How Much Does Home Insurance Cost in Alberta?

Why does home insurance go up? The cost of home insurance can be elusive and confusing at times.

How much does home insurance cost in Alberta on average, and why does it cost what it costs?

There are many factors that affect home insurance, and today, we’ll look at a few of the most important elements that affect your home insurance premiums.

First of All, What is Home Insurance?

Home insurance is a policy that protects homeowners from losses and damages related to their property and belongings.

Home insurance also covers owners for any liability they may be facing with accidents that occur on their property.

Unlike car insurance, you aren’t required to have home insurance in order to own and live in a home; however, as you can see, home insurance is a very valuable thing to have — it literally covers the cost of your valuables. 

Home insurance costs are as variable as the homes they cover, and as such it’s important to know what has an impact on your home insurance policy, and what does not.

So, which factors affect the cost of house insurance the most in Alberta?

1. Your Neighbourhood & Location

The first and arguably most important factor that impacts your home insurance costs is your neighbourhood. Where in the city you live has a huge impact on your home insurance.

Things like the crime rate in your neighbourhood, as well as the claim rate, change how much your insurance will cost. Did you know? The Edmonton Police Service has actually build an interactive tool, Neighborhood Crime Map, that maps out recent crimes in every neighbourhood in Edmonton. 

Other factors related to your neighbourhood that affect your insurance costs are things like how close/far you are to a fire station and police station, distance from a fire hydrant, and if you’re close to a body of water.

Being close to a fire station with a fire hydrant nearby can significantly reduce your home insurance costs. That’s because you’re less likely to have as significant damage in the case of fire, as firefighters will be able to get to you quicker and start helping sooner.

Factors that affect your home insurance premiums:

• The address of your property
• Fire protection (hydrant, fire hall, or none)
• Whether the homeowner has other lines of business with the same insurance provider (ie: discounts are given to individuals who have all their insurance with the same provider)

2. Your House

The house itself changes how much you pay for house insurance, more particularly, how much it would cost to re-build your home. The fancier the building, the more your home insurance costs.

It’s not just size (although square footage does matter), it’s also the materials used to build the house. If your siding is brick interlay compared to simple vinyl, you’re likely paying more.

The same goes for what’s inside the house — hardwood floors, top-of-the-line appliances, and granite countertops are all things that can increase your home insurance.

Luxuries like having a pool or hot tub can also increase your home insurance, as home insurance covers liabilities if someone is injured or killed on your property. Pools are more dangerous than grass, thus increasing your home insurance.

Factors that affect your home insurance premiums:

• The home’s year of construction
• How recently the hot water tank and roof last replaced (for homes over 25+ years old)
• The existence of a sump pump and/or mainline backwater valve
• Number of units in dwelling (ie: is there a rented basement suite)

3. Your Belongings

Contrary to what you might believe, home insurance isn’t just about the home. Home insurance also covers everything inside your home.

Your collection of antiques will require better and more insurance than the IKEA furniture in the basement, just as all your jewelry, electronics, books, and much more.

It’s important to properly appraise your belongings even though it can cost you more month-to-month, in the case of an emergency, you want to ensure your insurance covers you completely.  

4. Security Features

Considering having a home alarm system installed? Besides offering peace of mind to you, the homeowner, security systems can also reduce your home insurance premiums.

Not only do home security systems come with badges or stickers to include on the exterior of your home which work to deter criminals, but the local authorities will also be dispatched should a Break & Enter ever occur.

Both of these benefits aid in reducing what you pay for home insurance in Alberta.

5. Natural Disasters

Just like your neighbourhood can impact your house insurance, so can your city. Home insurance is impacted greatly by how greatly affected your city is by natural disasters.

Places that have a tendency to flood or get damaged by storms are more expensive to ensure than places that are not. It just so happens that homes in cities by the ocean cost more to ensure than homes on the prairies, because being near the ocean can put you more at risk for earthquakes, hurricanes, and tidal waves.

The people of Pompeii chose a risky place to live, right next to an active volcano, even though the farming was so great. It would cost a lot more to insure a home in Pompeii than in Edmonton, due to the risk discrepancies of the two cities.

6. Who You Are

Demographics play a key role in determining all kinds of insurance, home and car insurance being the most common.

It’s pretty common knowledge that in Alberta, car insurance rates significantly drop after an individual turns 25.

Demographics also impact home insurance. Demographics can be used to understand the statistical risk associated with an individual or family, and how likely property damage is to occur.

Younger, single people tend to have more risk associated with them than older, attached people, statistically speaking.

The movie Along Came Polly features a risk analyst who determines how much risk is associated with someone based on their demographics — although the story is completely fictional, his occupation is completely real.

Factors that affect your home insurance premiums:

• The homeowner’s age
• The homeowner’s insurance history, including claims in the past
• The homeowner’s occupation
• The number of years at current location

7. Your History

Credit score impacts more than just ability to get a loan. Your credit score is actually one of the larger factors that can impact the cost of home insurance.

If you have a poor credit score, you will likely end up paying more for insurance.

 It all comes down to associated risk with the people being insured, regular payments are required for the insurance industry, so an individual with a poor credit rating would be counted as higher risk.

Further, your insurance history is another factor that is taken into accounting for how much your home insurance premiums will be in Alberta.

Factors that affect your home insurance premiums:

• The homeowner’s insurance policy payment history
• The homeowner’s insurance history (ie: insurance claims made in the past)
• The homeowner’s credit history

Home Insurance in Edmonton

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