Home insurance in Alberta
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How can you lower your home insurance costs?
A quick guide to saving on one of the most important investments you'll make.
When it comes to home insurance, you can save money on your premium several ways while making your house safer.
Costs to reconstruct
- If you’re buying an older home, consider the costs it would require if you wanted to rebuild the house, especially if the house will need to be rebuilt using modern materials and different construction methods. A house near Dunvegan may cost you more to rebuild than what you paid for it.
Increasing your deductible
Bring down your premium by increasing your deductible. This could save you money in the long run, especially if you don’t make very many claims on your home insurance.
Keep up to date with your home renovations
Maintain your home by keeping up to date with regular repairs and renovations. The major points of concern are your indoor plumbing, your roof, your electrical systems and your house's foundation. Let your insurer know what renovations have been done to the home recently.
Consider bundling your insurance
Try bundling home and car insurance using the same insurer. They may offer you a discount for more of your business.
Install an alarm system
Consider installing a home alarm system. There has been a uptick in crime within Alberta since 2017 with the Crime Severity Index going up by 4.9 percent. An alarm system proves to your insurer that you’re taking active steps to protect your home and they’ll offer you a discount on your coverage for doing so.
Winterproof your home
Prepare your home for the winter season. Alberta's winters, although beautiful, can wreak havoc upon your property if you don't prepare yourself. Install door sweeps on all your home's entrances to ensure there are no drafts, salt and plow your driveway and front steps, ensure that your roof is in good condition to avoid the risk of any leaks in the spring. Also make sure that your indoor heating is working correctly.
6 things you need to know about home insurance in Alberta
1 - Is home insurance mandatory in Alberta?
The short answer: No. At least not technically. Much like the rest of Canada, there’s no legal requirement for you to insure your home, unlike car insurance.
That being said, your lender will more than likely going to require you to apply for home insurance in order to approve you for a mortgage. So unless you plan on buying your house with cash in hand, home insurance is something you’ll need to look into. It should be seen as a way of protecting one of the biggest investments you’ll ever make and ensure that you won’t be set back financially should anything ever happen.
2 - What does home insurance cover in Alberta?
A home insurance policy covers three facets.
Arguably, the most important is your personal liability. If ever an accident were to occur on your property and someone got injured or killed, your home insurance would cover you for any medical bills and expenses that may stem from the incident. Consider home insurance not only as something to protect yourself, but as a method of ensuring your guests are cared for if ever they got hurt on your property.
The second is the structure itself. When you put your hard-earned money towards something this large, it’s nice to know you won’t have to worry about losing your investment to a natural disaster, such as a forest fire or any other unforeseen risks. When buying home insurance coverage, consider the scenario of a total loss where you have to rebuild the house from the ground up. If the structure is older and requires newer materials to be up-to-code, you may want to insure it for the cost it would require to rebuild it. Talk to your insurance agent or broker to see what your best coverage options are.
The third is the contents of your home. Your furniture, your wardrobe, your appliances, and whatever’s under your roof and within your four walls. Generally speaking, if it’s within your home and it gets damaged by a covered incident, it falls under the scope of your home insurance policy. Higher value items, however, may require a separate policy.
Your home contains a lifetime’s worth of physical objects. Having to start from scratch is something nobody should have to endure.
3 - What possessions are NOT covered under home insurance in Alberta?
Certain high value items, such as jewelry, art and any objects of value require a separate policy. Your policy protects you from covered risks such as a home invasion or an electrical fire. But what if your handcrafted saddle you got from the Calgary Stampede gets lost while moving? This is not a covered risk. Consult your policy to ensure your valuables are protected and talk to your insurance broker or agent. Consider taking out a separate specific policy to properly protect them.
4 - Am I covered by home insurance in the event of a wildfire?
With the memories of the Fort McMurray fires and the destruction they brought still fresh in people’s minds, many Albertans wonder if their homes are covered if such an event were to happen to them. In view of the fact that fire coverage is a covered risk in a basic home insurance policy, the short answer is yes.
This however, will not apply to other natural disasters such as floods or earthquakes, which have separate coverage policies. When purchasing and applying for insurance on your home, if you are located within a zone designated as at-risk for wildfires, such as Parsons Creek or Beacon Hill, your premiums may increase because of it.
It’s important to discuss these risks with your insurance agent before agreeing on a home insurance policy.
5 - Should I get home insurance before closing?
First things first, if you are selling your home do not cancel your current home insurance until you have heard that the deal has closed. If you’re moving out from the house and suspect it will remain unoccupied for longer than 30 days, contact your insurance company to give them a heads up that the property will be vacant. This ensures that you remain covered until the property is claimed by the new owners and avoid any unnecessary risks.
If you just bought your house, make sure you have your mortgage and home insurance in place well in advance of closing day, as your insurer will want to inspect the new home themselves to give you a quote on a rate. This protects both you and the lender in the event that there’s a fire or any risk that leads to the loss of the house before you even take possession of it.
6 - What is Mortgage Insurance?
Mortgage insurance is required when your down payment on your home is less than 20%. It insures the lender against the risk of a default by you, the homeowner. This type of insurance is sold through the Canada Mortgage and Housing Corporation (the CMHC),a Crown corporation of the Government of Canada.