Is Home Insurance Mandatory in the Maritimes? Why You Should Get It
Owning a home is a major investment. Protecting that investment is a top priority for most homeowners.
Is home insurance mandatory in the Maritimes? It’s not legally required, but if you’re like most Canadian homeowners, you’re probably carrying a mortgage. In that case, your financial lender will require you to have home insurance. And even if you’ve paid off your home, going without insurance could leave you financially at risk.
Is home insurance required by law in the Maritimes?
No, there’s no provincial or federal law in Canada that forces homeowners to carry home insurance. You could technically own a home without any insurance at all, provided you’re not financing it through a mortgage.
But here’s the catch: mortgage lenders require home insurance as a condition of the loan. Until the mortgage is fully paid off, you’ll be required to maintain an active home insurance policy that names your lender as the beneficiary in case of a major loss like fire, flood, or structural damage.
Why mortgage lenders require insurance
Your lender has a financial stake in your home, whether you are in New Brunswick, Nova Scotia, or Prince Edward Island. If your home burns down or floods and there’s no insurance in place, the lender risks losing the entire value of the loan. By requiring insurance, they ensure that the money they’ve lent you is protected.
In some cases, if your home insurance lapses or is cancelled, the lender may step in and take out a “force-placed” policy on your behalf. These are usually more expensive and only protect the lender’s interest, not your personal belongings or personal liability. That’s why keeping your own house insurance coverage up to date is always in your best interest.
The risks of going without home insurance
Even if you own your home in the Maritimes outright, not getting insurance leaves you vulnerable to these risks:
- Damage to your home: Fires, burst pipes, hailstorms, or wind damage can lead to repair bills in the tens or hundreds of thousands of dollars that would be covered by you.
- Loss of belongings: Imagine replacing everything in your home on your own dime.
- Liability claims: If someone is injured on your property, you could be held legally responsible. Home insurance typically includes third-party liability coverage to protect you in these situations.
- Temporary living expenses: If your home becomes uninhabitable, insurance can help cover hotel stays, meals, and rentals while it’s being repaired.
- Dwelling coverage: This protects the physical structure of your home, including the roof, walls, foundation, and attached structures like garages.
- Personal belongings: Your furniture, clothing, electronics, and other possessions are protected from events like fire, theft, and vandalism. Some policies also cover belongings when they’re temporarily outside your home, like on vacation.
- Liability protection: If someone is injured on your property or if you accidentally cause damage to someone else’s property, your insurance helps cover medical bills, legal fees, and settlement costs.
- Additional living expenses: If a covered claim forces you out of your home temporarily, insurance will help pay for a place to stay and related costs.
- Detached structures: Sheds, fences, and detached garages are typically covered up to a certain limit.
- Optional coverages: You can also add coverage for events not included in standard policies, such as overland water (flooding) and sewer backup coverage.
What does home insurance cover in New Brunswick, Nova Scotia, and Prince Edward Island?
As a homeowner in the Maritimes, you can customize your home insurance policy.
Final thoughts
Home insurance in New Brunswick, Nova Scotia, and Prince Edward Island is usually required by lenders and always recommended by professionals. Whether you live in the city or the countryside, whether you’re in a condo, a townhouse, or a detached home, having home insurance protects you.
5 FAQs about home insurance
Is home insurance required by law in the Maritimes?
No, home insurance is not legally required anywhere in Canada. However, mortgage lenders will make it a requirement before finalizing a loan.
What happens if I don’t have home insurance in the Maritimes?
If you own your home outright, you won’t be penalized by any government, but you take on 100% of the financial risk if something happens. If you still have a mortgage and your insurance lapses, your lender could put a more expensive policy in place and charge you for it.
How much does home insurance typically cost?
Home insurance premiums vary depending on your location, the value of your home, the age of the building, and your coverage selections. On average, Canadians pay between $800 and $1,200 per year for home insurance.
Is strata insurance or renters insurance the same as home insurance?
Condo insurance covers your individual unit, contents, and liability, but not the building itself. Renters insurance only covers your personal belongings and liability. Homeowners insurance, on the other hand, protects the full structure and land you own.
Can I switch home insurance providers if I find a better rate?
Yes. You can change home insurance providers at any time. Just make sure you avoid a coverage gap by setting up your new policy before cancelling the old one. If you’re switching mid-term, you may need to pay a cancellation fee, but the savings could still outweigh the cost.