How Much Does Home Insurance Cost in Ontario? A Comprehensive Guide

Your Comprehensive Guide to Home Insurance Costs in Ontario

When it comes to purchasing home insurance, you naturally want the best coverage available. After all, your home is your most important asset. As a responsible Ontario homeowner, you want to do everything you can to take care of it.

While insuring your home is required when you purchase your property, it can be helpful to know how its cost is calculated. In general, most insurance for homes in Ontario costs between $1,000 - $2,500 annually. But there are many factors that can influence this figure. For instance, the cost calculation of high-value homes is much higher than the provincial average.

To give you insight on what to expect from your home insurance costs, the team at Morison Insurance put together this helpful guide. In it, we breakdown all the various factors that can impact your residential home insurance costs.

How Are Home Insurance Costs in Ontario Calculated?

Residential property insurance rates in Ontario vary from location to location, and there are many other influences that impact its cost. Some of these factors may seem obvious, but there are many that surprise Ontario homeowners. While it's best practice to talk to a qualified insurance broker about your homeowners insurance premium, such as the expert team at Morison Insurance, the following guide should give you a general idea of what goes into calculating your homeowners insurance.

Where You Live

One of the biggest factors in determining your insurance rates in Ontario is where you live. The city and neighbourhood your home is located in greatly impacts your homeowners insurance rates. This is because your insurance company tracks information about the type, cost and number of claims in your neighbourhood or community. This information helps them understand your neighbourhood, and figure out the likelihood of future claims.

Home Insurance Costs in Rural Areas

Rural communities, acreages, farms and cottages are often further away from amenities that lower insurance premiums, such as fire hydrants, fire halls and police stations. For this reason, there are more risks associated with living in the country, often meaning home insurance costs can be more than living in an urban area.

Home Insurance Costs in Urban Areas

Different Ontario cities have different average insurance rates. While location isn't the only factor in establishing the average cost of residential property insurance, it’s still an important consideration. Even within popular Ontario cities, there will be variety in insurance costs based upon different communities. The breakdown of average insurance rates for homes in popular Ontario cities are included below:

CityApprox. Price (per year)
London$1,100 - $2,100
Oakville$1,000 - $2,000
Woodstock$700 - $1,700
Barrie$1,000 - $2,000
Ottawa$500 - $1,500
St. Catharines$800 - $1,800
Hamilton$1,200 - $2,200
Toronto$1,500 - $2,500

Proximity to Fire Station and Hydrants

The logic follows that the closer your home is to a fire station and/or fire hydrants, the quicker a fire will be put out and the less it will cost to repair your home. As mentioned above, this is particularly a concern in rural areas.

Crime Rates

Communities with high crime rates often have higher home insurance costs (and auto insurance premiums). The reason for this is that there is a higher risk of vandalism, break-ins and burglaries in crime-dense areas-increasing the likelihood you may need to make a claim.

Your Home's Replacement Costs

The rebuild value (also called replacement value) of your home is a key factor in determining how much dwelling coverage you need. It's important to note that rebuild value is not the same as resale value. Rather, replacement value includes the cost of materials and labour for rebuilding your home. It does not include the value of the property your home is built on. In a nutshell, replacement cost is how much you would have to spend to rebuild your home were it completely destroyed. There are a couple other factors that influence this rate:

Size

Naturally, the larger your home is, the more materials and labour would be needed to rebuild it. Subsequently, homes with greater square footage tend to have a higher annual premium.

Construction Materials

Does your home have special details and finishes, such as custom woodwork, historic floors or stained-glass windows? The cost of construction materials is a big factor in determining your Ontario home's rebuild costs. This is especially the case if you live in a highly customized, valuable or historic home.

Your Insurance Claim History

Insurance companies use past claims as a way to predict the likelihood of future claims. Therefore; the more claims you've made in the past, the higher your annual premium will be.

Your Home's Age

Usually, the older your home is, the higher its homeowners insurance premium will be. This is because older homes can have much higher replacement costs—especially if you live in a community where you're required to bring old buildings up to code after experiencing a loss. Also, older homes can have more issues than new builds—depending on the age and materials used in construction.

Age of Electrical Wiring

During the 1970s, it was popular to use aluminum wiring in most homes. While its use was discontinued quickly because it's considered a fire hazard, not all homes had their wiring replaced. Likewise, knob and tube wiring was a popular choice for homes built until around the 1940s. Many insurers won't cover homes with knob and tube wiring—even when it's working correctly—because it's also considered a fire hazard.

Age of Plumbing

Just like wiring, in the past there were different materials used for pipes and drains than what builders install in homes now. Typically, newer plumbing that is made out of copper or PVC (a variety of plastic) will get better insurance rates than other materials. For instance, old plumbing was often made out of lead, which is toxic, iron, which can rust and crack, and even clay, which deteriorates over time.

Age of Roof

An old roof is likely to increase your homeowners insurance rate. In general, your roof should not be more than 20-years-old—even if you live in a historic building. The train of thought is that your roof will have weathered many seasons and weather events—including severe weather events such as storms, tree damage and water damage. This wear-and-tear will degrade its integrity. Thus, the risk of damage increases, and so do your insurance rates.

High-Value Properties

Understandably, high-value properties usually cost more to insure than the average Ontario home. This is because high-value home insurance policies usually require more coverage. Generally, you should consider investing in high-value property insurance if your property is of high-value, includes valuable contents, and has unique customizations, features or heritage. As a rule of thumb, homes that would cost  $1 million or more to replace are considered high-value homes.

Benefits of choosing the hardworking brokers at Morison insurance to purchase your high-value property insurance policy include having a highly customized policy, greater flexibility with a range of coverage options and receiving specialized claims service. We can also provide personal property coverage and protection for detached structures, like sheds and pools.

Valuable Contents

Part of any standard homeowners insurance policy is protection for your personal property in the event of theft, fire or loss. However, if you have high-value items such as jewellery, collectibles or antiques, you may require additional protection to cover the cost of replacing said items. Naturally, this will increase the cost of your insurance rate.

Pools, Landscaping and Additional Structures

Outbuildings, additional structures and landscaping that add value to your property will increase your property’s insurance rate because of the additional property to insure. Likewise, the more attributes your property has, the greater the risk of an accident or further damage. For example, say you have costly landscaping that was vandalized, and you need to replace valuable trees and shrubs. It's important that you have adequate insurance coverage to repair/replace the damage.

Security Systems

Did you know that monitored home security systems can often reduce your insurance premiums? By installing a home alarm system, you decrease the chance of a robbery. This reduces the need to replace valuable items or repair damage to your home that may have occurred during the break-in. If you qualify for a home alarm insurance discount, which requires a monitored security system, you can receive between 10% and 15% off your premium.

Wood Stoves and Fireplaces

Wood burning stoves and fireplaces are a fire and carbon monoxide hazard if they're poorly maintained or improperly installed. This can make them difficult and costly to insure. Many insurance providers may need to inspect your wood stove or fireplace, and having one in your Ontario home can increase your insurance rate.

Home Business

Usage is another important consideration when estimating how much your insurance premiums for your home will be. For instance, if you run a home business you'll likely need additional coverage. Often, it's suggested that adding a home business floater to your policy is appropriate. This floater provides coverage for inventory, office equipment, and extends liability coverage to your business. While this added coverage means your insurance premium will increase, you're protected in case a disaster destroys your inventory, or a client sues after getting hurt at your place of business-such as slipping on ice as he or she arrives for an appointment.

Commercial Equipment and Property

Can you imagine how devastating it would be to lose all your inventory in a fire, or have costly tools stolen from your shed, and then not be properly covered? A standard homeowners insurance policy does not usually cover replacement costs for stolen or damaged commercial tools, equipment or property. Make sure you have the right add-on so your home business is adequately covered.

Short-Term Rentals

Do you rent your Ontario property while spending summers at the lake? Or perhaps you travel for work and lease your home through Airbnb? In either case, using your home for short-term rentals will increase your homeowners insurance cost. This is because there is more risk involved when third-parties stay in your home. While short-term rental services like Airbnb offer insurance programs, you may still wish to include additional coverage to be thoroughly protected. Also, you should confirm that your tenants have their own liability insurance.

Extra Coverage in Ontario: Additional Costs

There are many add-ons available to a standard Ontario residential property insurance policy. It's important to talk to your insurance broker about these additional coverages, as many homeowners don't realize the following are not necessarily covered by a basic home insurance policy.

  • Earthquake Insurance: Even though many parts of Ontario are in earthquake zones, earthquake damage isn't generally covered with a standard policy. The cost of this add-on varies depending on your proximity to an earthquake zone.
  • Sewer Back-up Insurance: While some kinds of water damage are flood damage are covered by an average homeowner insurance policy, sewer back-ups are not. The line of thought is that most sewer back-ups can be prevented with proper maintenance. But just in case, it's wise to add-on this coverage to your existing policy.
  • Overland Water Insurance: This is another type of water damage that is not necessarily covered by a basic insurance policy. Overland Water insurance protects against damage for overflowing rivers and lakes. Costs will vary depending on your home's risk level—for instance, how close you are to a flood zone.
  • Identity Theft Insurance: Did you know you can protect yourself from identity theft through your house's insurance policy? This endorsement helps you recuperate lost funds due to legal fees, lost wages and more.

Questions About Home Insurance, Costs, and Options? Call Morison Insurance Today!

As a locally operated, family-run business, Morison Insurance truly has our client's best interests at heart. We're dedicated to helping Ontario residents find the best homeowners insurance policy for their needs. Your safety and satisfaction is always our top priority, which is why we work hard to shop for the right coverage for your home.

To get a home insurance quote today, we invite you to give our friendly team a call at 1-800-463-8074. You can also get in touch by inquiring about a quote online.

This content is written by our Morison Insurance team. All information posted is merely for educational and informational purposes. It is not intended as a substitute for professional advice. Should you decide to act upon any information in this article, you do so at your own risk. While the information on this website has been verified to the best of our abilities, we cannot guarantee that there are no mistakes or errors.

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