Home Insurance in Canada: What Your Mortgage Requires

Home insurance is a mandatory condition of virtually every mortgage in Canada — lenders require proof of coverage before closing, since the home is their collateral. Coverage typically includes the structure itself, your personal belongings, and liability protection if someone is injured on your property.

Standard policies usually exclude certain risks — overland flooding and earthquake coverage are common exclusions requiring separate add-on coverage, particularly relevant depending on your region. Check what's actually included rather than assuming a standard policy covers everything.

If you're buying a condo, your own policy typically covers your unit's interior and belongings, while the condo corporation's separate master policy covers the building's shared structure and common elements — the two are not the same coverage, and gaps between them (sometimes called the 'unit improvement' or 'betterments' gap) are worth understanding specifically for your building.

Insurance costs are one of the recurring monthly figures included in your GDS/TDS qualifying calculations, alongside your mortgage payment, property tax, and heating — worth getting a real quote rather than a rough guess before finalizing your affordability numbers.