How to shop for home insurance: A step-by-step guide
10 minute read Published on Oct 16, 2025 by BrokerLink Communications
Home insurance, also known as homeowners insurance, is one of the most important financial safeguards you can purchase as a homeowner. This safeguard protects your biggest investment--your home and your personal belongings from numerous unexpected events that could impact your livelihood. However, despite how invaluable this type of coverage may be, many Canadian homeowners tend to keep homeowners insurance on the back burner, such as choosing the cheapest policy or opting not to purchase coverage at all.
These choices can lead to expensive losses. With home insurance premiums increasing up to 7.66% year-over-year and natural disasters causing a record-breaking $8 billion in insured losses in 2024 alone, having the right home insurance policy in place is more vital than ever.
This step-by-step guide is designed to help you avoid gaps when it comes to your coverage, to assess your insurance needs, and save money without compromising your level of protection. Stick around for more information.
Understanding the basics of your homeowners' insurance policy
Before you're able to compare different policies, understanding what home insurance covers and what it doesn't is essential. Within a standard homeowners insurance policy, you'll find the following coverages:
Dwelling insurance
The dwelling portion of your home insurance covers the physical structure of your home and any detached structures on your property, like a shed or a garage, from damages that may arise from perils such as fire, vandalism, theft, severe weather events, and falling objects.
For example, let's say a fire damages your kitchen and costs $5,000 to fix. If your deductible is $500, then your insurance company would cover $4,500 worth of the repair bill, while you only pay $500.
Contents coverage
Content coverage protects the personal belongings in your home--from your clothing, to electronics, jewellery, and more from physical damages or losses such as theft, vandalism, fire, severe weather, and more. For example, if a break-in occurs at your home and some of your items are stolen, your homeowner's coverage will cover the cost of replacing your personal property.
Personal liability coverage
Personal liability coverage protects your interests and finances if someone is injured on your property or if you accidentally cause property damage to someone else's property. In the event a liability claim is filed against you, this insurance policy will cover the cost of medical expenses, repairs, replacements, legal fees, and other associated expenses.
Additional living expenses
In the event your home is damaged by a covered loss to the extent where it is unsafe for you and your family to live in while repairs are being conducted or your house is being rebuilt, the additional living expenses portion of your plan will cover the additional costs of accommodations, meals, and other additional costs during the time you are unable to live at home.
Additional coverage
A lot of the time, a standard home insurance policy isn't enough to fully protect your home, which is why many homeowners opt to purchase add-on coverage options to supplement their plan, including overland flood insurance, sewer backup coverage, high-value home insurance, and more.
For example, natural disasters such as the $3 billion Calgary hailstorm and the $880 million Jasper wildfire in 2024 are to be excluded from basic home insurance policies, so endorsements for overland flood, sewer backup, and other coverages can be highly valuable.
Levels of home insurance in Canada
There are three main levels of home insurance policies in Canada:
Comprehensive coverage: Comprehensive offers the most extensive coverage, protecting your home and personal property from all risks except those specifically excluded in your plan.
Basic coverage: Only covers the risks specifically listed in the policy. It’s more affordable but offers limited protection against unforeseen risks.
Broad coverage: Offers a bit of both, with comprehensive coverage for the dwelling portion of your home, but basic insurance for your personal belongings.
Assessing your property insurance needs
Every home and homeowner is different, which is why ensuring your property insurance coverage reflects your unique needs. One of the first steps when shopping for home insurance is evaluating how much coverage you actually need. Here's what you need to do:
Replacement value of your home
In the event of a total loss, a replacement cost policy will cover expenses to rebuild your home with similar materials. With the cost of residential construction materials in Canada having surged by 67% over the past five years, underestimating the replacement value of your home is a risk you need to be aware of. Ensure that your homeowners' insurance reflects current rebuilding costs, not outdated replacement costs.
Location risk factors
Where you live will greatly influence your home insurance premiums. For example, in 2024, Saskatchewan and Manitoba saw the highest increase in insurance premiums, which can be largely attributed to local risk factors.
Some of the main factors insurance companies are looking at when it comes to where your home is located include local crime rates, wildfire zones, areas with frequent flooding, and where the closest fire department is relative to your property. Therefore, if you live in a forest-dense area or a floodplain, your home insurance costs may be more expensive than someone living in a relatively low-risk neighbourhood.
Home characteristics and upgrades
Renovations, like adding a completed basement, renovating your kitchen, or installing a pool, could raise your premiums, as these upgrades can increase your home's market value. In contrast, upgrades, such as new wiring, plumbing, or impact roofing, may minimize your risk profile while potentially lowering your insurance costs.
Comparing home insurance companies
With numerous home insurance companies across Canada, choosing the right one to work with can be overwhelming, especially if it's your first time buying home insurance. By doing a bit of research on different insurance companies ahead of time, you can potentially lower your home insurance rates and ensure you have enough insurance. Here's what to look for:
Look at reviews and ratings
The first thing you're going to want to do is look for insurance companies in your area and online that have good customer reviews. Look for reviews that specifically mention the home insurance claims process and their customer service. Working with an insurance provider who has a responsive customer service team and a swift insurance claims process can make a world of difference when disaster strikes.
Insurance agent vs. insurance broker
Insurance agents work directly for a specific insurance company, giving them expert insight into the different home insurance policies offered by their company. However, an insurance representative has less flexibility when it comes to customizing a plan to fit your needs, given that they are limited to the home insurance policies offered by their insurance company.
On the other hand, insurance brokers work independently from insurance providers and are known for more customized financial protection. This allows them to shop around on your behalf, compare prices from different insurance companies, look at different insurance coverage options, and search for various discounts that can help you save on home insurance costs.
Don't forget the fine print
It's important to remember that no two home insurance plans are the same, which is why reviewing the details of each policy is crucial. Here's what you need to specifically pay attention to:
Exclusions
Oftentimes, exclusions include overland flood damage, sewer backup, mould and mildew growth, and intentional harm to property. Be sure to confirm what is and isn't included in your home insurance policy, as you may be able to add an endorsement later on for protection.
Deductibles
A deductible is the amount you pay to your insurance company when filing a homeowners insurance claim. Choosing a higher deductible of $1000 means you'll pay more out-of-pocket should a claim occur, but it can lead to lower premiums. Finding a balance between savings and what you can comfortably afford to pay is key.
Coverage limits
The coverage limits you choose, or how much coverage you purchase, are directly impacted by the value of your home and your personal belongings. Ensure that you choose a high enough coverage limit to fully cover the cost of replacing or rebuilding your personal property and home.
Optional endorsements
Once you've looked at the inclusions and exclusions of your home insurance and assessed your insurance needs, you'll then be able to determine whether additional coverage for your plan is needed.
How to lower your home insurance premiums
As we mentioned, home insurance costs can vary significantly between homeowners as rates are determined by numerous factors like claims history, location, coverage limits, and more. With inflation on the rise and the severity of natural disasters worsening with climate change, homeowners in Canada often look for ways to lower their home insurance costs. If you want to get the best deal available, here's what you need to do:
Bundle your home and auto insurance
Bundling your home and car insurance with the same company can help you save up to 15% on each insurance policy.
Compare insurance rates from numerous insurance companies
Home insurance carriers base rates on customer risk profiles, meaning you'll likely be quoted a different rate at each company. Therefore, take advantage of getting a quote for your home insurance from more than one insurance provider to compare rates and coverages. That way, you can find the best savings available without sacrificing your coverage.
Install a security system
With property theft on the rise, installing a security system like motion lights, an alarm system, and cameras on your property can help you get a bit of a discount with your insurance company, as it actively deters theft. Note that not all systems are eligible for discounts. You'll need to confirm with your provider that your system qualifies for savings.
Avoid filing small home insurance claims
Not all damages are worth filing with your insurer. For example, if a covered claim occurs and the cost of repairs is lower than your deductible, it makes sense to pay for the costs out of pocket, as filing a claim will increase your home insurance premiums the next time you renew your policy.
Remember, multiple claims of your insurance history will appear a a red flag to future providers. Therefore, limiting the number of claims you file can help you keep your costs low over time.
Ask About Other Discounts
Most insurance companies offer other discounts to customers, including:
Being mortgage-free
Loyalty or long-term customer status
Belonging to a professional association or union
Retirees or seniors
Make sure to ask your agent or broker to confirm whether you qualify for any savings!
Opt for a higher deductible
As we mentioned, opting for a more expensive deductible can lead to a more affordable insurance premium. However, you will need to pay more out-of-pocket if you do need to file a claim in the future. Only choose this if you feel comfortable with the possibility of paying more in the event of a claim.
Review your home insurance annually
Don't forget to review your home insurance policy every year. Never assume that your existing policy is the best choice. Average home insurance costs vary greatly across insurers and communities in your province. Shopping around on an annual basis allows you to take advantage of new savings or switch to a less expensive provider. If you need to, speak with your agent for clarification on your policy coverages and fees. Being proactive about your savings not only lowers your monthly rate, but it also ensures you're not overpaying for unnecessary coverage. With increased climate hazards and claim costs, it is more important than ever to make the most of your coverage and costs.
Common Home Insurance Pitfalls to Avoid
Even long-time homeowners can fall short when it comes to finding the right home insurance for their homes. Take a look at some of the most common mistakes homeowners make and learn how to avoid them below:
Underinsuring your home
Many homeowners make the mistake of insuring their home based on its market value, not the replacement cost. In the event of a total loss, this can leave you significantly underinsured, especially now that construction costs have increased over the past five years.
Not reviewing your home insurance annually
Your insurance needs change over time. Failing to review your policy before each renewal can leave you uncovered and paying for unnecessary protection you no longer need. Make sure to look over your plan, as it will help keep your coverage current with your insurance needs.
Believing all home insurance coverage is the same
Not every home insurance policy offers the same level of coverage. Some could leave out water damage, earthquake protection, or set low limits for your personal property. Always read the fine print of your plan to fully understand what is and isn't included.
Choosing the cheapest home insurance option
Saving money is great, but not when it sacrifices the level of coverage you receive from your home insurance. Choosing the cheapest option could leave you significantly underinsured and put your finances at risk should the unexpected occur. Remember to balance protection and pricing when possible.
Not disclosing certain information to your provider
Failing to be honest with your insurance company can lead to claim denials and other consequences. Always disclose information about recent renovations, whether you rent out a portion of your home, and other details your insurance provider may ask for, to ensure you're comprehensively covered.
Ignoring optional coverage
In the summer of 2024, Canadians filed nearly 228,000 insurance claims, indicating a considerable increase in natural disasters and other hazards. Ignoring the value of additional coverages for things like overland flooding and sewer backup could put your finances at risk. Always consider the local risks that may impact your home when buying home insurance.
Final Steps: Getting the best deal on your home insurance in Canada
Once you've narrowed down the options available, the last thing to do is secure the best deal possible for your coverage. Here's how to wrap up your home insurance buying process with ease:
1. Ask the right questions
Before signing your home insurance contract, ask the following questions:
What is and isn't covered by my plan?
Are there penalties for changing my policy before the end of my term?
How are claims handled?
2. Negotiate your rates when possible
If you do decide to work with an insurance broker, they'll be able to negotiate on your behalf when it comes to savings. If working with an agent, don't hesitate to negotiate some of your terms or costs by asking about discounts.
3. Organize your documents
Before heading to your appointment, make sure you have the following documents with you:
Mortgage details
Home inventory
Home value
Home details like square footage, age, etc.
Previous claims history
How BrokerLink can help
Since 1991, BrokerLink has helped Canadian homeowners find affordable home insurance coverage. With access to numerous policies from some of Canada's top providers, our brokers can help you shop around, compare quotes, customize your coverage to fit your budget and needs, and provide advice if you're buying a new home. Beyond standard Ontario home insurance, BrokerLink can help you acquire:
Ready to work with a broker for home insurance? Contact BrokerLink over the phone or by email to speak with a broker directly, or use our online quote tool for a competitive quote ready within minutes!
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