A lot of people wonder if having home insurance in Ontario is a legal requirement. Short answer: no.
However, life is unpredictable, not to mention expensive, so not having home insurance can end up costing you way more than your premiums ever would have, if the unthinkable were to happen. Learn more and get a quote here.
Here are some things to consider before you cancel your home insurance policy.
CAN I CANCEL MY ONTARIO HOME INSURANCE ANYTIME?
You have the right to cancel your home insurance at any time that you choose. Keep in mind that depending on where you are in your contract, you may incur a hefty financial penalty for doing so.
There are times when it is better to cancel your policy if you choose. Loans Canada lists these as:
- In the middle of your contract; if you are unhappy with your coverage, you can choose to shop around, however, this option will usually have a penalty.
- At the end of your contract; this is the best option because it is essentially as if you are ending the contract naturally so no fines/fees will be incurred.
- During the recission right; 10-15 days after you sign most contracts is a grace period also known as the recission right, wherein you can cancel your policy, penalty-free. Be sure to discuss this with the insurance agent or broker before completing the application to inquire if this applies, it may not so you’ll want to be sure.
HOW MUCH DOES IT COST TO CANCEL MY ONTARIO HOME INSURANCE?
You can expect to pay between 2-7% of your premium depending on where you are in your contract.
If you go to websites like Isure.ca and use their cancellation calculator, you will be able to determine how much it will cost to cancel your policy.
You will be asked to complete a short form and based on the information that you provide, the calculator will give you an estimate.
HOW TO CANCEL YOUR HOME INSURANCE IN ONTARIO
Cancelling your policy is usually pretty straightforward.
- You will need to inform your insurance broker or agent, usually with a letter or cancellation form, that you would like to cancel your policy (a cancellation form is generally included in your renewal insurance papers each term)
- Ask your broker or agent if there are refunds for any prepaid premiums. If there are, the company will take a penalty from this and return the difference to you
- Once the cancellation terms are agreed upon by both parties, get them in writing and sign to solidify
It is important to note that unless you are going from owning a home to renting a home, it is not necessarily advised to go without a homeowner’s insurance.
There are too many unexpected things that could happen that would put you really out of pocket to fix, so it is better to have it than not. We strongly recommend keeping a policy in force even if you become a renter, it will offer protection for your personal belongings (contents) and provide liability protection as well with just a simple change to your property insurance policy.
WHY IS THERE A CANCELLATION FEE FOR HOME INSURANCE IN ONTARIO?
Cancellation fees are in place as a penalty for breaking the contract for the insurance as well as to cover administrative costs of processing the cancellation. As mentioned before, they are less the closer you are to the end of your contract, or even non-existent if you wait until your contract is up.
Always remember to talk to your agent before you make a decision this big. There are many things to consider, the largest thing being the well-being of yourself and your family. If something happens to your home, the last thing you want to worry about is not having home insurance to cover the damage so make sure to do your research and talk to the professionals!
Erie Mutual Insurance proudly serves the commercial insurance, farm insurance, home insurance and auto insurance needs of members throughout Southern Ontario including Haldimand, Niagara and Hamilton.
Please don’t hesitate to contact us with any questions you may have about this or any other topic related to your insurance.
