Do I need additional insurance for my accommodation?
Standard home insurance in Calgary provides basic protection against many risks, but has significant limitations that can leave homeowners unprotected in certain situations. The average cost of home insurance in Calgary was $2,374 in 2024, down 4.5% from the previous year. However, this basic coverage may not be sufficient to cover all the potential risks faced by homeowners in the region.
Basic water damage coverage protects against accidental damage caused by sudden plumbing failures, burst external pipes, and appliance overflows. It excludes damage from flooding, sewer backups, intentional heating shutdowns, gradual seepage, and damage during construction or prolonged vacancy. These exclusions create significant gaps in coverage that require additional insurance products.
Enhanced water damage coverage includes all basic protections plus additional coverage for sewer backups, repair of broken external water and sewer lines, flooding from heavy rain or snowmelt, and sudden damage from underground water. It excludes tsunamis, tidal waves, continuous seepage, damage from construction or vacancy, and clogged water pipes.
Flood risk and the need for additional coverage
Flood history in Calgary
The 2013 Calgary flood caused $5 billion in damage, of which only $1.8 billion was covered by insurance. This massive insurance payout prompted the industry to create a specific product—residential flood coverage—beginning in 2015. This event highlighted the critical importance of additional flood coverage for homeowners in Calgary and surrounding areas.
Floods occur five times more often than wildfires in Canada and are the second most common natural disaster. Even a few inches of water can damage your home, yet many homeowners do not have flood insurance. This is especially true in areas near the Bow and Elbow rivers, which were hardest hit in 2013.
Types of flood coverage
Flood insurance is available to almost all homeowners, condo owners, and renters. However, it is not always available in high-risk areas, but if it is available in your area, you should consider adding it to your home insurance policy.
Reddit users report flood coverage costs ranging from $2,000 to $7,000 per year for properties near rivers in flood-prone areas. One user noted that flood insurance in the Sunnyside area costs around $8,000 per year, reflecting the high risks for properties near rivers.
Water flow and groundwater
Water flow flood coverage applies to flooding from bodies of water and surface accumulation. The most common causes include rainstorms and snowmelt. Even if you don't live near a body of water, flood insurance is a good idea, as floods are often caused by heavy rains.
Groundwater can enter your home through the foundation, floors, or basement walls due to sudden accumulation of water after heavy rain or thaw. This coverage is especially important for homeowners with basements in low-lying areas of Calgary.
Sewer backup coverage
Why you need special coverage
Sewer backup coverage can be added to your home insurance policy, but it is not usually included in a standard policy. It covers sewage system backups through your plumbing and water damage to your home. This coverage is a budget-friendly addition to your policy and is highly recommended for all homeowners.
When the storm sewer system overflows, sewage can rise through toilets and drains and damage surrounding areas. This type of damage can be expensive to repair and hazardous to your health. Homeowners may notice that a toilet or drain in the basement is overflowing.
Cost and benefits
Most homeowners can add sewer backup insurance as an endorsement to their home insurance policies. The RATESDOTCA quote tool assumes that you want flood protection, including sewer backup coverage, as well as flood and groundwater protection.
In general, it is worth getting sewer backup coverage. Although you will get slightly higher quotes for a policy that includes it, the cost of repairing flood damage is likely to be expensive. Owners whose property is several thousand feet above sea level and unlikely to experience sewer backup flooding may not consider coverage worthwhile.
Hail and storm protection
Alberta's unique risks
Alberta lies in a region often referred to as “Hail Alley,” stretching from High River through Calgary and north to Edmonton. Warm, moist air from the south meets cold mountain air from the Rocky Mountains, creating ideal conditions for frequent and powerful hailstorms.
In 2024, a severe, record-breaking hailstorm in Calgary resulted in over $2.8 billion in insured losses, making it one of Canada's most expensive weather events. According to the Insurance Bureau of Canada, “by the end of the storm, nearly one in five homes in Calgary had been affected”. This storm surpassed the records set in 2020 for the same type of losses.
Standard hail coverage
Most standard home insurance policies in Alberta cover hail damage, but with some important caveats. “It's not like a sewer backup or flooding — hail is included in your standard homeowners policy,” says Anne-Marie Thomas, director of consumer and industry relations at the Insurance Bureau of Canada.
Covered:
- Damage to the roof and exterior (often subject to depreciation or roof age clauses)
- Detached structures such as garages and sheds
- Interior damage caused by hail that penetrates the home
Not covered:
- Damage due to lack of maintenance
- Gradual wear and tear
Special considerations for vehicles
Hail damage to vehicles is included in auto policies, but only if you have purchased comprehensive or full coverage. This means that if you only have the minimum required coverage, your vehicle will not be covered for any hail damage.
Earthquake insurance
Risk assessment in Alberta
Most basic home insurance policies do not cover earthquake damage; you must add this to your policy. While earthquakes can occur in all provinces, certain areas have a higher probability of experiencing damaging earthquakes. Even places you might not expect can have moderate risk, such as the western shore of Lake Ontario and western New Brunswick.
According to Natural Resources Canada, more than 5,000 earthquakes shake Canada every year, an average of 14 earthquakes per day. While most are small and barely noticeable, 50 are felt every year.
Cost of earthquake insurance
The cost of adding earthquake coverage to an existing home insurance policy varies across the country. For example, earthquake insurance for a home and its contents valued at $300,000 in Toronto costs approximately $15 per year. For comparison, the same policy costs $332 per year in Vancouver.
In Calgary, the risk of earthquakes is relatively low compared to other parts of Canada. However, earthquake insurance may still be a wise addition for complete peace of mind.
Wildfire and smoke coverage
Standard fire coverage
All standard homeowners and renters insurance policies cover damage caused by fire, including wildfires. They also include mass evacuation coverage. Almost all property insurance policies provide fire coverage, including but not limited to wildfires.
TD Insurance notes that its home insurance policy includes fire coverage. This means that if your home is damaged by a wildfire, your policy will help cover the cost of replacing items that may have been damaged, such as furniture, appliances, electronics, and clothing.
Additional living expenses
Your home insurance coverage will also help repair or rebuild your home after a wildfire and provide additional living expenses if you need temporary housing. TD Insurance includes up to 90 days of additional living expenses if you and your family are ordered to evacuate the area.
Smoke coverage
Most home insurance policies also cover smoke damage. Our home coverage will cover damage caused by fire, explosion, and smoke following an earthquake. This is especially important in Alberta, where smoke from wildfires can travel long distances and damage property even far from the actual fire.
National Flood Insurance Program
Upcoming changes in 2025
The long-awaited national flood insurance program is scheduled to be implemented in 2025, as enrollment in supplemental flood insurance remains low. Homeowners in flood-prone areas could face annual premiums of up to $900 under this plan. Those who decline coverage risk being deemed ineligible for disaster assistance in the event of a flood.
The Federal Flood Insurance and Relocation Task Force has put forward several recommendations, including mandatory coverage for properties in high-risk areas. Proposed annual premiums may range between $700 and $900, with a $5,000 deductible and maximum reimbursement of $300,000.
Cost of additional coverage
Factors affecting cost
Premiums for different types of additional coverage depend on many factors, including the likelihood of a specific risk in your area, the construction of your home, the number of stories, coverage limits, and deductibles. In some higher-risk areas, consumers face increased premiums, deductible changes, and even reduced ability to obtain coverage.
Western Financial Group emphasizes the importance of talking to an insurance expert about the right amount of coverage at the right price for you. They have earthquake insurance experts across Canada.
Cost comparison
For a typical property in Calgary, additional premiums can vary significantly:
- Earthquake insurance: $15-50 per year for low risk
- Sewer backup coverage: $100-300 per year
- Flood coverage: $2,000-7,000 per year for high-risk properties
- Enhanced water coverage: $200-500 per year
Recommendations for Calgary homeowners
Assess your risk
Start by assessing the risks specific to your location and home. Homeowners near the Bow and Elbow rivers face higher flood risks. Homeowners in hail-prone areas, such as northwest Calgary, may want additional coverage for structural damage.
Mandatory minimum coverage
A minimum sewer backup coverage is highly recommended for all homeowners in Calgary. This is a relatively inexpensive way to protect yourself from potentially costly basement damage. RATESDOTCA assumes you want this coverage in your quotes.
Recommended additional coverage
For homeowners in high-risk areas:
- Required: sewer backup coverage
- Recommended: flood coverage (if available)
- Consider: enhanced water coverage
- Optional: earthquake insurance for complete peace of mind
For homeowners in low-risk areas:
- Recommended: sewer backup coverage
- Consider: basic flood coverage
- Optional: earthquake insurance
Regularly review your coverage
With extreme weather events on the rise, it's important to review your coverage regularly. The RATESDOTCA report indicates over $7.8 billion in insurance losses caused by severe weather events in 2024 — more than double the Insurance Bureau of Canada's figures for 2023.
“Given the severity and increasing frequency of extreme weather patterns and the rising cost of replacement, it is critical for homeowners to ensure their policies provide the necessary amount of coverage if the worst happens,” said Daniel Ivans, broker and insurance expert.
Additional home insurance in Calgary is not a luxury, but a necessity for most homeowners. The region's unique natural hazards — from historic flooding to record-breaking hailstorms — create significant gaps in standard coverage. Minimum sewer backup coverage should be considered by all homeowners, while those living in high-risk areas near rivers should seriously consider full flood coverage, despite the high cost. With the introduction of a national flood insurance program in 2025 and increasing extreme weather events, early adoption of additional coverage can provide both financial protection and peace of mind for homeowners in Calgary.