for New Buyers:
What to Know Before Closing
Home insurance doesn’t make the headlines the way mortgage rates or bidding wars do — but it’s one of the few things that can physically stop your closing from happening. I’ve seen buyers scramble in the final week before closing because they waited too long to apply, or discovered mid-process that their new home had a feature that made it difficult or impossible to insure under standard terms. This guide walks you through everything you need to know before closing day in Ontario.
The logic is straightforward: the property serves as collateral for your mortgage. If the home burned down the night before closing, the lender needs assurance their security interest is protected. That proof comes in the form of an Insurance Binder — a temporary certificate confirming coverage is in place — which your lawyer submits as part of the closing package.
Condo buyers note: the condo corporation carries its own master insurance policy, but it only covers the building’s common elements and structure. Your individual unit’s interior finishes, personal belongings, and personal liability all require a separate condo unit owner’s policy (sometimes called “walls-in” coverage).
Dwelling Coverage — protects the physical structure of your home against named perils: fire, lightning, wind, hail, explosion, vandalism, and more. Ensure your coverage amount reflects replacement cost value (RCV), not market value — what it costs to rebuild, not what you paid.
Contents Coverage — protects your personal belongings inside the home: furniture, electronics, clothing, appliances. High-value items like jewelry, art, or collectibles typically require scheduled endorsements (additional riders) to be fully covered.
Personal Liability Coverage — covers you if someone is injured on your property and sues you. Standard policies offer $1,000,000 in liability; upgrading to $2,000,000 is worth the modest additional premium for most homeowners.
Many policies also include Additional Living Expenses (ALE) — covering hotel or rental costs if a covered loss makes your home temporarily uninhabitable.
Aluminum wiring — common in homes built between 1965–1975. Higher fire risk due to oxidation at connection points. Most insurers require a licensed electrician’s inspection or full rewiring before binding coverage.
Knob-and-tube wiring — found in pre-1950s homes. Many major insurers refuse coverage entirely; others require replacement.
Oil tanks — whether interior or buried underground, older oil heating systems raise contamination liability concerns. Some insurers require decommissioning certificates.
Aging roofs — roofs over 20–25 years old (depending on material) may be excluded from wind/hail coverage or require immediate replacement commitments.
Vacancy — if the home will be unoccupied for more than 30 consecutive days after closing, you’re typically required to notify your insurer. Coverage terms change significantly for vacant properties.
Right after condition waiver: contact 2–3 insurance providers or an insurance broker. Provide the property address, year built, square footage, heating type, roof age, and any known features like a pool or home-based business.
3–4 weeks before closing: confirm your chosen insurer, finalize coverage amounts, and submit your formal application. Make sure the effective date matches your closing date exactly.
1–2 weeks before closing: obtain your Insurance Binder or Certificate of Insurance. Forward this to your real estate lawyer promptly — they need it to prepare closing documents.
Closing day: your policy activates, the lawyer completes the transfer, and you receive the keys.
Major providers to compare in Ontario include Intact, Aviva, Economical, Wawanesa, and TD Insurance. Working with an independent insurance broker allows you to compare multiple carriers simultaneously — particularly useful if your property has any of the red-flag features noted above.
Ontario Buyers
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