How Rising Home Values Could Impact Your Insurance Coverage

Most homeowners don’t really think about their home insurance policy. It’s a regular expense that comes out of the account. That’s it. 

Typically, the only time you’re taking a closer look at your insurance policy is when something goes wrong, or the premium has increased (which is likely why you’re here reading this post).

Alberta has some of the highest insurance premiums in Canada. From December 2005 to December 2025, home insurance premiums increased 391.6 percent. This increase is linked to the severe weather we’ve had over the last few years, with rising prices in replacement materials.

However, premiums are not just related to major weather events. If your home value has increased significantly in the last few years, there’s a good chance your insurance coverage needs to be bumped up.

The Disconnect Between Market Value and Replacement Cost 

Let’s clear something up first: Your home’s market value is what someone might pay for it in today’s market. Your replacement cost, on the other hand, is what it would take to rebuild your home from scratch (including materials, labour, permits, and more).

With inflation, supply chain disruptions, and the rising cost of skilled trades, replacement costs have gone up across the board, even faster than home values in some regions.

If your policy was set up years ago based on lower rebuild costs, if something were to happen to your home, you may not be fully covered.

Most lenders require home insurance for as long as you have a mortgage. That’s because your home is the collateral backing the loan. If something happens, both you and your lender are financially protected.

But if your coverage doesn’t reflect your home’s current replacement value, you could have a coverage gap, which means out-of-pocket expenses you didn’t plan for.

Some consequences of being underinsured:

• You might not receive enough to rebuild or repair fully after a loss

• You could be violating your mortgage agreement if the insurance is insufficient

• Outdated policy limits can slow down claims or result in denied portions

When To Do A Policy Check-Up

Here are a few signs it might be time to review your home insurance:

• You’ve renovated, upgraded, or added square footage.

• Local home prices have risen significantly since your last renewal.

• It’s been more than a few years since you last reviewed your coverage (we won’t judge).

• Your mortgage has been renewed or refinanced with a different lender.

• You’re unsure what your current policy actually covers (again, we won’t judge).

Even if you’ve paid down a chunk of your mortgage, making sure you have proper insurance protects the investment and equity you’ve built.

We Know Someone Who Can Help

While we specialize in mortgages, we happen to know someone who can help review your policy and perhaps save a few dollars as well.

Our sister company, Home Auto Life, has helped many of our clients save across the board on their insurance.

“I've had my one vehicle insured with Home Auto Life for about a year now, and we decided to ask about combining our home and other vehicle after getting a big increase in our premiums. Not only did we end up saving on my current vehicle, but we were able to save on our home and other vehicle - around $1,400 for our home insurance and another $780 for the vehicles per year. THAT'S HUGE! Thank you so much to Barb and the team for making that happen!”

Home Auto Life Client