Is Home Insurance Mandatory in Ontario? (2026 Guide)
Do you need home insurance in Ontario?
In most cases, yes—because it’s required by lenders and landlords.
Home insurance isn’t legally required in Ontario, but it’s often mandatory in practice. Most mortgage lenders, condo boards, and landlords require you to have personal property insurance as a condition of financing or occupancy. In other words, getting housing in Ontario often involves shopping for a new home insurance policy.
If you’re not sure whether you need home insurance, check your mortgage agreement, condo bylaws, or lease.
Do mortgage lenders require home insurance in Ontario?
In Ontario and all of Canada, mortgage lenders typically require proof of an active home insurance policy on the property before closing.
Until your mortgage is paid off in full, your mortgage lender holds the right to repossess your house if you default on loan payments. This financial claim gives the bank an insurable interest in your house, meaning that they can require you to carry insurance to guarantee that the home’s value will be restored if it’s damaged by a covered peril.
When you get home insurance with a mortgage, your policy will include a loss payee clause that establishes your lender’s insurable interest in the property and allows your insurer to make payments for any loss directly to the bank as well as to you.
Home insurance vs. mortgage default insurance
Home insurance is not the same thing as mortgage default insurance, a financial product that’s required for home purchases when a down payment worth less than 20% of the home’s purchase price is made. It protects your lender from financial loss in the event that you stop making mortgage payments and is only required for homes worth less than $1.5 million.
Home insurance, on the other hand, protects both you and your lender from financial losses associated with damage to your home, theft, or other loss of property value caused by sudden, accidental threats like fire or burglary.
When to buy home insurance when buying a home
You must buy and activate a home insurance policy before closing on your home and send the proof of insurance to your mortgage lender.
In most cases, you’ll need to shop for home insurance after your offer on a home is accepted and before closing officially takes place. Depending on your timeline, you could have a few weeks or months to shop, or just a few days.
Can you cancel home insurance while you still have a mortgage?
If you have an active mortgage, you can’t cancel home insurance without significant risks and financial penalties.
Because active home insurance coverage is a condition of your mortgage, both you and your lender will be listed on your policy. If you cancel the policy without activating another policy (e.g., switching insurers), your lender will be informed. They then have the right to purchase “force-placed” insurance on your behalf, which may cost significantly more than the policy you canceled.
Bottom line: All mortgage lenders in Ontario require buyers to provide proof of home insurance before closing on a house.
Do you need home insurance in Ontario?
In most cases, yes—because it’s required by lenders and landlords.
Home insurance isn’t legally required in Ontario, but it’s often mandatory in practice. Most mortgage lenders, condo boards, and landlords require you to have insurance as a condition of financing or occupancy. In other words, getting housing in Ontario often involves shopping for a new home insurance policy.
If you’re not sure whether you need home insurance, check your mortgage agreement, condo bylaws, or lease.
What happens if you don’t have home insurance in Ontario?
If you don’t have home insurance in Ontario, your mortgage could fall through, or you could face penalties like forced insurance, higher costs, or eviction.
Penalties from your lender/landlord
If you don’t buy home insurance when buying a house, you won’t be able to close on the home in the first place. If you cancel your coverage after taking possession of the home, your mortgage lender may take out a policy on your behalf and add it to the cost of your mortgage payments. For condo owners and tenants, your condo association could sue, or your landlord may try to end your lease.
Out-of-pocket costs
If something happens to your home while you’re uninsured, you’ll be responsible for paying the full cost of repairs or replacements out-of-pocket, plus the penalties listed in your contract. Worse yet, if you’re forced to reinstate a home insurance policy after cancelling prematurely, you’ll likely face higher premiums as a result.
How much home insurance do you need in Ontario?
The type and amount of home insurance coverage you need—and when it should start—should be listed in your mortgage, condo purchase, or rental agreement. Typically, your lender, condo board, or landlord will ask for proof of insurance before you move in.
Home insurance requirements usually specify at least $1 or $2 million in personal liability coverage. Liability covers the cost of addressing any unintentional injuries or property damages to visitors to your home, and paying legal fees if the injured party sues. You’ll also need enough dwelling coverage to pay the full estimated cost to rebuild your home if it’s destroyed, often known as replacement cost coverage.
As for condo owners, a mandatory policy will typically provide enough dwelling insurance to repair the condo unit and the value of any upgrades or renovations you’ve made. Renters insurance tends not to have dwelling coverage requirements, and it’s rare for any agreement to specify how much contents coverage you need to repair or replace your personal belongings.
Here’s a quick run-down of the types of home insurance coverage available and whether they’re considered standard features or add-ons:
* Applies only to the interior of the condo unit.
Make sure to check your insurance policy documents for named perils, exclusions, and other coverage details.
Dwelling coverage
Dwelling coverage pays for damage to your home’s physical structure: walls, roof, floors, windows, and built-in furniture or home systems (e.g., cabinetry and HVAC). Attached structures like attached garages are included under dwelling coverage.
Your dwelling coverage limit should be equal to the estimated cost to rebuild your property with similar materials and features if it’s entirely destroyed (i.e. replacement cost). Guaranteed replacement cost coverage, which pays the full amount of any rebuilding costs (minus a deductible) even if it exceeds your policy’s stated limit, is common.
Other structures coverage
Other structures coverage pays to repair detached structures on your property, such as a detached garage, fence, gazebo, or other outbuilding.
Your other structures coverage limit is typically 10% of your dwelling coverage limit.
Contents coverage
Contents coverage pays to replace your personal belongings (e.g., clothing, furniture, and electronics) if they’re damaged by a covered peril or stolen. Contents coverage may cover the full replacement cost needed to replace your items with new items of like kind and quality, or only the actual cash value of your property minus depreciation.
Your contents coverage limit is typically 50–80% of your dwelling coverage limit.
Additional living expenses/loss of use
Additional living expenses (ALE) or loss of use coverage pays for extra living expenses you incur on top of your regular living costs if your property is temporarily uninhabitable due to a covered peril. Loss of use coverage can pay for hotel stays, restaurant meals or food delivery, laundry services, and even pet boarding, but it won’t cover ongoing routine costs like mortgage or rent payments.
Your loss of use coverage limit is typically 20–30% of your dwelling coverage limit.
Personal liability coverage
Personal liability coverage pays for other people’s medical bills, property repairs/replacement, and related costs if you’re legally responsible for an injury or damage to someone else’s property anywhere in the world. It also covers legal costs if you’re sued in such a case.
Your personal liability coverage limit typically starts at $1 million, but can be raised to as much as $5 million and may be extended further in some circumstances.
Key endorsements
A few key endorsements may be available to supplement or add back coverage that’s typically excluded from home insurance policies. Standard optional endorsements include:
- Sewer backup coverage: Covers water damage caused by a sewer backup event, which is excluded from standard home insurance policies
- Overland water coverage: Covers water damage caused by overland flooding, which is excluded from standard home insurance policies
- Earthquake coverage: Covers damage to your home caused by earthquakes, which is excluded from standard home insurance policies
- Claim forgiveness: Ensures that your home insurance premium won’t go up as the result of your first covered claim
Do you need home insurance for a condo or rental in Ontario?
If you own a condo or rent an apartment or house in Ontario, you don’t need to buy home insurance.
That said, you’ll still likely need some form of property insurance to meet the requirements of your condo corporation or landlord. Condo owners typically need condo insurance to finalize their purchase, while many landlords’ rental agreements require tenants to purchase tenant or renters’ insurance.
Property insurance for condo owners: Condo insurance
Most condo corporations in Ontario require individual unit owners to purchase a condo insurance policy to cover their unit. Your condo insurance policy will cover your personal property, loss of use, and personal liability, and will also include dwelling coverage for the interior of your unit. The physical structure of the building is covered by the property insurance held by the condo association or corporation.
Property insurance for renters: Tenant insurance
Landlords in Ontario may require prospective tenants to purchase tenant insurance as a condition of occupancy. Tenant insurance only includes contents, loss of use, and personal liability coverage. Coverage for the physical structure of your unit (both the interior and the exterior) comes from your landlord’s property insurance.
How much does home insurance cost in Ontario?
The average cost of home insurance ranges from $1,000 to $2,000 per year in Ontario, or approximately $83 to $167 per month.
Your costs will vary depending on the type and amount of coverage you choose, as well as the location, features, and construction of your home. The more expensive your house is to repair or replace, the higher your home insurance premiums. You’ll also pay more to insure your home if you have a claims history.
For condo owners and tenants, the cost of your policy mostly depends on how much coverage you choose, as well as additional coverage options. For example, if you’re a fine art collector, you’ll have to pay extra to place higher coverage limits on the most valuable pieces in your collection.
If you own a car, you can reduce the cost of home, condo, or tenant insurance by bundling your property policy with your auto insurance policy.
“Bundling” insurance policies simply refers to buying multiple policies from the same insurance company. Home and car insurance bundling discounts can reduce your premiums by 20% or more and streamline the process of getting paid in the event of a disaster that damages both your home and your vehicle.
FAQ: Is home insurance mandatory in Ontario?
This article is for general information only and is not insurance or legal advice. Examples and any sample quotes or rate ranges are illustrative and do not constitute an offer or guarantee of coverage, price, or eligibility. Actual coverage, discounts, and premiums depend on your individual circumstances and the insurer provider; if there is any discrepancy, your policy and insurer documentation govern. For advice about your situation, speak with one of our licensed insurance professionals.