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Home insurance in B.C.

Home insurance in British Columbia is one of the most important things you can purchase to protect your home, belongings and yourself from significant expenses. The right insurance policy means you won’t have to worry about costs when something unexpected affects your home. Home insurance covers fire, vandalism and the increasing impact of climate change, such as flooding. Different lenders offer different rates and coverage amounts, so doing a little comparison shopping is essential. LowestRates.ca compares the market for you and connects you to brokers that can provide you with a better rate.

We’ll try to answer some of the more pressing questions you might have about buying home insurance in British Columbia.

Why you should get home insurance in B.C.

Home insurance is not a mandatory requirement for owning a home. However, most lenders require it as a condition of the mortgage application process. Lenders want to know their money is protected in case of catastrophic losses, and home insurance helps reduce their risk of losing money.

Of course, more than protecting your lender, home insurance in B.C. protects you. Buying a home is likely one of, if not the most expensive, assets you will own. You’ll want to protect it and the belongings you have collected from damage or loss. Home insurance also protects you from personal liability should someone get injured on your property or if you cause damage to another person’s property. Consider your B.C. home insurance as a peace of mind policy that lets you sleep at night.

Is the B.C. home insurance industry regulated?

Unlike auto insurance, the cost of home insurance prices isn’t regulated by any government body in B.C., or in the rest of Canada for that matter. However, there are bodies that regulate business practices and licensing.

The B.C. Financial Services Authority (BCFSA) is the government regulator overseeing financial institutions operating in B.C. While the Insurance Council of British Columbia is responsible for licensing insurance agents and adjusters, BCFSA is the regulatory body for insurance companies that provides oversight and guidance, which ensures a fair and transparent process for the public. Its website offers a breadth of information and links related to the insurance industry and resolving disputes.

Types of home insurance in B.C.

There are four types of home insurance you can get in B.C.:

Comprehensive - The highest level or most coverage you can purchase. It protects the building and its contents against all risks or perils except those you expressly exclude.

Broad - Offers coverage for the building and some of its contents. Contents are only covered against named perils that you must select.

Basic - This type of policy provides minimal coverage for your home, covering only stated perils like fire, wind, theft and vandalism. Don't count on basic insurance to cover anything beyond the risks named in your policy.

No-frills - Offers basic coverage for properties that are hard to insure (e.g., homes with numerous structural issues).

Common optional coverages and endorsements - Also known as riders or add-ons, optional coverages protect you from additional events that can provide greater protection, usually at an additional cost. Some endorsements can include:

• Sewer backup
• Home-based business
• Overland flooding
• Guaranteed replacement costs
• Valuable items (including jewelry or art)
• Identity theft

Exclusions - Home insurance exclusions are specific types of damage or loss that your Alberta home insurance won't cover. Endorsements provide coverage for scenarios that are typically categorized as exclusions.

Risk factors for homeowners in B.C.

Because of its location and the chance of a natural disaster occurring at any time of the year, B.C. residents should consider these two specific risk factors:

Earthquakes

B.C. is at a higher risk of experiencing earthquakes than other parts of Canada. Within B.C., Victoria and Vancouver are particularly vulnerable to a severe earthquake within the next 50 years, as both cities are situated on the edge of two major tectonic plates. Earthquakes cause shaking, impacting your home's structure and damaging its contents. Standard insurance policies do not cover loss or damage to your home due to an earthquake, meaning you must add coverage at extra cost.

Regions at highest risk: Offshore earthquakes are frequent along B.C.'s coastline. The cities most likely to feel the impact of seismic activity include Prince Rupert in the north and Nanaimo, Victoria, and Vancouver in the south.

Forest fires

In the first half of 2023, the B.C. Wildfire Service has spent more than $105 million on fighting fires. That is well ahead of trends at the same time in previous years. Also, Insured damage for severe weather events across Canada reached $2.1 billion in 2021, according to Catastrophe Indices and Quantification Inc. In B.C. specifically, a wildfire in Lytton caused $102 million in insured damages.

The good news is that most policies cover fire damage from fire as long as there's proof that it was not set intentionally. It includes wildfires and fires caused by natural disasters. Additional living expenses will also be compensated in the event of a mandatory evacuation order.

Regions at highest risk: The number and severity of forest fires in B.C. is rising annually. Any community that's in proximity to wooded areas is vulnerable to fires.