Frequently asked property insurance questions from Kitchener policy-holders: 

How much does Ontario homeowner insurance cost per month? ​

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Price is a real factor for many people when getting a quote for the right home insurance policy in Ontario, Canada. According to the JD Power & Associates 2018 Canada Home Insurance Study, the average cost of a home insurance policy was $1284 a year or $107 a month. 

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At Tradition Mutual Insurance Company, the average cost for a $350,000 comprehensive home insurance package rebuild at 2 million liability protection at a $1000 deductible costs around $70 a month. There are a variety factors that can affect the exact pricing such as:

- Distance to a hydrant or responding fire hall

- Specific water flood, water line and sewer/drain backup coverage options that are necessary 

- Prior insurance history 

- Heating type, age of roof, age of the home

- If you are claims free

- Other policies bundled with Tradition Mutual Insurance Company 

- Whether you are mortgage free or whether you are purchasing your

first home

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Who has the cheapest home insurance? 

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Price is a real factor for many Canadians looking for the right fit for their home insurance. According to the JD Power & Associates 2018 Canada Home Insurance Study, the steadily rising cost of inflation is making competitive residential insurance harder to find.  

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The good news is that at Tradition Mutual Insurance Company, we are a policy-holder owned insurance company instead of a stock-holder owned insurance company. We are a successful mutual insurance company partnered with the Ontario Mutuals representing one of the most secure financial networks in the world. Unlike large multi-national companies that are only looking to make profits, when we are financially successful, we keep our rates low and give a percentage of our profits back to our policy holders in the form a premium refund. Our board of directors assess our financial position every year to determine whether we will provide another refund of premium on top of our already competitive home insurance rates. For this reason, we believe that the competitive rates at Tradition Mutual Insurance on top of our great coverage's and superior customer service will make us your pick as the best home insurance company in Ontario. 

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What is the best home insurance policy? 

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Ontario residential insurance companies offer various home insurance packages depending on the risk, age, upkeep etc of home being insured. At Tradition Mutual Insurance Company, we not only want to get you the cheapest rate but show you how you can get the best home insurance policy. The three types of homeowner insurance packages that we offer are 

Standard, Comprehensive and Premium.

The Standard home insurance package can have up to two (2) past losses and one past cancellation from a prior insurance company. There is no criteria for the age of the home and the updates of the heating, electrical, plumbing and roof must be updated/replaced in the last 35 years. The homeowner doesn’t need to have a prior insurance history to qualify for this package. The housekeeping/upkeep of the home must be average to qualify. The insurance to value under this package can be an 80% co-insurance (insurance to value.) The policy covers named perils only. Debris removal is 5% of the dwelling building coverage, detached private structure coverage is 10% of the dwelling building coverage and personal property is 60% of the dwelling building. Guaranteed replacement cost coverage is not available in this package.

The Comprehensive home insurance package can have up to one (1) past losses and no past cancellations from a prior insurance company. There is no criteria for the age of the home and the updates of the heating must be 25 years, electrical 35 years, plumbing 35 years and roof must be updated/replaced in the last 25 years. The homeowner doesn’t need to have a prior insurance history to qualify for this package. The housekeeping/upkeep of the home must be good to qualify. The insurance to value under this package can only be at a 100% insurance to value position. The policy is insured under an all risk wording. Debris removal is 5% of the dwelling building coverage, detached private structure coverage is 15% of the dwelling building coverage and personal property is 70% of the dwelling building. Guaranteed replacement cost coverage is available in this package.

The Premium home insurance package can have up to one (1) past losses and no past cancellations from a prior insurance company. The home must be built in 1940 or newer. The updates of the heating, electrical, plumbing and roof must be within 25 years. The homeowner must have a prior insurance history to qualify for this package. The housekeeping/upkeep of the home must be excellent to qualify. The insurance to value under this package can only be at a 100% insurance to value position. The policy is insured under an all risk wording. Debris removal is 10% of the dwelling building coverage, detached private structure coverage is 15% of the dwelling building coverage and personal property is 80% of the dwelling building. Guaranteed replacement cost coverage is included in this package.

It is clear that the premium home insurance policy is the best coverage available at Tradition Mutual Insurance Company. Contact Kyle Wijnands at 519-393-3246 today to get a quote or take 3 minutes to get a home insurance quote by clicking the link below and let us prove that! 

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How much should home insurance cost? 

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With the cost of living steadily increasing across Canada, Ontario homeowners are doing their research to determine where they can get the best price, coverage and service from Ontario insurance companies.  

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At Tradition Mutual Insurance Company, we believe that you don't deserve to pay more than you need to for home insurance. To cut to chase, the average cost for a $350,000 comprehensive home insurance package rebuild at 2 million liability protection at a $1000 deductible costs around $840 a year. There are a variety factors that can affect the exact pricing such as:

- Distance to a hydrant or responding fire hall

- Specific water flood, water line and sewer/drain backup coverage options that are necessary 

- Prior insurance history 

- Heating type, age of roof, age of the home

- If you are claims free

- Other policies bundled with Tradition Mutual Insurance Company 

- Whether you are mortgage free or whether you are purchasing your

first home

- The deductible you chose

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How much should home insurance increase each year? 

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The Ontario insurance industry ensures that the rebuild of each home increases every year to keep up with the Ontario inflation index. Factors such as increasing minimum wages, higher costs of lumber due to forest fires, higher costs of steel due to tariffs and higher carbon taxes all have a bearing on the inflation factor that needs to applied to the home rebuild/cost of the policy. The average inflation factor that Tradition Mutual Insurance Company applies to home insurance rebuilds is 3%

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Which is better replacement cost or actual cash value and what is the difference?

• Replacement cost insurance will restore items to their previous condition, or purchase items that are of similar kind and quality of the ones that were lost without any deduction for depreciation.

• Actual cash value payment is based on the amount that the item was worth at the time that the loss occurred. For example, if a five year old furnace was destroyed in a fire, the insurance payout is calculated on the value of the five-year old furnace in its used condition.

• Actual cash value rates are usually cheaper, but in the case of a loss, if you choose to purchase new items instead of used items similar to the ones lost, you could have to pay the difference between the cost of the new item and the insurance payout.

What is an example of replacement cost on a home insurance policy?

If your home were to burn down, replacement cost would rebuild a home of a similar size and quality as the previous one without any deduction for depreciation factored into the claim payout.

What is the difference between replacement cost and guaranteed replacement cost on a property insurance policy?

Replacement cost will cover the cost to rebuild your home up to the limit of insurance coverage listed on your policy. Guaranteed replacement will cover the total cost of rebuilding your home even it exceeds the limit of your insurance.

What does 100% replacement cost mean for house insurance?

If your home is insured with 100% replacement cost, in the event of a loss your insurance company would compensate you with a home of similar kind and quality of the one lost. If you choose to insure your home at limits that are lower than 100% replacement cost, in the event of a loss you run the risk of having to participate in a portion of the loss yourself.

 Is replacement cost the same as market value?

No. Replacement cost is the amount estimated to be needed to rebuild a building of the same size and quality. Market value is the estimated price if your property would be sold in an open market.

 Why is replacement cost more than market value?

Replacement cost is more than market value because of various factors:

• Debris Removal- When a new house is built, there typically isn’t too much site preparation that needs to get done before building can begin. However with reconstruction,  there is a partially or completely destroyed structure that needs to be removed before construction can begin. This demolition and debris removal can be quite expensive and time consuming.

• Worksite Access- During new home construction, there is generally no landscaping that restricts access to the worksite. During a rebuild, often trees, shrubs, fences, lawns and flowerbeds are objects that contractors have to work around to get materials and equipment to the worksite. Often materials may have to be carried by hand to the worksite because they had to loaded off of the truck at a distance because of these obstructions limiting access to the worksite. This method of off-loading is much more time consuming and can increase labor costs significantly.

• Economy of Scale- When a contractor is building many homes at once, there is typically discounted wholesale prices that are available to him since there is so many of one product that is needed. For example, if a large number of kitchen sinks are being bought a discounted price is usually available versus if one sink is being bought and must be the same model and size as the one it is replacing it is quite unlikely that discounted rates will be provided. This concept is the same for nearly everything that goes into rebuilding a home, and thus why the cost of a rebuild can be thousands of dollars more that a new build.

• Use of Labour- When many new homes are being built at the same time, electricians, plumbers and carpenters can organize their schedules to make the most of their time. If one house isn’t ready for plumbing, the plumber can most likely work on another. However when only one house is being built, efficiency is much harder to obtain. Labor is normally the most costly part of rebuilding a home.

• Starting at Top vs Bottom- When building a brand new home, construction always begins from the foundation up. However, during rebuilding a house that hasn’t been completely destroyed, work must begin from the top down, which is often takes more time and labor.

• Unusual Features- Older homes often have features and materials that are not commonly used in construction today. Some of these materials may be slate roofs, stained glass, wainscoting, curved staircases, exposed beam ceilings or brick walls and lath & plaster walls. To replace or duplicate these features can be very costly.

• Protecting Undamaged Areas of Home and Contents- After the event that has caused the loss is over, any area of the home and all contents that have not been damaged must be protected to prevent further damage. This may involve putting up tarps over damaged roofs and walls to prevent water damage, and when possible, moving contents to storage to prevent looting.

• Construction Costs Inflate After Natural Disasters- After a natural disaster, such as a hurricane or wildfire, affects a region, construction costs almost always go up because of the rapid increase of demand. Local supplies for lumber, steel etc may run out, and these materials may have be shipped in from other places. Because of the urgency of the situation, this transport may require more expensive modes of transportation that normally used, and overtime pay.

• Building Code Changes: When many of the homes in our neighborhoods were built, the regulations and building codes put in place by the township were much more lenient. During a rebuild or renovation, there are often changes and updates that need to be done to meet new building code requirements. Examples of updates that might be required are your whole home needing to be rewired or replumbed. These new requirements can increase the cost of rebuilding a home by thousands of dollars.

• Even though the market value of homes may plummet, this doesn’t mean that the cost of steel, lumber and other raw materials that would be required to rebuild your home have gone down. An example of this scenario is the Great Depression. Real Estate had taken a severe hit, and even though the construction industry and new building in Canada had decreased as well, China’s economy was booming. Because they had a large market for steel, lumber and fuel, the prices for these raw materials in the whole world continued to rise. Many people still do not have adequate rebuild coverage for their home because they confuse market value and rebuild cost. Just because real estate prices have gone down and your home is no longer worth as much if you were to sell it, doesn’t mean that the replacement cost for your home has gone down.

If you have any questions about this, or are wondering if you have adequate insurance coverage for your home, feel free to call Kyle at 519-595-3246 and he would be happy to answer any questions you may have.

Can you insure a home for more than it's worth?

Yes. It is best to insure a home for more than its market value when you have special features such as slate roof or extravagant wood work. Keep in mind that a policy will only compensate the insured for the actual loss sustained. The law of indemnity indicates that a policy holder cannot financially profit from a loss but be put back in a similar position they were in before the time of the loss.

How much water damage insurance do I need?

There are numerous factors to consider when deciding what type and amount of water damage insurance you need. Below are descriptions of three coverage that are important for every homeowner and tenant to consider.

• Sewer/drain Backup Coverage: Sewer Backup coverage protects insured property from loss or damage caused by sudden and accidental backing up of water or sewage from a sewer, septic system, sump pit or drain. Sewer backup can be caused by a collapsed sewer line, clogged plumbing, sump pump failure, aging sewer system etc. Sewer backup losses can cause significant damage and be very costly to clean up. Basic home insurance coverage doesn’t typically include sewer/drain backup coverage, but Tradition Mutual Insurance offers this add-on coverage for a relatively low cost.

• Overland Water Coverage: Overland water coverage protects insured property from loss or damage caused by floods, the sudden and accidental entrance of surface waters, and the sudden and accidental entrance of ground water or the rising of the water table. If you live in a basement, have a finished basement or have possessions in basement storage this is a coverage that you will want to consider.

• Service Line Coverage: Service line coverage provides coverage in the event that a water line, exterior sewer line, or power and communication line freezes, wear tear, rust and corrosion, settling, expansion, cracking.

Is a shower, washing machine or dishwasher leak covered by homeowners insurance?

Yes. Standard and accidental leaks from household appliances are covered under standard water protection coverage. Keep in mind that this coverage is subject to your policy deductible.

Can you get flood insurance in Ontario?

Yes. Tradition Mutual Insurance offers overland water coverage to protect insured property from loss or damage caused by floods, the sudden and accidental entrance of surface waters, and the sudden and accidental entrance of ground water or the rising of the water table.

Does homeowners insurance cover burst pipes in yard?

Tradition Mutual Insurance offers Service Line coverage to protect insured property from loss or damage caused by a leak or break of an exterior sewer line or water service line. Unlike most coverages, Service Line coverage provides coverage even if the service line rupture was caused by wear and tear, as well as freezing and cracking. If you qualify for this coverage, the limit Tradition Mutual Insurance offers is $10,000 and the claim is subject to the policy deductible.

What does backup of sewer and drain cover?

Sewer Backup coverage protects insured property from loss or damage caused by sudden and accidental backing up of water or sewage from a sewer, septic system, sump pit or drain.

If I have liability coverage on my auto policy, why do I need it on my home policy too?

Yes. Liability coverage on your auto policy only covers you for an auto related lawsuit. The personal liability on a homeowner’s policy provides coverage for legal claims made against you not only arising out incidents that occurred on your property, but also for any claims arising out of your personal actions anywhere in the world. Some common legal liability claims include dog bites, slips, falls and neighbourhood damage.

How can I reduce my home insurance premium?

Home insurance premiums can be reduced by:

• Raising your deductible – A deductible is the amount that you would have to pay out-of-pocket in the event of a covered loss, before your insurance company makes payment for the remainder of the claim. A higher deductible usually means cheaper premium, but remember that you will have to pay that amount up front in case of a claim.

• Bundling home and auto- If you place your auto and home insurance with the same insurance company, there is a generally a multi-line discount available, which can provide significant savings.

• Improve home security- Most insurance companies offer discount for homes that have monitored fire, burglar or water alarm system.

• Long term discounts- If you have had your home insurance with one company for longer than three consecutive years, there is typically a long term discount that is offered.

Am I covered for a child away at college under my home insurance?

Yes. Under a comprehensive homeowners policy with Tradition Mutual Insurance, there is coverage up to $10,000 for a child away at college. Please give Kyle a call to see if your home insurance policy qualifies for our comprehensive home insurance package.

Am I covered for a relative in a nursing home under my home insurance?

Yes. Under a comprehensive homeowners policy with Tradition Mutual Insurance, there is coverage up to $10,000 for a relative in a nursing home. Please give Kyle a call to see if your home insurance policy qualifies for our comprehensive home insurance package.

Does my home insurance policy cover my valuable possessions such as jewelry or artwork?

There are special limits under your home insurance policy that provide coverage for valuable possessions such as jewelry and artwork. If the value of your valuable possessions exceeds the special limits of your homeowners policy, we recommend that you have a floater added to provide increased coverage for these possessions. If it is covered under a floater, you can chose to not have a deductible applied at the time of a claim.

Why are insurance companies interested in how a home is heated?

Insurance companies are interested in how a home is heated because there is a higher risk of loss with some heating systems. Wood and oil burning sources of heat are known to generate additional risk of causing a fire/loss, so insurance companies will often apply a surcharge to the premium to compensate for this extra risk. Most companies also have eligibility criteria for oil tanks regarding the age, type of tank and where is located that determines if they will provide coverage for your property.

What is a home insurance deductible?

A home insurance deductible is the amount that you would have to pay out-of-pocket in the event of a covered loss, before your insurance company makes payment for the remainder of the claim. A higher deductible usually means cheaper premium, but remember that you will have to pay that amount up front in case of a claim. If you have any questions about how to select a deductible that is right for your needs, call Kyle at 519-393-3246 today.

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Do insurance quotes hurt your credit?

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It’s only normal that Ontario residents would want to shop around at renewal or midterm to see if they are getting a competitive rate on their residential or auto insurance. You may wonder if quotes with a broker causes multiple insurance companies to check your credit history and thus lower your credit score. There is a chance of this but at Tradition Mutual Insurance Company we want to protect your credit score so do not run credit reports when quoting your home or auto insurance policy. While we process your insurance application, we do run your auto insurance history which shows us if there have been prior cancellations for non-payment but this report doesn’t affect your credit score. We hope this gives you peace of mind!

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Is home insurance mandatory in Ontario? 

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In Ontario, homeowner insurance is not mandatory under law. It is not illegal to not have house insurance. The Ontario government does not regulate home insurance like with car insurance. With that being said, most banks, mortgage lenders and investors require home buyers to provide  confirmation of home insurance during the closing process before advancing the finances. The same is true if a homeowner is obtaining a home equity line of credit.

However, if all liens and mortgages are paid off, the homeowner can chose to self-insure or chose to add a co-insurance clause to the policy to partially insure the house and insure a percentage (ie 20%) themselves. What happens if you don’t have home insurance you may ask? The homeowner would want to make sure that they have enough collateral set aside in the chance of complete loss.

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Does my property insurance cover me working from home? 

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Times are changing and many people in Canada and the United States are working from home and Ontario homeowners are no exception. Statistics tell us that there is a steady increase of people who have a work or office space in their residence. Many are using applications like zoom, skype and VPNs to make this possible. 

It is important to remember that a Kitchener home insurance policy is designed to cover personal or private activities and contents. This is particularly true if your business has valuable software, stock or products in your home.  This isn't to say that there isn't any coverage available under a home insurance policy for your commercial or business property stored in your home. If there isn't an exclusion for such, there is most likely a limit. 

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At Tradition Mutual Insurance, we provide a limit of $3,000 for business or commercial contents of those working from home under our standard homeowner's package, $10,000 under our comprehensive homeowner package and $15,000 under our premium homeowner package. 

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How do I estimate the replacement cost of my home? 

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Determining the proper replacement cost also know as rebuild cost for your home is important to know as a homeowner. This is the amount your insurance company will pay up to replace or repair your dwelling. When purchasing your home, your insurer may calculate how much the replacement cost of your home will be.

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Let’s proposes a scenario in which your home is completely destroyed by a fire. With the cost of materials and labour for your particular area/postal code, let’s say that your home costs $425,000 to rebuild. If your policy has a replacement cost of $375,000, that means you have experienced a shortfall of $50,000. Many would be surprised to know that a 2013 study by MSB indicates that 60% of homes are undervalued on their insurance policies by an average of 17%.

It is important to confirm what your insurance determines your replacement cost to be to make sure you will not experience this problem. I would suggests that you consult your city or municipality average cost of construction per square foot. You can do this by calling up a local contractor or construction company. If you are told that the average cost per square foot is $230 and you have a 1500 square foot home, the approximate rebuild plus any attached garage, basement finishes, pools, decks etc would be around $350,000. One should note that building prices are constantly inflating and fluctuating so one should be aware that a rebuild estimate is always an estimate. This can be particularly true in the event of rapid market/economic changes or during natural disasters.

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For this reason, I would also recommend that extended or a guaranteed replacement endorsement be added to your policy in the event that the actual rebuild comes to more than the rebuild estimate. If you qualify for the guaranteed replacement cost endorsement at Tradition Mutual Insurance Company, we waive any depreciation and cover the cost of repairs or replacement (whichever is less) even if it is more than the amount of insurance for the dwelling on the policy.

​If you would like a free rebuild estimate of your home, click the link below to get your estimate or call Kyle Wijnands at 519-393-3246 today. He can also check to see if you are eligible for our guaranteed replacement cost coverage. 

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