Summer typically signals longer days, patio season, outdoor adventures and, quite often, home renovations. While it’s never too early to begin your renovations, summer weather makes this the easiest time to get small or large home projects done.
Before starting any projects, you should talk with your insurance broker. At BrokerLink, our advisors can tell you if your project may impact your insurance policy. Adding value to your home may change your insurance needs. Plus, your advisor may be able to give you some professional insights on things that will benefit you and other considerations you should be aware of. Keep reading to learn more.
Why speak to your insurance broker about your home renovation?
Before starting any large-scale renovations, you should speak with your advisor. Your home and belongings are insured at a specific amount, so making any changes may affect this. For example, updating your electrical wiring can reduce the chance of an electrical fire, and replacing old plumbing can reduce the chances of water damage caused by leaks and corrosion. In these cases, your insurance premium could be reduced.
Finishing your basement adds value to your home, which means your rates may increase slightly to reflect the replacement cost if any damage were to occur. Roofs, eaves troughs and other upgrades don’t add a lot of value to your home or affect your premium, but they’re important because they protect your home from damage. Your BrokerLink advisor will make sure that any work you do factors into your insurance premium so that you’re covered should anything unforeseen happen.
Depending on the scale of the renovation, your broker may recommend that you purchase a Builder’s Risk Policy. A typical homeowners insurance policy doesn't cover dwellings under construction. Builder’s risk coverage insures the value of a building during construction. The structure, materials, equipment and supplies are all covered under this policy if they are used to build part of the finished project. Construction contracts should be reviewed to determine if the contractor or owner is responsible for insuring the project while under construction.
What does renovation insurance cover?
Home renovations insurance adds more coverage to your existing house insurance as a way to supplement your coverage and ensure that there are no pitfalls in your policy during the period when you're renovating your house. Most home insurance will not cover you if you are renovating your home, and it's important that you review your home insurance policy before undergoing any renovations by looking at the specific policy wording.
So, by speaking to your insurer about your home renovations prior to starting your construction project, your insurers will be able to add coverage to ensure all gaps in your overall protection are filled. That way, if an insured loss should occur unexpectedly during your renovation, your "home renovation insurance" will ensure that you are fully covered.
What if I don’t tell my insurance advisor about my home renovation?
Depending on the scale of renovation, failure to disclose major home projects could void your current home policy. Renovations are tricky, and unexpected damage may occur. Many insurance policies state that your policy will be invalidated should you fail to notify your insurer. At the end of the day, your insurance brokerage is here to help you navigate the insurance waters so you know how to protect yourself.
Factors that may affect your current home insurance policy
What information should you provide to your insurance advisor if you’re going through renovations? It depends on the type and size of the upgrade being done. Here are the factors that could influence your home insurance policy:
- If it’s large-scale, like some kind of addition to your property, it’s quite likely that your advisor will want some more details such as the construction type, location, finishings, square footage, etc. Since your renovations are likely to increase the value of your home, this information will make sure they’re properly covered.
- You should still consult with your insurance advisor during DIY projects. It’s important to correctly evaluate the coverage required for a project even when you plan to do it yourself. Remodelling something like your kitchen, where there are different electrical outlets and pipes, could be costly if something goes wrong.
Will a home renovation affect your home insurance premium?
It depends on your renovation. If you’ve remodelled your master bathroom, your premiums may increase to reflect the money spent on upgrades, so you are covered should any future damage occur. Once the renovation is complete, talk with your advisor right away to update your policy.
If you’re wondering when to consult with your insurance advisor, ask yourself: Are you maintaining your property, or are you adding value? Did you add swimming pools that require high policy limits for liability insurance? These are all important questions that your provider can answer before ensuring that your home insurance provides you with adequate coverage based on the new features of your home.
Trust us, preventative home insurance claims that could have been avoided had you had the right coverage in the first place are often the most frustrating to deal with! Continue reading to learn more about keeping up your home:
Maintenance
Much like vehicles, homes require regular maintenance, which includes the things you do to ensure continued functionality and prevent damage. This could mean painting, simple landscaping, fixing cracks in your foundation, or touching up grout in your bathroom. While it’s important, it’s not increasing in value. In these cases, your advisor doesn’t need to know. Just remember to book home inspections once every year to avoid having to file an insurance claim under your home insurance policies!
Improvements
This includes anything you do to add value to your property. Improvements include:
- Building a deck or adding a structure on your property like a shed or garage.
- Upgrading plumbing and electrical.
- Redoing your kitchen and bathroom.
It’s important to notify your insurance advisor when you’ve added value to your home, as it may affect your home insurance premium. When in doubt, give us a call! We’re here to help you - it’s better to be safe than sorry.
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Does your contractor need insurance when renovating?
When you hire a contractor, there are many risks. Your contractor should have insurance coverage for their business, which ideally includes liability coverage.
For the most part, reputable contractors are comfortable disclosing these details to potential customers because any renovation projects should be adequately covered through their commercial policy and your personal one. Contractors should have:
Protection for personal injury
Worker’s compensation covers an employee’s wages, whereas a personal injury policy is used to help with medical expenses, legal fees, and any compensation for someone who is injured on a job site.
Damage Claims
Any legal or repair costs would be covered if the customer’s home or property were damaged in any way during renovations.
Equipment/Tools Insurance
This will provide coverage in the event that any tools are damaged. It can also pay for equipment rentals. As homeowners and contractors have different needs, insurance policies are beneficial to protect yourself and your assets. Insurance is in place to give everyone peace of mind no matter their situation or unique needs.
How much does home insurance cost?
The average home insurance cost in Canada is approximately $1000 a year. That said, this will vary between insurers and the type of house insurance you have. Some factors that will determine how much you pay for your house coverage include where your home is located, the value of your personal property (based on home inventory calculations), your coverage limits, how much liability insurance you purchase, and whether you opt to purchase additional coverage.
What information do I need to provide my company when getting renovation insurance?
When speaking to your provider about renovation insurance, you'll need to provide them with specific details about your project, including the following:
- How much is the renovation going to cost, and what is the approximate timeline for the project?
- What type of work is going to be performed on your property?
- Where will your personal property be stored during the renovation?
- Whether or not you and your family will be remaining on the property during the process.
- A copy of the contractor's coverage to confirm they have insurance.
- And more.
DIY versus a professional contractor
| Consideration |
DIY |
Contractor |
| Cost |
Usually cheaper as you’re not paying for labour. However, it could take you longer since you’re not a professional. |
Contractors cost more, but professionals with a good reputation are likely to complete your project much faster since more people will be on the job and it can happen during your work schedule. |
| Knowledge |
The quality of work may be lacking since you may not have experience or the professional equipment used for jobs such as tiling, landscaping and other home projects. |
Having the knowledge and correct insurance, codes and permits are things contractors will be aware of since a lot of work needs to be “up to code.” If you’re not aware of what that is, it could impact you when you want to sell your home or could be potentially hazardous. |
Contact BrokerLink for home insurance coverage
Need home insurance advice for your upcoming renovation? Whether it's a small remodel or a major renovation, BrokerLink can help ensure you’re covered! Looking to get additional coverage? Ask us about high-value home insurance or a green home insurance policy!
Give us a call today to speak with a member of our team and learn about how your home renovation could affect your policy. You can also visit us in person at one of our many locations across Canada. Are you in a rush? Get a home insurance quote using our online quote tool, which can be completed within minutes.
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FAQs about renovation insurance
Are contractors required to have insurance before starting a job?
Yes, contractors and other businesses require insurance in order to operate legally. This is to protect them and their customers in case of an accident, injury or other damages that may occur during the renovation.
Do I have to tell my insurance company if I’m replacing a sump pump and backwater valves?
It’s a good idea to let your insurance company know, as you may be able to save a few extra bucks every month on your policy. Plus, it’s never a bad idea to check in to ensure you’re protected against sewer backup.
Can a renovation project in my home lower my future homeowners policy premium?
It depends on what the upgrades are, but this is true in some cases. We typically see this when customers update various things in their older homes, such as electrical wiring and updated plumbing pipes, a new roof, installing alarm systems, installing security cameras since you’re making your property safer, making your home less prone to theft and other damages that could render a future homeowners insurance claim with their home insurance company. Ask your insurance company about potential insurance bundles to lower your overall premium!
What is builders risk insurance in Ontario?
Builders risk insurance coverage, also known as construction insurance, is a specialized type of insurance policy that covers a home during a renovation project, specifically during the building phase. It covers the replacement of building materials, damage to the physical structure of the property, legal fees, and costs associated with removing debris materials that occur as a result of an insured loss.
Do I need to file a police report to file a home insurance claim?
Whether or not a police report is required for a claim involving your home depends on the circumstances at hand. For example, if a crime has been committed, such as the theft of your personal belongings, a police report can be helpful in providing evidence to insurers about what happened. With any personal insurance claim, the more evidence you provide, the better chance you have of receiving compensation as quickly and as fairly as possible.
If you have any questions, contact one of our local branches.
