your location. The cost also differs between home insurance companies as each one has different methods for assessing risks and costs of coverage. This is why premiums differ between providers.
Expect to pay a premium within a range of $700 to $2,000 annually for Toronto home insurance. On average, Toronto home insurance costs $1,250 annually, which is lower than the average Ontario home insurance rate.
Why Are Toronto Home Insurance Rates so Expensive?
There are three factors that may be driving up Toronto home insurance rates. Here’s a quick explanation of why these things make premiums higher in Toronto:
- Greater number of older properties: Most homes in Toronto are quite old, so it’s more likely that they have older systems for heating, plumbing, and electricity. This increases your likelihood of filing a claim for a fire or flood.
- Higher real estate values: Real estate prices indirectly affect home insurance premiums. As home values go up, so do the cost of rebuilding and the amount of coverage you’ll need from a policy.
- Housing density: Toronto is densely populated, and most of its homes are connected houses or apartments with very little space between units. This increases the risk of spreading fires between homes.
What Determines the Cost of Home Insurance in Toronto?
The cost of home insurance in Toronto varies depending on several considerations, such as your postal code, your property type, and even your credit score. Here are some of the different cost factors for home insurance in Toronto:
What Risks Affect Homeowners in Toronto?
Many homeowners in Canada are affected by similar risks. However, there are some specific risks which Toronto homeowners should keep an eye on, and these are:
Does Where You Live in Toronto Affect Your Home Insurance?
Yes, where you live in Toronto affects your home insurance. Certain areas pose higher risks for different perils and natural disasters, leading to increased chances of filing claims. As a result, different areas may have varying home insurance quotes for homes of similar size, value, and condition.
For example, Toronto’s Danforth-Greektown area is known as one of the city’s safer and more family-friendly neighbourhoods, so a home insurer may consider it less likely that you’ll file a claim. On the other hand, living in bustling Moss Park near the Downtown Core may get you higher quotes because of its historically high property crime rates. Living in densely populated neighbourhoods like Queens Quay and King West may raise concerns for your insurer about the risk of spreading fires in clustered homes.
Compare quotes using MyChoice to see how much home insurance costs in your Toronto neighbourhood. This will help you find the most competitive quotes for your area so you can find the best deal no matter where you live.
Census Data: Housing Data in Toronto
Curious about the average Toronto home’s age, condition, and type? Here’s a simple overview of Toronto housing based on the 2021 Census of Population:
Type of Occupied Dwelling
Nearly half (46.7%) of Toronto’s occupied dwellings are apartments in a building that has five or more storeys. Single-detached houses trail at a distant second, comprising 23.3% of all occupied Toronto dwellings.
Owner vs Renter Stats/Condo vs Non-Condo Owners
There’s a near-even split between homeowners and renters in Toronto. 51.9% of Toronto homes are owned, with 48.1% rented. 30.4% of owned homes are part of a condominium development in Toronto, while 69.6% are not.
Private Dwellings by Period of Construction: New or Older Homes?
Most of Toronto’s private dwellings are older buildings, with 29.3% of homes constructed in or before 1960 and 28.8% of homes constructed between 1961 to 1980. Only 7.3% of Toronto homes were built from 2016 to May 2021.
Major Repairs or Just Maintenance Needed?
Most Toronto homes need only regular maintenance and minor repairs (93.6%). Only 6.4% of Toronto’s private dwellings need major repairs.
How You Can Get Cheap Home Insurance in Toronto
If you’re trying to save money on your preferred home insurance coverage, here are some important steps to take:
Who Provides Home Insurance Quotes in Toronto?
There are different ways that you can get a home insurance quote in Toronto. Here are the four providers that you can use or contact for home insurance rates:
FAQs About Home Insurance in Toronto
Is home insurance in Toronto mandatory?
No, home insurance in Toronto is not mandatory. However, you should still consider getting home insurance to cover your house and belongings. A home insurance policy can give you the funds you need to repair or rebuild your home after an insured event causes loss or damage.
What is not covered by a typical Toronto home insurance plan?
The following are typically not covered by a Toronto home insurance plan:
Flooding: Flooding is a separate add-on.
Earthquakes: This risk is typically not covered, but you may opt to get an earthquake risk add-on.
Wear and tear: Damage or destruction caused by improper home maintenance won’t be covered.
Tenant damage: You’ll need separate coverage if you plan to use your home for short-term rentals.
Insect damage: Most insurers consider this a preventable risk and won’t cover it.
Mortgage or property taxes: These expenses are excluded as they’re unrelated to your policy.
Vacant dwelling: Leaving your home vacant for an extended period may void your policy.
Mould: Only mould caused by an insured peril will be covered by your policy.
Criminal activities: Home insurance doesn’t cover damage due to criminal activity conducted in your home, such as fraud.
Home business activities: Home businesses need to get separate home-based business insurance.
Can you cancel home insurance in Toronto?
Yes, you can cancel home insurance in Toronto. Note that cancelling your home insurance before its expiry may cause you to incur penalties and cancellation charges. That said, switching to a more affordable home insurer can offset the costs of cancelling your old policy.
Check your policy’s terms and conditions first to find out how to cancel your policy and what financial consequences to expect. Most home insurance companies will need a written notice of cancellation either physically mailed or emailed to them to formally start the step.
What factors aren’t used to calculate Toronto home insurance rates?
These are some of the factors that companies typically won’t use to calculate Toronto home insurance rates:
Your age
Your sex
Your race
Occupation (unless you regularly work from home, as some insurers may increase your quotes)
Some factors you may never even have considered can impact your rates, such as your marital status and credit score. Talk to your insurance company to find out more about what can increase or decrease your insurance quotes.
How do Toronto home insurance claims work?
Here’s how Toronto home insurance claims generally work, step by step:
1. Report the damage or loss: Inform your insurer about the loss or damage to file your claims. Include all relevant evidence, such as detailed descriptions of the event, photographs, and videos.
2. Evaluation: An adjuster from your home insurer will schedule a visit to assess the extent and value of the damage or destruction.
3. Approval or denial: After evaluating your documents and inspecting the damage, your insurer will either approve or deny your claim. If approved, they will offer a settlement amount.
4. Claim resolution: You can accept your settlement or negotiate with your insurer. In some instances, you may also file a dispute with the Financial Services Regulatory Authority of Ontario (FSRA).
Do Toronto real estate prices affect the cost of home insurance?
Yes, Toronto real estate prices affect the cost of home insurance. While real estate prices aren’t used as a factor for calculating your home insurance premiums, they may indirectly affect the cost of coverage because they affect the cost of rebuilding or repairing a home that’s been damaged or destroyed.
Because higher real estate prices make the cost of rebuilding higher, this affects the amount of coverage you’ll need in a home insurance policy. Consequently, higher real estate prices tend to increase home insurance costs.
Do I need home insurance in Toronto for Airbnb?
Yes, you need home insurance in Toronto if you plan to use your house for short-term rentals on Airbnb. Getting home insurance isn’t mandatory and Airbnb offers very limited host protection insurance.
For peace of mind, getting home insurance for short-term rentals can protect your home. Notify your insurer if you plan to use your home as an Airbnb to see how much additional protection will cost. Renting your home out without informing them may void your policy.
Are Toronto home insurance fees tax-deductible?
Generally, Toronto home insurance fees aren’t deductible for personal residences. However, there are some instances where your home insurance fees may be tax-deductible, such as if your home is a rental property or used for business purposes. Consult a tax professional to see if you’re eligible for any deductions connected to your Toronto home insurance fees.