Natasha Shaw

Home insurance protects you and your lender from loss in the unfortunate event that your home is damaged or destroyed by fire, storm or other hazards.

Home insurance is mandatory, as all lenders in Canada will require mortgagers to obtain home insurance for the full guaranteed replacement value for their new property.

In fact, they will require the policy to be maintained throughout the mortgage term as cancellation of the policy is a breach of the mortgage loan contract with the lender.  If a home insurance policy is not maintained, the lender has the right to demand the mortgage be paid in full immediately.  Of course, you can change your policy or your insurance company as your policy allows, but whenever a change is made, your lender will need to be made aware of the new details.

While a fire insurance policy is the minimum requirement by the lenders, homebuyers and owners will want to consult with a professional insurance broker about the benefits of broader coverage and add on policies like earthquake insurance and sewer back up coverage.

Related Topics:

Title Insurance

Mortgage Protection Insurance