What is the average cost of home insurance in Ontario?

There are multiple factors that determine your average home insurance cost in Ontario. Consider your location, your home’s rebuild costs to home construction materials, proximity of hydrants, and alarm systems. You’ll pay more for home insurance in Ontario if your electrical is out-of-date or with high-end renovation upgrades. With that in mind, let’s look at the average cost of home insurance in Ontario.

What is the average home insurance cost in Ontario?

According to data from over 2,000 Ratehub.ca users that compared home insurance quotes recently, the average cost of home insurance in Ontario is $1,408 per year. Keep in mind that home insurance is calculated on an individualized basis – the most expensive premium for a policy was $9,503 while the cheapest premium was as low as $446.

In a version of this post from January 2021, the average cost of Ontario homeowners insurance was listed at about $1,250 a year, or just over a hundred bucks a month. Ontario tenants insurance is approximately $210 per year, or just shy of $20 per month, while Ontario condo owners paid on average about $345 per year for insurance. So with the new average being a near 13% increase, why are home insurance rates rising so quickly? 

The rising cost of home insurance rates 

Although there are many factors that can cause premiums to increase in the home insurance industry, one of the main reasons would be the rising cost of materials for home rebuilds. Because of high inflation rates and pandemic-related supply chain issues with building materials, such as lumber, the cost for insurers to rebuild homes has increased substantially, causing the price of home insurance to also increase. 

Another factor driving the rapid increase of home insurance rates is the surge of renovations, once again due to the pandemic. As homeowners had extra time to finish their basement or remodel their kitchen during lockdowns, the overall replacement cost of properties continued to increase, and home insurance premiums followed the same trend. 

Within the last year, residents across Canada have also suffered catastrophic losses due to climate change. According to an estimate from the Insurance Bureau of Canada, the flooding in British Columbia from November 2021 cost the insurance industry more than $450 million. And with expensive payouts on the rise, you can expect premiums to increase, even if your area isn’t directly impacted by the severe weather patterns. 

READ: The impact of climate change on your insurance

Average cost of home insurance in Ontario (by city)

Industry-wide variables have a direct impact on your home insurance premium, but there are also many individualized factors that impact your cost – the most notable factor being the city in which you live. According to data from Ratehub.ca users, here is the average cost of home insurance by city for ten of the most popular areas in Ontario. 

Average price of home insurance in Ontario (by value)

Although the market value of your home does not directly impact what you pay for home insurance, it can give you an idea of what you can expect to see in terms of costs. Normally it’s your home’s rebuild value you should consider when buying a home insurance policy. Buying home insurance for market value is a mistake because if your house burns down, you still own the property, so only insure for the rebuild value.

Not all homes (or real estate markets) are the same; nevertheless, as of January 2021, our home insurance calculator says a home valued at under $300,000 generally sees an average home insurance cost in Ontario of $711 a year. As the price of homes increases, so does the cost of home insurance by about 10% per $100,000. The final numbers, however, will be impacted by other factors.

Obviously, the more expensive the home is, the more you’ll pay for house insurance, but this isn’t a reflection of market value; it’s often a straight numbers game. A more expensive home means a more expensive home to rebuild or a home with more expensive attributes to protect. If your home falls in the $1 million to $1.2 million range, it’s reasonable to see the average home insurance cost in Ontario hit the $1,500 mark annually, and over $2,000 for homes in the $1.5 million to $5 million range.

What factors determine home insurance costs?

Different factors have different impacts on your home insurance costs, so we’ve listed the most important ones below.

Numerous factors have a strong impact on home insurance rates: province or location, neighbourhood (due to many influencers, like crime rates), electrical wiring, type of your piping and plumbing, house age and any completed renovations, any types of high-risk stoves (like wood stoves), and oil-based heaters.

Several factors impact insurance rates but not as significant as the previous list: the type of your house frame (like wood or concrete), distance from water sources (like sprinklers), any additional endorsements that you need (for jewellery, for example), size of insurance deductibles, and business conducted from home.

The last category lists the factors that sometimes can somewhat impact your home insurance rate: installed alarm monitoring, your family status, availability of a garden, and some other smaller items.

That should equip you with an initial insurance checklist that you can use next time when shopping for home insurance quotes.

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