Home Insurance in Canada: What It Covers and How to Protect

Home insurance in Canada protects your house and the people who live in it from loss or damage. It typically covers your personal belongings, injuries to guests, and accidental damage you cause to someone else’s property. Having the right home insurance policy ensures you are both legally and financially protected when the unexpected happens. To explain the essentials, we spoke with Sonja Denobrega, vice president of personal insurance underwriting at Aviva Canada.

Types of home insurance coverage

In Canada, home insurance generally comes in three levels of coverage: comprehensive, broad, and basic. Each level determines what perils and losses are covered, and how much you pay in premiums.

• Comprehensive coverage — the most inclusive and typically the most expensive option. It covers sudden and accidental damage to the building and contents, plus liability protection, except for exclusions specifically listed in the policy.
• Broad coverage — similar to comprehensive but with more restrictions. Contents, for example, are often covered only for the named perils listed in the policy rather than for all unforeseen events.
• Basic coverage — covers only the named perils included in the policy, such as fire, theft and certain types of weather damage. It usually has the lowest premiums but can leave gaps in protection.

What does home insurance cover?

Home insurance protects against a range of perils — events that cause damage or loss. Commonly covered perils include:

• Fire and lightning
• Falling objects
• Theft and vandalism
• Wind and hail
• Damage from aircraft or vehicles
• Explosions and electrical surges
• Riots and smoke damage (excluding normal fireplace smoke)
• Water damage, subject to policy limits and specific exclusions

Most policies also cover personal property while temporarily away from the home — for example, belongings in your car or items you take while travelling. Liability protection is a key component: if someone is injured on your property or you accidentally damage another person’s property, liability coverage helps pay legal costs and settlements if you are sued. High-value items like jewellery, fine art or certain electronics may be subject to limits and could require scheduled or additional contents coverage for full protection.

What isn’t covered by home insurance?

A simple rule is that home insurance is designed to cover sudden, accidental events — not gradual wear and tear or damage that results from neglect. If a pipe bursts unexpectedly, resulting water damage may be covered. If a leak develops from long-term neglect or a known maintenance issue, the claim will likely be denied.

Water-related losses are often complex. Basic policy wording provides some coverage for water damage, but floods, overland flooding and sewer backups are frequently excluded unless you purchase specific endorsements or separate flood protection. It’s important to review your policy carefully so you understand which water perils are included and which require additional coverage.

What is an endorsement on a home insurance policy?

An endorsement (also called a rider or add-on) is extra coverage you add to your base policy to fill gaps or raise limits. Common endorsements include earthquake coverage, sewer backup protection, identity theft support, and scheduled personal property coverage for high-value items. Ask your broker or agent which endorsements make sense based on your home, belongings and where you live — the right add-ons can prevent costly out-of-pocket expenses later.

Steps to insure a new home

When you’re buying a home, securing insurance is a necessary step before your lender will release mortgage funds. Denobrega outlines these practical steps to obtain home insurance:

1. Start early once your offer is accepted. Lenders and lawyers need proof of insurance to complete the mortgage closing.
2. Contact a broker or insurer and tell them you’re purchasing a new home. Be ready to provide details such as the year the property was built, total square footage, number of storeys, roof condition and the types of wiring, plumbing and heating systems.
3. Your broker will estimate the home’s rebuild cost, which differs from market value because it reflects the cost to reconstruct the building itself, not the land value.
4. Review the quoted premium, including any recommended endorsements and applicable discounts. Understand your deductible and coverage limits.
5. Shop around to compare price and coverage. The cheapest policy may not provide the protection you need, so balance cost with the scope of coverage.
6. Once you select a policy, your broker or insurer will issue proof of insurance to your lawyer to ensure the transaction can close on time.

Choosing the right home insurance plan means understanding what’s covered, what’s excluded, and which endorsements you may need for complete protection. Review policies carefully and consult a qualified broker or agent to align coverage with your home, possessions and personal risk tolerance.