Home insurance is a customizable product that offers financial protection to Alberta homeowners. While it’s not mandatory anywhere in Canada, it’s well worth considering. For the cost of a monthly premium, the value of the home and its contents can be protected against perils such as fire, wind and hail.
Most policies include the following four coverage components:
Home insurance policies are marketed by insurance providers in packages. It’s common for homeowners to choose between the three following home insurance policy types:
Homeowners can then extend coverage by adding endorsements or optional coverage. These add-ons offer protection against perils that are either not included in the policy or are explicitly excluded.
Common add-ons include:
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Across Canada, home insurance premiums have steadily increased as providers pay out record claims for damage from more severe weather events.
In the latter half of the 2010s, Alberta experienced multiple weather events that resulted in ‘catastrophic losses’ (insurance lingo for events that result in more claims than usual). The 2016 fires that razed Fort McMurray cost the insurance industry $5.04 billion alone and it remains the largest insured loss event in Canadian history.
Events like these trigger premium hikes; as destructive storms become more frequent, insurers need to make sure they have enough cash reserves to meet their obligations to current and future customers.
And yet, home insurance prices were declining at the start of the new decade. Year-over-year, home insurance premiums in Alberta between the end of Q2 in 2020 and the end of Q4 in the same year went down more than 1%.
Unfortunately, insurance prices quickly changed course. According to Applied Systems, the average year-over-year increase in personal property premium rate in Alberta, from Q2 2021 to Q2 2022, was 8%.
While many factors could have triggered the reversal, severe flooding in Fort McMurray in 2020 likely didn't help; that disaster resulted in $2.3 billion in claims. Then the following year, a hailstorm in Calgary resulted in $247 million in payouts.
Further price hikes are expected due to ongoing supply chain issues driven by the COVID-19 pandemic and inflationary pressures.
In general, home insurance rates are easier for providers to increase because the regulatory approval that car insurance rate increases require does not apply.
There are many ways that homeowners in Alberta can reduce their insurance costs, including:
|Insurance company||Company type||Phone||Address|
|Allstate Insurance||Agency||587-401-3978||1649 102 St NW, Edmonton, AB T6N 0B1|
|AMA Calgary Main||Agency||(403) 240-5300||
4700 17 Avenue SW
|AMA Insurance - Edmonton||Agency||780-474-8777||10310 G. A. MacDonald Ave NW, Edmonton, AB T6J 6R7|
|Aviva Insurance||Agency||403-750-0600||112 4 Ave SW Suite 2100, Calgary, AB T2P 0H3|
|belairdirect||Agency||1-833-378-6200||901-9707 110 St NW, Edmonton, AB T5K 2L9|
|Economical Insurance||Agency||1-800-661-3274||10158 103 St NW #300, Edmonton, AB T5J 0X6|
|InsuranceHotline.com||Quotes comparison||1-855-821-7312||360 Adelaide St W suite 100, Toronto, ON M5V 1R7|
|Intact Insurance||Agency||780-428-7544||10830 Jasper Ave #700, Edmonton, AB T5J 2B3|
|LowestRates.ca||Quotes comparison||1-855-487-6911||1910 Yonge St Suite 401, Toronto, ON M4S 3B2|
|RATESDOTCA||Quotes comparison||1-844-726-0907||360 Adelaide St W suite 100, Toronto, ON M5V 1R7|
|Surex Insurance||Brokerage||1-855-242-6612||130 S Centre St, Magrath, AB T0K 1J0|
|TD Insurance Home & Auto||Agency||780-409-0281||10025 102A Ave NW, Edmonton, AB T5J 2Z2|
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Many home insurance policies list exclusions or perils that are not covered. A common exclusion is flooding with no home insurance policies in Alberta providing flood protection unless specific endorsements are added by the homeowner.
When adding flood protection, homeowners may notice that some insurance providers offer water protection packages that include coverage for different types of flood protection such as overland water and sewer back-up.
Alberta residents are increasingly familiar with the need to have flood protection. Insured losses resulting from severe weather events across Canada reached $2.1 billion in 2021, according to the Insurance Bureau of Canada. Some of the most expensive disasters in Alberta include hailstorms in July 2021 ($500 million) as well as several rainstorms and wildfires. The wildfire that ravaged Fort McMurray, Alta in 2016 remains one of the most catastrophic insured loss events in Canadian history, totaling more than $5.4 billion.
While most home insurance policies include coverage for damage from fire (including wildfire) and wind (including hailstorms), in order to be covered, the homeowner must have basic home insurance.
Alberta residents who live in an area that insurance providers have deemed high-risk hail zones should closely examine their home insurance policies so that they’re aware of any coverage restrictions and/or rate increases associated with hail risk. It’s not uncommon for homes in Alberta to be damaged by golf ball-sized hail.
The single most effective way to reduce home insurance costs is to compare available rates. Alberta homeowners who take the time to survey premiums from providers across Canada every time their policy is up for renewal can save up to 30%.
Other ways to reduce premiums include bundling coverage so that each policy is held by a single provider, agreeing to a credit check, increasing the deductible, keeping the home in good repair and installing security, fire and smoke alarms. It’s also important for homeowners to customize their coverage so that they’re only paying for the coverage they need, nothing more.
According to RATESDOTCA’s Home Insuramap, in 2022, the average home insurance premium in Alberta was $2,339. In general, home insurance rates are determined by many factors, including location. Those living in areas that are prone to flooding or perils such as fire and wind damage should expect to pay more for their coverage. On the other hand, homeowners in areas that are considered safer – whether from extreme weather or theft – can expect to pay less.
Home insurance premiums tend to increase more often than car insurance premiums because no regulatory approval is required for providers to increase them. As insurance providers pay out more and more record claims due to increasing severe weather events, home insurance premiums are likely to continue going up across Canada.
Yes. We recommend that homeowners renting out their home on a short- or long-term basis inform their insurance provider. They may need additional liability coverage for protection if someone is injured at the home. Providers may deny a claim if they were unaware that the home was being rented.
Homeowners who have difficulty securing coverage can purchase high-risk insurance, however, it must be done by speaking directly with an insurance agent or broker rather than online.
Homeowners who have an extensive claims history or have missed payments may need high-risk insurance. Similarly, if the home they’d like to insure in an area that’s prone to damage from flood or wildfire, high-risk coverage may be a direction they must consider.
As soon as a homeowner becomes aware of any damage to the home due to a covered peril, we recommend they immediately contact their insurance provider. A representative from the company will assist the homeowner through the process. The claims process is much easier if the homeowner first takes the time to inventory their home and its belongings. Though there are a range of apps that help the homeowner with this task, a simple list or spreadsheet will suffice.
*Shoppers in Alberta who obtained a quote on InsuranceHotline.com from January to December 2021 saved an average of 30%. The average savings percentage represents the difference between the shoppers’ average lowest quoted premium and the average of the second and third lowest quoted premiums generated by InsuranceHotline.com.