Are You Planning Major Home Renovations?

By Andrew Coburn
August 17, 2021

Canadians invest tens of billions of dollars each year in home improvements and renovations. Bathroom renovations top the list, followed by basements, decks, fences, and more. When you purchased your home insurance policy, you probably spent some time working with your broker to be sure you were fully insured and that your home would be repaired or rebuilt to be as good as new if you had a covered claim. If you make major changes to your home, your coverage needs to change as well.

Simple improvements, like painting, aren’t likely to change the insured value of your home. However, if you’re painting or staining a new deck you just built, or painting the fence around the pool you just had installed, those are both items that your insurer should know about. Not only do you have more value to insure, but your liability coverage should be reviewed as well.

Your home insurance policy contains provisions to repair or rebuild your home in a covered claim using “like kind and quality” materials. This means that when you bought your policy you may have been insuring a $10,000 bathroom. After renovations, the cost of rebuilding your renovated bathroom might be $20,000 — or even more — because the materials have changed.

It’s also common for renovation projects to travel through the house. Maybe it’s a bathroom first and then a kitchen next. The differences between the insured value and the actual cost of rebuilding can start to add up. In some cases, it could even trigger a clause in your insurance policy called coinsurance, which means your home is significantly underinsured and you may have to pay a percentage out-of-pocket in the event of a claim.

If you’ve done some renovations or are considering some big changes around the house, reach out to your broker to review your coverage. It’s possible that you’ll need to adjust your coverage to cover the new rebuild value of your home, making allowances for the upgrades.



Get the Proper Coverage!

Be sure that you get the right coverage before you start your next renovation project and take advantage of home insurance rebates with home safety renovations.