Summer is the time when many Canadians take advantage of the warmer weather and perhaps even some vacation time to renovate and upgrade their homes. In 2017 48% of Canadian home owners renovated their homes, and the average money spent was around $11,000, that’s a combined amount of $72 billion dollars. Canadians renovate for three main reasons; 31% renovate an existing bathroom, 31% is to basic maintenance, and 38% is for landscaping reasons.
Home renovations can increase the value of your home, provide additional space, and help keep your home in good condition. If you’re planning a renovation make sure you inform your insurance broker of your plans to ensure that your home insurance policy remains in effect during this time. Certain types of alterations to your property may affect your insurance policy and if something should happen you may find that your policy does not cover the perils you expected it to cover.
Renovations and your Home Insurance Policy
Here are some of the reasons why you need to notify us if you’re planning a reno:
1. Renovations can increase the value of your home.
Your home insurance policy is designed to cover the replacement cost of your home in the event of a fire or other significant damage. Anything that affects the replacement cost of your home can also affect the cost of your premium and the amount for which you are insured. Receipts may also be required to show that the work has been done.
2. Vacating your home can invalidate your policy.
Most home insurance policies require that the home remain occupied while it is insured. The reason for this is that homes that are occupied are less likely to be broken into and more likely to be well maintained. If you must leave your home for an extended period while renovations are being made, you can request a vacancy permit. Vacancy permits may cost a few dollars, but they allow you to maintain coverage while you’re away from home.
3. Extensive renovations may change the classification of your policy.
If you’re making substantial renovations such as replacing an exterior wall or roof, this may change your policy to that of a building under construction, rather than a single-family dwelling. The reason for this is that your personal belongings in the home are covered by your insurance policy as well as the building itself. If there’s a damaged roof or missing wall that can affect the condition of the contents of your home, an insurance company may choose to exclude them from your policy during the renovation period.
4. You may be liable for injuries to workers on your property.
If a renovation worker or anyone else is injured on your property, you may be liable for costs and damages relating to that injury. Before you hire a contractor, check that they have insurance in place to cover an unexpected injury. You should also review the amount of liability coverage you have, it may be worthwhile to increase your coverage during the renovation period just in case something happens to a third party on your property.
5. You never know what you may find.
If your home is an older one, renovations may uncover a potentially hazardous building materials or construction techniques, that don’t meet current building codes. Some of these changes may significantly affect the extent and duration of your renovation and therefore your insurance coverage.
The best idea is to work closely with your insurance broker and keep them informed of the extent of your renovations. If you have any questions, ask us.
Once your upgrades are complete, schedule an appointment with your broker to talk about the changes and discuss whether your insurance coverage needs to be altered. This may or may not increase your current home insurance rate. Just remember we want to make sure your covered properly.