Home renovations can boost your home’s value and energy efficiency. But they can also change your home’s risk profile and replacement cost, which means your home insurance policy may need to change before, during and after the work. Notifying your broker or insurer early helps prevent coverage gaps, claim disputes or policy issues down the road.
Why Renovations Can Affect Your Policy
- Replacement Cost Increases: Finishing a basement, adding a room or upgrading kitchens/baths raises the cost to rebuild. If your policy still reflects the pre-renovation dwelling, you could be underinsured after a loss.
- New or Higher-Risk Features: Pools, wood stoves or new detached structures may require liability limit changes or endorsements.
- Temporary Construction Risks: During the build, materials on-site, open walls and contractors increase exposure to theft, fire and accidental damage — risks not always covered by a standard home policy.
Tell Your Insurer Before You Start
Contact your broker or insurer prior to any major work (e.g., additions, structural changes, kitchen/bath renovations, significant electrical or plumbing upgrades). Doing so ensures your policy reflects the project scope and avoids unpleasant surprises if something goes wrong.
Non‑disclosure of a “material change in risk” (like living space or major system upgrades) can affect claims or even your policy’s status — another reason to keep your insurer informed.
Coverage During Construction: Consider Builder’s Risk
For substantial renovations, you may need a builder’s risk (also known as course of construction) policy or endorsement. It typically covers the structure while work is underway, plus materials and equipment stored on-site against perils such as theft, vandalism and fire. Homeowners’ insurance is designed for a finished, occupied structure and may not fully apply during heavy construction.
The type of additional coverage depends on project extent and duration. Your broker can help determine whether a builder’s risk endorsement or separate policy is appropriate.
Vacating Your Home? Mind the 30‑Day Rule.
If you must move out for more than 30 days, many Canadian home policies restrict or void coverage unless you obtain a vacancy permit or specialized vacant property coverage. Vacant or unoccupied homes face higher risks of theft, vandalism and unnoticed water damage, so insurers limit standard coverage after prolonged absence.
Don’t Forget Liability
Contractors usually carry their own general liability insurance, but you should still verify proof of insurance and ensure your own personal liability limits are adequate while multiple trades are on-site. If a worker is injured and coverage is inadequate, you could face claims. Consider temporarily increasing your liability limit during the project.
Potential Savings for Risk‑Reducing Upgrades
Not all renovations raise premiums. Risk‑mitigating updates, such as replacing an aging roof, upgrading old wiring/plumbing and adding monitored alarms, can help improve insurability and may lead to discounts with some insurers.
Practical Steps for Canadian Homeowners
Call Your Broker Early: Share the scope, timeline, whether you’ll vacate and any high‑risk features (e.g., pool, fireplace). Ask whether your project triggers a builder’s risk endorsement/policy.
Verify Permits and Inspections: Insurers expect permitted work and may require inspection documentation. The appropriate permits and inspections also reduce safety and compliance risk.
Confirm Contractor Insurance: Request a certificate of liability and workers’ compensation coverage before work begins.
Review Vacancy Provisions: If you’ll be out of your home for more than 30 days, discuss vacancy permits or vacant property insurance to avoid coverage being limited or voided.
Update Replacement Cost Post‑Reno: Rising construction costs across Canada mean rebuild values are higher than they were a few years ago. Make sure your dwelling limit and endorsements (such as guaranteed replacement cost) keep pace.
Document Everything: Keep contracts, material invoices, photos and inspection reports. These help adjusters validate improvements and values after a loss.
Renovations are exciting, but they change how your home should be insured. By notifying your broker, arranging the right construction‑phase coverage, following vacancy rules and updating replacement cost, you protect both your investment and your peace of mind.
