Definition
Home insurance (or homeowner's insurance) is a prerequisite of every Canadian mortgage: no lender will disburse funds without valid insurance proof in force at the possession date.
It typically covers: the home structure (replacement value), personal property, civil liability (in case of injury to a third party on the property), and temporary living expenses in case of a claim.
For a condominium, the condo association maintains collective insurance on common areas. The buyer must obtain personal insurance for their improvements, personal property, and civil liability.
The lender typically requires that their name appear on the insurance policy as a 'designated mortgage creditor' (loss payee), guaranteeing they are compensated in priority in case of total loss.