Your home insurance guide for first-time home buyers in Canada
5 minute read Published on Jan 19, 2026 by BrokerLink Communications
Buying your first home in Canada is one of the biggest investments you’ll make. From securing mortgage pre-approval to choosing the right neighbourhood to move into, there’s a lot you need to consider. But one essential step that often gets overlooked by first-time homebuyers is home insurance.
In today’s uncertain housing market, where property values fluctuate, and extreme weather events and natural disasters are on the rise, it’s essential for all homeowners to have a solid home insurance policy. According to the Insurance Bureau of Canada (IBC), severe weather caused over $8.5 billion in insured damage across Canada in 2024 alone. The total insured losses in 2024 are almost three times higher than those in 2023, and 12 times greater than the annual average of $701 million recorded between 2001 and 2010.
This guide is here to help first-time homebuyers feel confident and prepared. We’ll walk you through what information your insurance company or broker will need to provide a quote, the essential types of home insurance coverage, and recommendations for customizing your policy.
Common mistakes first-time buyers make with home insurance
In 2024, 55% of all home purchases in Canada were made by first-time buyers, according to the Canadian Mortgage and Housing Corporation (CMHC). Of these, 73% were among buyers aged 25 to 34. With so many people buying their first homes, it’s important to note that there’s a learning curve that comes with purchasing insurance for your new home. Here's a list of mistakes to avoid when purchasing your home insurance:
Misunderstanding purchase price vs. replacement cost
The first learning curve is understanding how much it would cost to rebuild your home. Many new homeowners confuse their purchase price with rebuild value, which can leave them dangerously underinsured. For example, one Albera couple insured their 1950s bungalow for what they paid, only to find out too late that replacing it would cost an additional $150,000 due to updated building codes and labour costs.
Not getting flood insurance
Skipping flood insurance is another big one. Standard home insurance doesn’t cover overland flooding, which is becoming more common with extreme weather. In one instance, a Toronto-area homeowner declined flood coverage to save a few bucks monthly, then faced tens of thousands in damage when the 2024 flash flooding sent water gushing into their basement. Reach out to BrokerLink today for helpful tips on buying your first home.
What information is needed for a home insurance quote?
When it comes to providing key information for your home insurance, your insurance company or broker isn’t just being nosy. They’re gathering key details to build a policy that truly protects you. The Canadian Underwriter reports that home insurance premiums in Canada rose by 5.28% from January 2024 to January 2025, and even higher in places like Alberta (9.07%).
“As insurers price for risk, this increased [severe weather events] risk is now impacting insurance affordability and availability,” said Craig Stewart, Vice-President of Climate Change and Federal Issues at IBC. This means that getting accurate coverage tailored to your needs matters now more than ever. Here’s what to have ready when speaking with a BrokerLink broker:
Your possession date
This is when you officially take ownership of your home. It helps determine when coverage needs to begin and can even affect your rates.
The name(s) on the property title
If more than one person is on the title, it can influence how the policy is set up. Be ready with full legal names and documentation.
Your prior insurance history
First-time buyer or not, your insurance history helps assess risk. Be prepared to share how many years you’ve had any type of home insurance (if any), including tenant insurance and condo insurance, and whether you’ve made any claims within the past 10 years.
Information to determine the cost to rebuild
Insurance companies need to know what it would cost to rebuild your home after a disaster, not just what you paid for it. To ensure there will be enough funds to help with the rebuild cost, they’ll ask about things like:
The home’s purchase price
The year it was built
The square footage
The plumbing and electrical
If any renovations or updates have been made
What materials were used for roofing and siding
Tip: Keep a folder (digital or paper) with inspection reports, renovation receipts, and any past insurance documents.
Common home insurance coverages in Canada
The IBC notes that if you own your home, a standard home insurance policy typically covers the main building, your personal belongings, any outbuildings on the property, and personal liability. Whether it’s a kitchen fire or a major flood, your insurance policy should protect your home, your belongings, your finances, and your peace of mind. Here’s a quick overview of the most common (and important) coverages every Canadian homeowner should consider:
Coverage type |
What it protects |
|---|---|
Dwelling coverage |
Covers the cost to rebuild your home’s physical structure, including detached structures like a shed or detached garage. |
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Insures your belongings (e.g., furniture, electronics, clothing, etc.) against covered perils that typically include fire, theft, water, and wind damage. |
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Personal liability coverage |
Helps cover medical costs and legal fees if someone is injured on your property or you’re sued for third-party property damage. |
Additional living expenses |
Pays for temporary housing and related costs if your home becomes uninhabitable due to an insured loss. |
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If you pass away or become seriously ill and can no longer cover your mortgage payments, this pays off or reduces your mortgage balance, helping loved ones stay in the home. |
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Mortgage insurance (default insurance) |
Required if your down payment is less than 20%. CMHC reports that roughly half of Canadian home buyers require mortgage insurance, but it protects the lender, not you. You’ll still need your own homeowner’s policy. |
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According to the IBC, in July and August 2024, four major weather disasters in Alberta, Ontario and Quebec led to over $7 billion in insured losses and triggered more than 250,000 insurance claims. Many homeowners were surprised to find their policy didn’t cover flood damage or additional living expenses while their home was being repaired. |
It’s important to mention that there are certain limitations to a homeowner’s insurance policy, such as coverage limits and policy exclusions. To learn more about what your home insurance policy can and will not cover, contact BrokerLink.
Optional insurance coverage
In addition to “must-have” coverages, here are some additional coverage options which can also help first-time home buyers when the unexpected happens:
Home equipment breakdown coverage
Contact BrokerLink today
Just as finding the right home takes time and resources, selecting the right home insurance policy deserves the same careful consideration. Our licensed brokers at BrokerLink can help you find the best coverage for your needs while helping you save money and time by finding and comparing policies on your behalf and unlocking hidden home insurance discounts.
Speak with a BrokerLink broker today by phone, email, or in person at any one of our locations throughout Canada to get your free insurance quote started and to learn more about how homeowners’ insurance can protect your future home. We also encourage you to take advantage of our free online quote tool that can provide you with a competitive quote in minutes.
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