Yes, you should arrange home insurance before you close on your first home in Ontario. The law does not require it, but your mortgage lender normally will, and you want protection from the day you get the keys. Start early, insure the building for what it would cost to rebuild, and tell your broker about the home's wiring, plumbing and heating.
Key takeaways
- Your lender will usually ask for proof of insurance before it releases the mortgage money, so do not leave this to the last day.
- Insure the building for the cost to rebuild it, not for the price you paid.
- A standard policy bundles building, belongings, liability and extra living costs. Flood, sewer backup and earthquake are usually separate add-ons.
- Old wiring, old pipes and the heating system affect whether you can get a policy and what it costs.
- Compare quotes, ask about bundling with your car insurance, and get everything in writing.
Your lender, proof of insurance and the timeline
Why your lender wants proof
Home insurance is not required by law in Ontario. Your lender is a different story. The house is the security for your mortgage, so the lender wants to know it is protected if there is a fire or other covered loss.
Most policies include a loss payee clause. In plain words, it names your mortgage lender on the policy, so a claim payment may go to you, to your lender, or to both, depending on the insurer's decision. The Financial Consumer Agency of Canada describes this on its home insurance page.
Your lawyer will usually tell you what the lender needs to see before closing. The document may be called an insurance binder, a certificate or a letter of confirmation. Names vary, so ask your lawyer and lender exactly what they accept and when they need it.
A timeline from offer to closing
There is no single official schedule, so treat this as a practical checklist.
| When | What to do |
|---|---|
| As soon as your offer is firm | Ask a broker for quotes. Give the address, the year built, and any known issues from the inspection. |
| Several weeks before closing | Compare quotes, answer the insurer's questions, and choose a start date equal to your closing date. |
| Before the lender's deadline | Send your lawyer and lender the proof they ask for. |
| Closing week | Confirm the policy start date, the lender's name on the policy, and how you will pay. |
| After closing | Keep the full policy documents. Cancel or update any tenant insurance you had. |
If you currently rent, you may have tenant insurance. It does not carry over to a house you own. Our guide to condo, tenant and home insurance in Ontario explains the differences.
Rebuild cost is not market value
This is the point many first-time buyers miss. The price you pay includes the land, the location and what buyers will pay in the current market. Insurance for the building covers something else: the cost to rebuild the house if it is destroyed.
The Insurance Bureau of Canada says that the replacement value of your home may differ from its market value and its municipal tax assessment. A house in a very expensive Toronto neighbourhood may cost less to rebuild than it sold for, because much of the price is the land. An older house with detailed woodwork may cost more to rebuild than you expect.
How to get a sensible rebuild figure
- Ask your broker how the insurer arrived at the rebuild amount and what it assumed about size, age and finishes.
- Tell the insurer about features that cost more to rebuild, such as a finished basement, custom kitchen, plaster walls or a heritage style.
- Ask whether the policy has guaranteed replacement cost, and what conditions apply. According to the Insurance Bureau of Canada, guaranteed replacement cost pays without a deduction for depreciation, but the insured amount typically has to be set at the full cost to replace the dwelling.
- Ask about a same site clause. Some policies pay the full amount only if you rebuild at the same location.
- Expect the figure to be reviewed over time and update it after renovations.
We cannot give you a per-square-foot number, because it varies by insurer, builder and region. A broker can show you how it was calculated.
What a home policy covers
The Insurance Bureau of Canada describes the main parts of a home policy. The names differ between insurers, but the idea is the same.
- Building (dwelling). The house itself, and often outbuildings such as a detached garage or shed, with some limits.
- Contents (personal property). Furniture, clothing, electronics and other belongings. Ask whether it pays replacement cost or actual cash value, which is the replacement price minus depreciation. Replacement cost usually pays more.
- Personal liability. Covers injury or property damage you unintentionally cause to other people, for example a visitor who slips on your icy steps. It does not cover injuries to you or members of your household.
- Additional living expenses. Most policies pay for temporary housing and extra living costs if an insured loss makes your home unlivable.
Keep a simple list of your belongings with photos, serial numbers and receipts. It helps you choose a contents limit and makes a claim faster.
What is usually not included
A home policy is not a maintenance contract. Predictable or preventable losses are excluded, and so are some events you may assume are covered. The Insurance Bureau of Canada notes that flood, earthquake and sewer backup are optional coverages you may be able to buy separately.
| Risk | Standard policy | What to ask |
|---|---|---|
| Sewer or drain backup | Usually an optional add-on | Is it available for this address, and what is the limit? |
| Overland flood | Usually an optional add-on | Is it offered where I live? |
| Earthquake | Usually an optional add-on | What deductible applies? |
| Frozen pipes while away | Limits apply if the home is unattended | How long can I be away in winter? |
| Wear, rodents, insects | Excluded | What upkeep does the insurer expect? |
| Business run from home | Generally not covered | Do I need a separate policy? |
For many Ontario owners, water in the basement is the loss to plan for. Read our article on water damage and sewer backup insurance in Ontario before you decide which add-ons to buy.
What insurers ask about older homes
Insurers rate a home on its condition as well as its address. The Insurance Bureau of Canada lists wiring, plumbing, the roof, heating, claims history and location among the factors.
- Wiring. Expect questions about knob-and-tube or aluminum wiring and the size of the electrical service. If knob-and-tube wiring is confirmed, the Insurance Bureau of Canada advises telling your insurer. Some insurers may require an updated Electrical Safety Authority certificate, and homes with 60-amp service may be ineligible for some coverage or face surcharges.
- Plumbing. Lead and galvanized steel pipes are more likely to leak. Some insurers have exclusions for Poly-B plumbing. Many reward upgrades.
- Roof. Insurers generally prefer roofs to be updated within 20 years.
- Heating. Be ready to say how the home is heated, including any wood stove, fireplace or fuel tank, and how old it is. We could not verify specific insurer rules on oil tanks, so ask your broker what is required.
The best moment to learn this is before you waive conditions on the purchase. Your home inspection report is useful here, so share it with your broker. If an insurer will not cover a house, or only on harsh terms, you want to know before closing, not after.
Bundling and what to ask your broker
Bundling with your car insurance
The Financial Consumer Agency of Canada notes that bundling home and car insurance may earn a discount. How much varies by insurer, and the cheapest home policy and the cheapest car policy are not always from the same company. Ask for the bundled price and the separate prices side by side. You can read about other ways to lower your car premium in our guide to how to lower car insurance premiums in Ontario.
Questions to ask
- Can you give proof of coverage to my lender and lawyer, and by what date?
- How did you calculate the rebuild cost, and does the policy pay guaranteed replacement cost?
- Is my contents coverage replacement cost or actual cash value?
- What is my deductible, and is there a separate deductible for water damage?
- Are sewer backup, overland flood and earthquake available, and what are the limits?
- Do you need an electrical inspection, a plumbing report or a heating inspection for this house?
- What is my liability limit, and is a higher one available?
- What would bundling with my car insurance save?
Brokers in Ontario are licensed by RIBO.
Before you act
- Ask your lawyer and lender what proof of insurance they need, and the deadline.
- Request quotes soon after your offer becomes firm, not in closing week.
- Give your broker the inspection findings, including wiring, pipes, roof and heating.
- Choose a building amount based on rebuild cost, and decide which water and earthquake add-ons you want.
- Set the policy to start on your closing date, with the lender named correctly.
- Save all documents. Then review the policy once a year and after any renovation.
If you would like help comparing options, you can see our home insurance page and ask for a call.
A note on this article
This article is general information, not advice. Insurance rules and insurer practices change, so confirm details with your broker, your lawyer and your lender before you decide. Reviewed October 2026.
