Transparency and your insurance policy

• What is required of you?
• Exclusions
• Deductibles
• Paying for insurance
• Making a claim

To make them easier for you to understand, we’ve written our home insurance policies in simple language — see for yourself by downloading a sample.

Let’s start with the basics. Home insurance policies from Square One are comprehensive. That means they insure against everything except for a list of exclusions. We’ll go over the list, but first, we’ll take a look at the things your insurer requires of you. Then we’ll cover deductibles, how to manage your policy, and how to make a claim.

What is required of you?

Buying insurance isn’t like buying a candy bar. Firstly, not everyone can buy insurance. If the risk is too great, insurance providers can simply refuse coverage. Secondly, buying insurance requires something from you in return. You will have to provide certain information when you apply for a policy, of course. But, if the provider accepts your application and sells you a policy, you have a responsibility to keep them informed if certain things change in the future.

The good news is that there are only a handful of situations where something is required of you:

Initial application

The most important thing to keep in mind when buying insurance is to be honest. Your insurance provider can’t give you the coverage you need if you lie about what your needs are. Sure, lying about the condition of your home might save you a few bucks a month, but what if those lies result in your claim being denied? Yes, there are a lot of questions on an insurance application. But try to remember that every question on that form is there for a reason. If an insurance provider asks a question, then your answer matters.

Material changes

There are some circumstances where you need to contact us and let us know about certain changes. Here are some examples:

Let’s say you’re replacing the bathroom in your home. While you’re at it, you decide to upgrade the kitchen and replace the carpets with hardwood floors. If the value of your renovations is more than $25,000, then you must contact us to let us know of the changes. We’ll change the value of your home on the policy to reflect the changes you’ve made. That way, if your house (and the new bathroom inside it) burn down, then your insurance will cover the cost of replacing the new bathroom, not the old one.

You also need to inform us if there is a change of occupancy in your home — if you decide to rent out your basement to a tenant, for instance — or if your home undergoes construction or renovation. These changes represent a higher risk for insurers, and many will simply refuse coverage. Square One offers a wide variety of coverages, including coverage for homes under construction or renovation, but it’s essential that you inform us of these changes. That way, we can update your policy and keep you protected.

Proof of value

At Square One, we let you choose the coverage that suits your needs. Optional coverage is available for specialty property, such as jewellery, watches, fine arts, and collectables. If you select coverage for specialty property, then you usually do not need to provide proof of value for each item of specialty property.

However, without proof of value, the maximum we will pay for any individual item is limited to $3,000 to $6,000, depending on the type of property. If you have any individual items worth more than that, make sure you provide us with proof of their value, such as an appraisal document or a receipt.

Leaving your home in winter

Under certain circumstances, your policy excludes water damage that occurs if pipes burst after they become frozen during the winter.

To avoid this, you need to do one of two things if you’re leaving your home for more than seven days: either leave the heating on while you’re away, or drain your pipes. While this might seem like overkill, a burst pipe can do a lot of damage, so if you know you’ll be away from home, take precautions and stay covered. Learn more about insurance and preventative measures for frozen pipes on this page.

If you require emergency medical treatment and are forced to leave your home suddenly, then you’ll still be covered.

Making a claim

When submitting a claim, it’s your responsibility as a policyholder to do so as quickly as possible following a loss.

This gives us the opportunity to take quick action by inspecting the loss and preventing any further loss or damage. We need to determine the extent and cause of the loss before we can come up with a fair settlement.

Learn about the home insurance claim process here.

Pay your premiums

It almost goes without saying, but given the scope of this page, let’s say it anyway: your insurance isn’t valid if you don’t pay for it.

That’s it! Pretty simple, right? Now, let’s look at some of the things that your policy doesn’t cover.

Exclusions

What is the point of comprehensive insurance if it comes with a list of exclusions? Good question. There are three main reasons that insurers will not cover certain things:

• Some things are just uninsurable. Take war, for example. There’s no way to predict the risk involved, so there’s no way to charge a premium.
• No need. There’s no point having two left shoes, and there’s no point having two insurance policies for the same thing. Some objects are excluded from your home insurance policy because they’re covered elsewhere. Your car, for example, is covered by your car insurance, and excluded from your home insurance.
• Insurance companies don’t want to insure it. Some things are beyond the scope of insurance. Take wear and tear, for example. If insurance covered wear and tear on shoes, you could buy a pair once and have your insurer pay for new ones every year — they’d either go bankrupt or have to raise their prices exorbitantly to cover everyone. (Though there are some exceptions — Square One’s service line coverage includes wear and tear protection.)

So, what’s excluded from your Square One policy? Well, there are three categories of exclusions. Some apply to your home, some to your liability, and some to both.

Policy exclusions

The first list of exclusions applies to your entire policy. They apply to both your home and your liability. The policy doesn’t insure loss or damage when, for example:

• you deliberately do something illegal.
• you notice that a loss is about to occur, or that a loss has already begun, and you choose not to do anything to prevent or reduce the damage.
• you are deliberately negligent. For example, if you refuse to fix holes in your roof, you can’t claim for water damage resulting from those holes.
• you participate in illegal activities relating to growing/producing drugs (including cannabis).
• your house is damaged by war or civil unrest.

Liability exclusions

“Liability” is a term used a lot in insurance, but what does it mean? To be liable for something means you are legally responsible for it.

Your policy deals with two kinds of liability: personal liability and premises liability. Both protect against actions you take that might cause someone to sue you. Personal liability protects you anywhere in the world. For example, if you hit someone with your golf ball while on holiday. Premises liability protects you for accidents that happen at home. For example, if a neighbour slips on your icy porch because you didn’t take proper care to keep it safe for visitors.

You can learn more general information about personal and premises liability coverage on this page.

So, what are the exclusions to this coverage? The policy doesn’t insure loss or damage when, for example:

• your claim results from terrorism or government anti-terrorism efforts.
• your claim results from a nuclear incident that is already covered by the Nuclear Insurance Association of Canada.
• you assume liability for other people’s property, even through a verbal contract. For example, your friend agrees to lend you his expensive laptop on one condition: you break it, you buy it. If you break it (or if it’s stolen) you can’t claim this on your insurance.
• your claim results from the ownership or use of aircraft, or any premises used as an airport.
• you transmit or threaten to transmit a communicable disease to someone.
• you sexually, physically or emotionally abuse someone, or fail to take steps to prevent such abuse.
• data is lost in transmission.
• you commit libel or slander.
• your claim results from the discharge of pollutants. If the government tells you to clean or neutralize pollutants, you also can’t claim this on your insurance.
• your claim results from fungi, spores, bacteria or mould that make others ill.

Property and loss of use exclusions

The second list of exclusions in your policy relates to everything other than your liability — your home, your belongings, and so on. These exclusions are separated into two categories in your policy: general exclusions, and water damage exclusions.

General exclusions relate to your losses. The policy doesn’t insure loss or damage when, for example:

• the loss is related to the activity of any business not described in the application.
• the property is vacant, or the occupants have moved out during renovations, unless this has been disclosed and we’ve agreed to offer coverage.
• the police legally confiscate or seize your property. For example, if the police seize your computer, you can’t claim for it.
• acts of terrorism or counterterrorism cause loss or damage to your home, unless the damage results from fire or the explosion of natural, coal, or manufactured gas. In that case, you are insured.
• a nuclear incident causes loss or damage to your home. Unless the damage results from fire or the explosion of natural, coal, or manufactured gas. In that case, you are insured.
• your loss or damage results from radioactive contamination.
• your loss or damage results from the release or escape of pollutants.
• your loss or damage results from wear and tear or deterioration.
• your loss or damage results from a snowslide or landslide unless that damage results from an earthquake.
• your claim is to make good any faulty design of your home. That’s not really the realm of insurance as there has been no sudden or accidental loss.
• your loss or damage was caused by birds, bats, vermin, racoons, skunks, rodents or insects.

Water exclusions (unsurprisingly) relate specifically to water losses. The policy doesn’t insure loss or damage when, for example:

• your loss or damage was caused by coastal flood.
• your loss or damage was caused by groundwater rising or the water table.
• your loss or damage was caused by seepage or leakage over time. For instance, if a pipe in your home is leaking and your drywall gets mouldy as a result, that’s not something you can claim on your insurance.
• water damages your home after it has been vacant for 30 days.
• a pipe freezes and then bursts in your home while you are away for seven days or more, unless you made arrangements to ensure continued heating or drained the pipes.
• ice or water damages your fence, pavement, patio or swimming pool.
• your loss or damage was caused by waterborne objects.

Deductibles

There’s just one more thing you need to be aware of before dealing with the claims process: deductibles.

A deductible is the amount of money you have to pay toward a claim before your insurance policy covers the rest. If a pipe bursts in your home causing $15,000 of damage and you have a $5,000 deductible, your insurance provider will cover $10,000 of the $15,000.

With Square One, because you’re able to choose your own coverage limits and deductibles, the deductible is applied to the coverage limit rather than the loss amount when a claim exceeds the coverage limit.

All policies have deductibles, and most have more than one type. Deductibles help to keep insurance costs down. Raising your deductible will lower your premiums. But, a higher deductible means you’re agreeing to pay for a bigger portion of the loss, so don’t choose a deductible you can’t afford.

There are several different types of deductibles:

• Earthquake deductible, for claims relating to earthquake, but only if you’ve selected the coverage.
• Glass deductible, for damage to windows.
• Hail deductible, for claims resulting from hail (if you’ve selected hail coverage).
• Inland flood deductible, for claims resulting from inland flood.
• Standard deductible, for claims resulting from any other type of covered loss.

People often wonder why earthquake deductibles are so high (they frequently reach hundreds of thousands of dollars). Any earthquake that causes enough damage to warrant an influx of claims could have significant effects on the solvency of an insurance provider.

If an earthquake is big enough, virtually all structures will be destroyed and insurers could be overwhelmed with claims, leaving their customers homeless. To protect against this, earthquake deductibles are traditionally high. That reduces the amount the insurance provider must pay out, and spreads the risk, meaning no one is left without a home.

At Square One, we let you choose from a range of earthquake deductibles.

Paying for insurance

The payments you make in exchange for your insurance coverage are known as premiums. The premium amount for each policy is unique; premiums are based on selected coverages, home construction details, local risks (floods, wildfires, earthquakes, etc.), and dozens of other factors.

We have a separate page that goes into more detail about how we calculate premiums.

Payment terms

For most customers, Square One offers the choice of paying premiums annually or monthly. If you choose monthly, there’s no interest and no obligation; you can cancel at any time and receive a refund of any unearned premiums.

Unearned premiums are those that you’ve paid but haven’t been used. For example, if you make an annual payment of $1,200, and cancel the policy after one month, you would receive a refund of $1,100 — the unearned portion.

Minimum Retained Premium

The only exception to refunds is the Minimum Retained Premium, or MRP.

When you buy a policy from Square One, the first $50 in premiums are the MRP. The MRP represents a non-refundable portion of your payments. After you’ve paid at least $50 in total premiums, the MRP no longer applies, and you’ll get a full refund of unearned premiums if you cancel.

The MRP represents the costs we incur to issue a policy, even if that policy is cancelled before going into effect. Those costs include agents’ time, data access costs, and operating costs like rent or utilities.

The MRP applies even if you buy a policy and cancel it immediately, so ensure that you’re buying the right policy before you complete the application.

If you choose monthly payments, and your monthly premium is under $50, we may collect the first two to three months of premiums right at the beginning to cover the MRP.

We have a full article on Minimum Retained Premiums if you’d like to read more.

Renewal and rerate

When you buy a policy from Square One, your premium will stay the same for one year whether you pay monthly or annually (unless you make changes to your policy).

At the end of the year, your policy will be renewed and rerated. Rerating is the annual process by which your premium gets adjusted for the next year. Essentially, we re-evaluate many of the same factors we used to calculate the premium originally.

The rerate can cause your premium to go up, down, or remain the same.

Policies sold by Square One are continuous until cancelled. This is to ensure that you’re never mistakenly left without insurance coverage.

We’ll send you an email 30 days before your annual renewal, to outline any changes to your premium or coverage. You don’t need to do anything — your coverage will renew for another year at the new rate.

Annual renewal is a good time to review your coverage to ensure that it’s still adequate.

Rate increases

When your policy is annually rerated, you may find that your rate has increased even though you haven’t made any claims or changed anything about your policy. Of course, sometimes your rate will decrease, but we understand that it’s frustrating to suddenly have to pay more for the same policy.

Assuming you’ve made no claims or made any policy changes, there are still several things that can result in a rate increase. If we’ve made any internal changes to our pricing methodology, those changes would show up upon rerate. Though of course we’d prefer to offer lower prices where possible, sometimes increases are necessary.

The most significant impact on all insurance premiums is expected claim costs — and these costs are rising year over year across the industry.

This article explains home insurance pricing in greater detail. But, to summarize:

• Insurance functions via a concept known as risk sharing. Essentially, customers’ premiums contribute to a pool. In exchange for those contributions, they can receive money from the pool when they make a valid claim. Many customers contribute more than they will use, but others have coverage for losses they could not afford to cover themselves (like the loss of their house). Basically, everyone pays a little so that no one has to pay a lot.
• The role of an insurance provider is to ensure that the pool has enough money to pay those claims. That requires predicting future claim costs and collecting premiums accordingly. As claim costs rise, everyone has to contribute more to the pool. Some customers (such as those that make many claims or insure for unusually high values) contribute proportionally more, but spreading increases amongst all insureds keeps premiums affordable. Otherwise, customers who make claims would not be able to afford insurance at all.
• Claims costs across the entire industry have been steadily rising in recent years, driven by large-scale natural disasters. For example, 2024 was the costliest year in history for Canadian insurers, with over $8.5 billion in insured losses. Disasters like the Jasper wildfire, Calgary hailstorm, and Toronto flooding all contributed to this enormous cost. Every year since 2020 has been among the top 10 most expensive years for insured losses in Canada.

Hopefully, you can see why rate increases are sometimes necessary. But what can you do about it?

You do have several options to potentially lower your premium:

• Choose a higher deductible. While you’ll have to pay more in the event of a claim, your premiums will be lower.
• Review coverage amounts. Your coverage limits may be higher than you actually need. Review each coverage limit on your policy and carefully consider whether it’s the appropriate amount (though be careful of leaving yourself under-insured).
• Review discounts. Square One offers several home insurance discounts, most of which are automatically applied if you qualify. Review this list to see if there are any others you might be able to qualify for. Note that active discounts are not specifically listed on your policy.

If you would like to discuss premium-saving options with an agent, please feel free to contact us at 1.855.331.6933 and we will be happy to review your policy with you.

Policy cancellation

As mentioned above, Square One customers may cancel their policy at any time for any reason. You can do so through your online account or by contacting an agent.

However, there are uncommon situations where we might cancel a policy. Most often, this would happen in cases of repeated non-payment.

Paying your premiums is an important part of the insurance contract. If a scheduled payment fails, we’ll contact you by email and, if possible, by phone. We understand that payments can fail for any number of accidental reasons, like expired credit cards or insufficient bank funds.

We’ll make several attempts to contact you over several days to resolve any payment issues before we do anything else.

However, if we are unable to resolve non-payment issues in a timely matter, we will proceed with the cancellation process as required by the Insurance Act’s Statutory Conditions.

Making a claim

All that’s left now is how to make a successful claim after you’ve experienced a loss.

First things first: if you’re in an emergency situation, or there’s an active crime taking place, call 911. Then contact us. We’ll assign an adjuster to your case and they will help you document your loss. At this stage it’s important to take preventative measures to stop any further damage or loss from occurring.

Make sure to provide your adjuster with as much detail as you can during this process. Remember that it’s important to be honest about your claim. If your house is broken into and thieves steal your computer, don’t lie about what else was stolen or exaggerate the value of the computer. The law considers lying in an insurance claim to be fraud, and could result in outright denial of your claim. As mentioned, it’s also important to report claims quickly, and allow inspection of the cause and extent of the damage.

If it’s an emergency (say, if you’re forced to evacuate due to a fire) and you have selected coverage for additional living expenses, then make sure you hold onto all your receipts for accommodation, food, and other additional living expenses. In certain situations, Square One can issue a cash advance. Additional living expenses coverage is also available if you’re ordered to evacuate your home by a civil authority.

Once your claim has been processed, and once any necessary inspections have been completed, your adjuster will offer you a settlement. If you’re not happy with the settlement, then you have options. Start by voicing your concern with your adjuster or their manager. If you’re unable to reach a satisfactory resolution, you can escalate your concern to the department head or the complaints officer. Please visit this page to learn more about the service concern resolution process at Square One.

That said, Square One pays out on 90% of claims submitted in Canada. The most common claims result from water damage or crime, so we recommend checking your coverages (and deductibles) for these perils.

Most people fear that once they’ve made a claim on their home insurance policy, their renewal rate will soar. This is not necessarily the case. It’s true, your rate may increase, but the rate may have increased anyway because of the number of claims across the whole industry, or generally as the result of inflation. Rate increases may also be less significant than you fear. Don’t be afraid to make a claim on your policy, just keep your deductibles in mind; it may work out cheaper to replace less expensive items yourself.

That’s it! You’re now a certified PhD of insurance policies. The unfortunate truth is that most people never bother to read their policy, so take a minute to check the extent and limits of your coverage. Make sure you fulfil the requirements and be clear on what’s excluded from your policy.

If you’re looking for more information about home insurance, we’ve got you covered:

• Visit our resource centres for in-depth information on a variety of topics.
• Check out The Insurance Glossary for definitions of common insurance terms.
• See our YouTube channel for videos answering common home insurance questions.

For any more specific questions on your Square One policy, email us and a licensed insurance agent will be happy to assist you. You have our commitment to respond by the next business day.