What happens if you don’t have home insurance?

A woman thinking about home insurance with a cellphone in her hands while lying down on her bed.

You can help protect your home and everything in it with home insurance. Since home insurance isn't mandatory in Canada, it can be tempting to forego coverage and save some money. However, the benefits of having home insurance may just outweigh the risks of not having it. With coverage for your home, you can rest easy knowing you have help to cover expenses related to sudden or accidental property damage and liability.

Damages covered by home insurance

Most home insurance policies provide coverage for damages or loss to your home’s interior or exterior and personal belongings due to fires, weather events, theft, vandalism and more. It also covers injury to others who visit your home or damage that you accidentally cause to somebody else’s property.

Home insurance varies greatly, so it’s a good idea to ask your insurance representative for a list of what is not protected by most home insurance to see if you’ll need to take out additional coverages, or “endorsements”.

Risks of not having home insurance

Home insurance provides many benefits because it’s designed to help safeguard your valuable investment. Should you decide not to have insurance, here are some of the common risks:

Cost of out-of-pocket damages

One of the main purposes of home insurance is to cushion financial losses caused by damages to your home. If you consider how insurance companies determine the replacement value of a home and calculate the cost to replace or fix any damages, you’re probably looking at a large amount of money. Without a home insurance policy, you’ll be responsible for covering all the expenses to get your place fixed up. With home insurance, it can help cover some of the out-of-pocket expenses so that you can get your property back in tip-top shape.

No liability protection

Basic home insurance plans generally include liability coverage, which protects you from any injuries accidentally caused to a person visiting your house or damages you accidentally caused to another person’s property. If you don’t have home insurance, you might end up having to pay for the injured person’s medical bills or shoulder any litigation fees.

Loss of personal items

Usually, home insurance includes coverage for your personal belongings in case they’re damaged by perils covered in your policy. You can also get additional coverage that extends protection to expensive items like jewellery or artwork. Without home insurance, you’ll have to deal with the loss of your things and pay to get them back yourself.

Maximizing your home insurance

It’s always a good idea to have home insurance for your property. By taking out a policy, you’re protecting yourself, your belongings, and the people you love from unexpected accidents.

When choosing a home insurance policy, you should think about your level of risk and determine your specific coverage needs. Most home insurance covers the basics like physical damage to your home or property, loss of personal belongings and personal liability. While this may be enough for some homeowners, it’s good to explore your options and other additional coverages. Discuss with your insurance representative to determine the best policy for your needs.

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