What’s The Average Cost of Home Insurance in Ontario?

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

Updated on November 21, 2024

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

Updated November 21, 2024

Visit author page

3 minute read

Article Contents

Home insurance provides Ontario homeowners with much-needed resources to cover repair and rebuilding costs in case of damage or loss. With the rise of extreme weather events causing significant damage in the province, having a home insurance policy can give you peace of mind. However, home insurance premiums have steadily increased, making it harder for homeowners to get affordable coverage for their needs.

Ontario Home Insurance at a Glance

  • The average cost of home insurance in Ontario is $1,155, but the price varies per city. Home insurance premiums tend to be more expensive in bustling urban centers like Toronto and cheaper in quieter cities like Ottawa.
  • Home insurance isn’t mandatory in Ontario, but if you took out a mortgage on your home, your lender may require you to get coverage.
  • While you can choose a contractor or supplier for rebuilding or repairs, your insurer will be responsible for estimating the total damage. If your chosen contractor charges a higher price, you’ll have to shoulder the difference.

Learn more about Ontario home insurance in our guide, including reasons why home insurance has gone up in the province and tips for lowering your rates.

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What Factors Affect Your Home Insurance Premiums?

As mentioned, the cost of home insurance in Ontario varies widely depending on several factors, going as low as $700 or as high as over $2,000 per year.

Below are some of the factors impacting your home insurance premiums:

Location:

Homes in areas with high crime rates or prone to natural disasters like floods or wildfires tend to have higher premiums. Insurers also track the average type, number, and cost of claims in your area to determine the likelihood that you will make a claim – the higher the number and cost, the higher your rates.

Home characteristics:

Your home’s size, age, and condition affect rebuilding costs, which is a significant factor in calculating home insurance premiums. Older, larger homes with outdated electrical, plumbing, or heating systems usually have higher premiums.

Home renovations:

Renovations that improve your home’s safety such as hurricane roof straps and sump pumps can lower your rates. In contrast, certain additions like a swimming pool or kitchen upgrades bump up your rates because they increase the cost of repairs and rebuilding.

Claims history:

Insurance companies also look at your claims history to determine the likelihood that you’ll file a claim. The more recent claims you’ve filed, the more expensive your premiums.

Coverage limits and add-ons:

The amount and type of coverage you choose affects your rates. For example, broad home insurance is cheaper than comprehensive home insurance because it doesn’t offer as much coverage over your personal belongings. Getting additional coverage for risks like sewer backup also increases the cost.

Why Is The Average Home Insurance Cost in Ontario Going Up?

In the past few years, Ontario homeowners may have noted that the cost of home insurance has gone up. Here’s why premiums have been rising in the province:

The frequency and severity of natural disasters have risen in Canada. There were 15 CAT events in Canada in 2022 alone, with claims ranging from $35 million to $1 billion and primarily attributed to water damage. This has increased the number of claims that insurance companies have paid out and lowered their profitability, causing some insurers to increase their premiums. As these events are expected to occur more frequently, expect rates to continue to rise.

Construction materials have gone up in cost and labour is still in shortage today. These factors have made it more expensive to rebuild, repair, and renovate homes, which has caused claim costs and insurance premiums to go up.

Inflation for building supplies and labour rose during the COVID-19 pandemic as countries struggled to address supply chain issues. Inflation remains high and has caused building costs to increase, creating a domino effect that also increases home insurance costs.

How Can I Reduce My Average House Insurance Cost In Ontario?

Though average home insurance costs are rising, there are proactive measures that homeowners can take to reduce their premiums. Try these tips to keep the cost of coverage down:

Adjust your coverage:

Consider your needs and which perils pose the greatest risk in your area before settling on a coverage amount, so you can avoid overinsurance. For example, earthquake coverage may not be necessary for your Ontario home.

Bundle your home insurance with other policies:

Combining your home insurance with other policies like auto insurance from the same provider can get you substantial discounts.

Opt for higher deductibles:

Choosing a higher deductible can significantly reduce your yearly premiums.

Do regular home maintenance and inspections:

Regular home maintenance tasks like roof cleaning and updating old plumbing systems can prevent major damage or accidents that can lead to claims.

Install security devices:

Having security measures like alarms or security cameras deters thieves and vandals, which lowers your risk profile with insurers and may qualify you for discounts.

Shop around:

Compare rates from different providers using MyChoice to ensure you get the best rate for your desired coverage.

Key Advice from MyChoice

Consider getting additional coverage for overland flooding, especially if you live near a body of water. Its incidence and severity have risen in Ontario, leaving more homeowners vulnerable to damage or loss.

If you’re planning home renovations to make your house safer and lower your premiums, consider getting builder’s risk insurance. Also known as home construction insurance, this provides coverage in case your home or belongings get damaged or someone gets injured on your property during the construction process.

Check if your insurer has a list of preferred vendors and contractors who will respect the agreed-upon estimates and specifications. This will help you avoid paying out of pocket if your chosen contractor charges a higher price than the one estimated by your insurer.

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