What You Need to Know About Home Insurance During Construction
Home insurance is an important factor when considering a renovation of your home to ensure you have the appropriate coverage both before and after home renovations. In Ontario, less than 10% of homeowners sought advice about changes to their home insurance during construction prior to starting a renovation. In addition, only 14% of homeowners notified their insurance provider of the renovation after completion. This mistake could affect or void the policy.
Do I Have to Notify My Insurance Company Before Doing A Renovation?
You should always contact your insurance broker prior to beginning a renovation. Your policy may not cover a large renovation and so you may need to take out additional coverage to ensure you are protected. Minor renovations will often not require additional coverage but be sure to check with your insurance broker. There is a lot that can go wrong during a renovation, so add that peace of mind to ensure you are covered from unexpected events.
For larger renovations such as building an addition to your property may require you to change your policy to a building under construction. This may include adding construction of builder’s risk insurance to your policy. If you are doing the work yourself, you are still required to notify your broker, so they can make sure you are protected and update your policy accordingly.
What Coverage Should I Have On My Home Insurance During Construction?
There are several factors that impact what your home insurance should cover. Firstly, your home insurance takes into consideration the replacement value of your home. If your renovations increase the value of your home, then your policy needs to be adjusted.
Renovations are often very unpredictable. Older homes can often uncover surprises when renovating, if you discover old plumbing or dated wiring you’ll need to update your policy to make sure you are covered.
Home renovations liability is another factor you should consider. While someone is working on your home, there is a risk of injury. Depending on the circumstances surrounding this, you may be liable.
Another important factor to consider is whether you will still be living at the house during renovations. If you leave your home, this could void your policy as many home insurance policies require you to be living in that residence. If you need to leave your home during renovations, you should request a vacancy permit from your insurance provider.
Lastly under home renovations, there is often a higher risk of burglary. The entry points to your home could be less secure making it easier to break in. Plus, there are often numerous unknown people with access to your property during this time which increases your risk.
These are just some of the things that you need to consider including in your home insurance during construction. Failure to notify your insurer of this could nullify your policy leaving you liable to have your claim denied and therefore must cover the costs should any issues arise.
Will My Home Insurance Rates Go Up After A Renovation?
It is important to let your insurer know of any changes. Having home insurance during construction ensures you are protected but equally important is ensuring you have coverage after. So once your renovations are complete, insurance during renovations ensures you are protected. Renovations can alter many factors of your home including an increase in replacement value. For example, upgrading your kitchen or adding an addition will increase the overall value of your home.
Renovations That Can Increase Home Insurance Rates
Here are some examples of home renovations that can increase the cost of your home insurance. This should not always be considered a negative thing as the increase in rate is just adjusting your policy to reflect the new value of your home.
- Installing a pool
- Adding a home-based business such as an office or workshop
- Kitchen upgrades
- Bathroom upgrades
- Custom work and unique building features
Renovations That Can Lower Home Insurance Rates
Here are some examples of home renovations that can reduce the cost of your home insurance. In addition, you can read our top 13 factors that will impact the price of your Home Insurance blog for more information.
- A roof replacement
- Updated plumbing and wiring
- Installing a new furnace/air conditioner
- Alarm/security systems
Home Renovation Insurance and Contractors
Another element to consider is ensuring that your contractors have liability and are are bonded and registered with WSIB. You can request all of this information when deciding on your contractors.
If you are considering renovations on your home, contact your insurance broker to make sure you have adequate coverage as well as to determine how this will affect your premium afterwards. Our Billyard Insurance Group team will be happy to assist with your home insurance needs.