Home Insurance in Calgary: What Does It Cover & Cost?

Buying a home is a large, long-term investment that deserves protection. Home insurance has many benefits and limitations, and can be somewhat difficult for people to understand, especially if they get it mixed up with a home warranty. With the answers to these questions, buyers will have a better idea of what to expect when they go shopping for home insurance.

What Is Home Insurance?

• A home insurance policy covers personal property and structural damage caused by covered events.
• A typical home insurance policy excludes events like floods, earthquakes, and criminal acts by the policy holder.
• In the event of damage or loss, homeowners should act quickly by contacting their insurer, documenting everything, meeting the adjuster, and saving receipts to ensure a smooth claims process.
• Home insurance in Calgary averages around $2,300 annually, but depends on many factors like policy and home size.
• Premiums can be reduced by increasing deductibles, bundling policies, maintaining good credit, qualifying for discounts, and being a loyal customer.

What Does Homeowners Insurance Cover?

People who have homeowners insurance need to know what is typically covered by their policies, and how those aspects of the home are covered. Typically, a policy will provide compensation based on actual cash value or replacement value of an item that is stolen or destroyed due to a covered event. 

Actual cash value takes into consideration the natural depreciation of possessions like furniture or technology, and does not compensate for the total cost of the items. Replacement value ensures payment based on the amount of money it would take to replace the item. 

Coverage for possessions in the home often requires documentation of the belonging's purchase. Insurers may vary the coverage based on the type of possession, and the policy that the person holds.

Are There Different Types of Home Insurance?

Home insurance is not legally required for homeowners, but experts recommend it as a layer of financial protection against the unexpected. It's also required by mortgage lenders. The coverage offered in a particular policy may be different from one insurer to the next, and there are unique coverage types:

• Comprehensive - designed to insure against most loss or damage to the building and its contents
• Basic or Named Perils - offers basic coverage only for named perils, such as vandalism or fire damage
• Broad - covers the building, and also protects the contents against named perils
• No Frills - given for properties that cannot qualify for other policy types
• Personal Liability - addresses injury or property damage that happens to people who are not residents of the property

What Is Not Covered By Home Insurance?

Even the most comprehensive insurance policy may exclude coverage for certain property or events. These are commonly referred to as Uninsurable Perils, and may include damage to property obtained illegally, loss or damage resulting from the policyholder's criminal acts, or damage that happens during war. 

Additionally, even the best homeowners insurance policies typically do not cover certain events, such as flooding or earthquakes. Homeowners who live in areas where earthquakes, floods, or sewer backups are common should ask their insurers about adding extra coverage to their policies for these specific concerns.

Making a Claim: Step-by-Step

Found water damage or had a break-in? Here's exactly what to do next to get your claim handled quickly:

1. Call your insurance company right away. Don't wait! Most policies have time limits for reporting damage. Your insurer can't help if they don't know what happened.
2. Take photos of everything. Before you clean up or move anything, snap pictures from multiple angles. These photos are your proof of what happened.
3. Make a list of damaged items. Write down what was damaged or stolen. Include:
• When you bought each item
• Roughly what you paid
• Brand names and models (if you remember them)
4. Keep all your receipts. If you need emergency repairs or have to stay somewhere else, save every receipt. Your insurance might cover these costs, but only if you can prove what you spent.
5. Meet with the claims adjuster. This person will visit your home to see the damage firsthand. Be there when they come and show them everything.
6. Review their assessment. The adjuster will tell you how much the insurance company will pay. Ask questions if something doesn't make sense.
7. Get repair estimates. For major damage, get quotes from at least two contractors. Your insurance may have preferred contractors they work with.
8. Complete repairs and replace items. Once your claim is approved, you can start repairs. Keep all receipts showing repair costs for reimbursement.

Most simple claims get settled within a few weeks. More complicated ones (like major water damage or fire) might take a few months, and having to handle it all is one of the drawbacks of owning a home. Stay in touch with your insurance company throughout the process.

How Much Does Calgary Home Insurance Cost?

Calgary homeowners typically pay around $2,300 for home insurance, but there’s a big range. Why? Your actual cost depends on:

Your Home's Details

• Age of your home: Older homes with outdated electrical, plumbing, or roofing cost more to insure.
• Size and type: Bigger homes—as to be expected—cost more to insure.
• Construction materials: Brick homes often cost less to insure than wood-frame homes because they're more fire-resistant.
• Special features: Finished basements, custom kitchens, and high-end finishes increase your insurance costs because they cost more to replace.

Your Location Within Calgary

Some neighbourhoods have higher insurance rates because of:

• Flood risk: Communities near the Bow or Elbow Rivers often have higher rates.
• Crime rates: Areas with more break-ins and vandalism have higher premiums.
• Distance to fire stations: Homes further from fire stations pay more.

Your Insurance Coverage Choices

• Deductible amount: Choosing a $2,500 deductible instead of $1,000 could save you 10-15% on your premium.
• Coverage limits: More coverage means higher premiums. But don't skimp here to save money!
• Optional add-ons: Coverage for sewer backup, overland flooding, or high-value items will increase your costs but might be worth it.

How to Keep Your Insurance Premiums Low

Many people in Calgary these days are looking for ways to reduce their cost of living. While cancelling your home, auto, and even life insurance isn't a prudent option, there are ways to reduce the amount of monthly premium payments. 

Your insurance payments aren't really fixed costs—there's always some flexibility, and in consultation with your insurance company, you should be able to bring them down somewhat.

Increase Your Deductible

It might drive you crazy that you even have to pay a deductible in the event of a claim, but in the interest of lowering your monthly payment, you might gamble by increasing your deductible. It's a short-term solution.

Are You Eligible For Other Discounts?

There are discounts offered by your insurance provider that can be overlooked, often due to lack of communication. When it comes to your home, if you've paid off your mortgage, recently replaced your roof, or installed an alarm system, you may be eligible for some discounts.

How's Your Credit?

When your annual insurance premium is spread out over monthly payments, your insurance company consults with the credit bureau to see what kind of a risk you are. There is also an equation that insurance providers use to figure out how likely you are to make a claim based on your credit score. This is based on historical evidence. 

So you might not see a correlation but your insurance provider does. If you have a good credit, your insurance premium will likely be lower than if you don't.

Annual Lump Sum or Monthly Payments

It's easier to swallow 12 small payments rather than one large one, but you're probably paying a finance charge or service fee for this convenience. The monthly service fee is often a percentage of the premium or sometimes it's just a flat rate.

Are You a Good Customer?

Just like your mobile phone provider that offers incentives for customer loyalty, your insurance provider can look at discounts or special rates based on the length of time you've been a customer. Conversely, if this isn't an option, you might look to see if another provider offers special pricing for new clients.

Bundling Really is a Thing

There are quite a few humorous commercials that talk about the benefits of bundling and it's true. No doubt your current insurance company offers this—after all, they want all of your insurance, not just your home or just your auto insurance. Ask about this type of reward. All you need to do is pick up the phone.

Special Situations

Not every home fits the standard insurance criteria. Here's what you need to know about special housing situations:

For Condo Owners

Your condo insurance coverage is different from regular home insurance. You only need to insure:

• What's inside your unit
• Any upgrades you've made to your unit 
• Your personal belongings

The condo corporation's insurance covers the building structure, roof, elevators, and common areas.

For Tenants

Even though you're living in someone else's property, you still need insurance! Landlord insurance doesn't cover your stuff.

Tenant insurance is cheap (usually $20-50 per month) and:

• Provides personal property coverage
• Has liability protection if someone gets sustains bodily injury in your apartment
• Covers additional living expenses if you can't stay in your apartment after a covered event

For Vacation or Secondary Homes

Cabins, vacation homes, and secondary properties often need special coverage. Why? Because they sit empty more often.

Insurance companies charge more for these properties because:

• Nobody's there to spot problems early
• Break-ins are more common
• Small issues (like water leaks) can become major disasters

If you bought a rental property or rent your home out part-time, tell your insurance company. Regular policies don't cover short-term rentals, but you can add this coverage.

How Do Homeowners Ensure Adequate Coverage?

Policies can be customized in nearly infinite ways based on the regional conventions, insurers' guidelines, and homeowner needs. People must carefully read and understand the details and limits of their own coverage well in advance of needing to file a claim. 

Insurance experts strongly suggest creating and maintaining a personal property inventory, with an estimate of the replacement value of the structure and notable items throughout the home and property. This will help homeowners to settle on how much coverage and what type is most appropriate for them, and to be better prepared in the event of a disaster.

Buying a home can feel like a more secure decision when buyers know that their investment will be protected against catastrophe. By knowing the specifics of their home insurance policies, homeowners can avoid stress in the event that they ever need to use the insurance to repair or replace items in their homes.