Average Cost of Home Insurance in British Columbia?
For most people, real estate is their biggest asset. Whether it is your primary residence or rented out for extra income, it is important to protect your biggest investment. Most homeowners or renters can’t afford to rebuild or replace their home if it is damaged or destroyed by natural disasters like fires, earthquakes, floods, or hail. House insurance not only provides coverage for the dwelling, it also covers replacing personal property, liability if someone is injured on the premises, and additional living expenses if you have to rent another place temporarily. Insurance gives us peace of mind, knowing that in a worse-case scenario, we can pay for somewhere to live and replace our belongings until we can rebuild or rent another home.
We will look at how home insurance premiums are calculated, the average cost of insurance in BC, regional factors affecting the price, how to lower your cost, and the plans Insure BC offers.
Table of contents
How are home insurance premiums calculated?
Did you know that one of the main factors affecting your premium is the location of your home? Insurance companies look at the number and type of claims which occurred in your neighbourhood using your postal code. With this information, they determine the risk of a claim occurring and apply this to the premium.
According to the Insurance Bureau of Canada (IBC), personal property damage claims have gone up 42% in the last decade. Personal property claims across the country have more than tripled since 1996 — up 213%, from $2.3 billion to almost $7.2 billion.
Some of the factors affecting your insurance premium include:
- Size and age of the dwelling
- Dwelling replacement value
- Condition of the home
- Type of structure and building materials
- Type and age of the electrical wiring
- Roof, Type of heating, Hot water tank, etc.
- Fire protection: Homeowners who live in areas where there is a Firehall close by may receive lower rates than those living further away from the station.
- Home Occupancy: The cost of residential home insurance can be cheaper if you have an owner-occupied dwelling rather than a rental, secondary or seasonal property. Homes that are vacant and under construction also carry high risks so they’ll require higher premiums.
- Optional Coverages: Additional coverages such as earthquake insurance, sewer backup and overland water coverage will increase your premium but could be worth it if you live in an area prone to natural disasters.
- Preventative measures: Homeowners who take additional precautions to protect their homes may receive additional discounts on their premiums. This includes installing monitored fire or burglar alarms, as well water backup valves, etc.
Note: For tenants and condo insurance, the amount of personal property coverage is one of the major factors as the policy covers contents rather than the dwelling itself.
What factors affect the home insurance pricing in a region?
There are a number of regional factors which affect the cost of insurance in a particular region. These include:
- Crime – If you live in Vancouver, your rate may be higher than a smaller rural town.
- Flooding – Areas such as Sumas plain, which experienced catastrophic flooding in 2021, will have higher rates for overland water coverage.
- Forest fires – Areas prone to forest fires such as Kelowna, Kamloops, and northern BC will have higher rates for fire coverage.
- Earthquake– The lower Mainland and coastal areas have higher earthquake rates than inland communities located in the interior of BC.
How to save on home insurance?
Although many factors which affect the cost of home insurance in BC are out of your control, there are some tips which can help you save money.
- Claims history:
You may be eligible for a discount if you have not had a claim for at least three years. If you have a small claim, you may wish to consider fixing it yourself rather than submitting a claim which could raise your insurance rate.
- Notify your insurance broker of upgrades:
If you have done upgrades to your roof, electrical, plumbing or replaced your hot water tank, let your broker know as upgrades may lower your premium.
- Check your Coverages:
Find out what’s included in your insurance package and the cost of different add-ons. Increasing your policy deductible to $1,000 or higher can lower your premium. If you have tenant insurance or condo insurance, check whether the amount of personal property is more than enough for your needs.
- Bundle your insurance:
If you have private car insurance, find out if there are discounts for having your home insurance with the same company.
Ask your broker what discounts are available. Discounts may be available for the insured’s age, age of the home, credit score, having a monitored fire or burglar alarm, sewer backflow valves and stability of residence.
- Consider paying annually:
Paying in one lump sum rather than a monthly payment could result in added savings.
Difference between the 3 plans offered by InsureBC (Practical, Popular, Premium)
Insure BC offers three different bundled packages, Practical, Popular, and Premium. The Practical Package offers the minimum and most basic coverage, while the Popular plan offers the most commonly requested coverages and works for most homeowners. The Premium Plan is ideal for homeowners who require increased coverages and enhanced options.
Coverages for single-family dwellings include dwelling coverage from $250,000 to $1.2 million, detached private structures, personal contents and liability, identity theft, additional living expenses, sewer backup, bicycles, and guaranteed replacement cost.
Optional add-ons include earthquake and water protection coverage. In addition, you can customize your policy by choosing your policy deductible, home deductible protection limit, personal property limit, and adding scheduled items.
Keep in mind that although home insurance is not mandatory by law in Canada, if you need a mortgage, it is sometimes required by the lender in order to receive or renew a mortgage.
There are also options for condo owners and tenants. If you rent a condo in BC, chances are, your landlord will often require that you have a tenant insurance policy. Even if you are renting a property rather than owning a condo or house, it is important to have coverage. Tenant insurance covers your contents, third party liability and additional living expenses such as a hotel room or rental unit if the condo or apartment unit you were renting becomes unliveable due to fire or flooding.
If you own a condo, it is important to cover your personal property and liability, improvements which have been made, additional living expenses, water damage originating from your unit, and special assessments due to a loss that the owners are required to pay.
Note: Your condo corporation’s commercial condo insurance policy covers the building’s exterior, roof, building infrastructure, and common areas such as the elevators, lobby, and halls, but does not cover your unit.
Protect your biggest investment
Homeowners insurance is an important part of protecting your home and its contents. The cost of insuring can be daunting, but it’s worth the investment for peace-of-mind that comes with knowing you’re covered in case disaster strikes!
Most homeowners could not afford to simply rebuild or replace their house or belongings if it burns to the ground or is destroyed by flooding or an earthquake. Having home insurance protects you from having to pay out a large amount in the event of loss or damage and provides peace of mind.
InsureBC’s licensed experts can help you from start to finish so you can feel confident and comfortable with your homeowners insurance decisions.