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Insurance often gets overlooked when renovating despite planning, figuring out timelines, budgeting, and choosing décor. It's a common mistake – but it's a considerable risk that could void your home insurance if something goes wrong. According to Canadian Underwriter, only 6% of homeowners looked into their policy prior to renovating. Only 14% asked if they needed to update it after the renovation was complete. In this blog post, we will guide you through the reasons why you need specific policies during renos and how to make sure you have proper protection.
Yes, you should contact your insurer before starting a renovation. Two reasons why it's crucial to speak to them prior to starting are :
Your provider can also clarify whether you require additional coverage for a specific renovation project. For instance, adding a pool or fireplace will likely increase monthly costs. Another factor to consider is if you file a claim during a renovation and have failed to notify your insurer, it may not be accepted.
Some projects will cause your premiums to rise; however, others can lower your costs and make your home safer.
Some homeowners don't contact their insurer after a renovation because they are worried about their increasing costs. Depending on what work you get done, your costs may be lower. If they do increase, it's likely because of the increased replacement value.
For example, let's say your house is worth $400,000. You then decide to do an extensive bathroom renovation that increases the room's size and uses higher quality materials. Your house may not be worth $440,000, which has increased the rebuilding cost if there is an accident.
Suppose you are moving out for more than 30 days during a reno. During this time, your house is an easier target for burglary. It is recommended to look into getting unoccupied dwelling insurance.
A rise in costs after a renovation is not a bad thing. The increase is just adjusting limits to ensure your home's new value is correctly reflected, so you are protected.
It's important to know that your policy does not necessarily cover renovation costs – any significant improvements may leave you underinsured.
Even if you are doing the work yourself, you still need to contact your insurer before starting the renovation. Doing so will ensure you remain covered and update accordingly.
For extensive renovations, you may be required to change your policy to a building under construction and builder's risk insurance. Being diligent with your home renovation plans includes confirming you have adequate coverage, in addition to checking contractor insurance. You'll want to make sure they have adequate liability and worker's compensation protection.
Make sure your coverage is up to date after a renovation. Call our advisors to update your policy and ensure you have the right protection in place.
Insurance during renovations ensures you are protected. But what about when the renovation is complete? This is another time when you should contact your insurer to update your plan. Renovations can change a lot about your home – square footage, features, and, of most concern to insurers, replacement value.
Having your insurer re-evaluate your home post-renovation ensures your replacement value is accurate and up to date.
Suppose any one of these situations occurs, and you fail to notify your insurer about the renovation. You could be on the hook for the costs, have your claim denied, or have it voided.
There is misinformation out there about what you should do before a renovation. Here are the most common myths related to renovations and your premium :
When hiring contractors, it's essential to require proof of full liability in addition to making sure they are bonded and registered with WSIB. You have the right to request all this information when considering contractors.
You may be worried that your Ontario home insurance will be cancelled after a renovation has been completed. If you are in this situation, call your provider right away to ensure you have adequate protection.
You will be protected from most damages or liabilities during renovations with home insurance. Still, it would be best to tell them what is being done and what the value is. If you don't update it and need to file a claim, it could be denied or not be fully covered. Most policies state that a renovation project will invalidate your coverage if you fail to notify your provider of any updates or changes to your home.
Depending on what types of upgrades you add to your home, it can lower your yearly costs. Savings are typically seen in projects that add safety to your home, such as new wiring in a heritage home or security systems.
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