Renovations Can Affect Your Home Insurance


Any change you make to your home, from putting in a granite countertop to adding a deck, could have an impact on your home insurance policy. According to a recent survey, only 22% of Canadians either checked their policy or contacted their insurer before starting renovations on their home to see how it may affect their coverage and update it accordingly. Albertans were at the low end of the totem pole, with only 16% asking about their insurance before making improvements. Here are a few things to remember if you’re making updates to your house.

Contact Your Insurance Broker Before The Renovation Begins

If you are doing something like putting in a woodstove, you may not want to proceed with it after discussing it with the insurance company. Some renovations are not looked on favorably by the insurance company, and it’s good to find out what they are before the work is done. Some, like adding a sump pump to your basement, can actually get you a discount on your policy.

You May Not Be Covered for Contractor Liability

The big problem in the insurance world is the word “assume”. We assume that the contractor we’re hiring has business insurance if they’re injured on our property, and if they don’t we assume that our home insurance will cover the liability. Both are really bad assumptions. Your home insurance may cover guests, but not tradespeople working on your home. And that contractor may not have liability coverage, even if they have business insurance.

You should always check your policy or contact your insurance broker before undertaking any renovation project!

Moving Out for Renovations? That’s Not Covered…

Lots of people move out of the home during major renovations. For most policies, if you’re moving away for more than thirty days, you can negate most or all of your coverage by not having residency in the home. If you’re going to be away from the home for more than a few days consecutively in the winter, you may not be covered for damage like burst pipes should your furnace fail. So really, if you’re moving out at all to avoid noise and construction, you should contact your broker and take out a rider to make sure the renovation period is covered. Keep in mind that your home is more vulnerable during renovations, with power tools chopping away and the house potentially being vacant. Better safe than sorry.

It’s Just a Granite Countertop or Kitchen Cabinets, or Hardwood Floor…

Something that may seem like a small change to you can actually affect the replacement value of your home and become a big deal to your insurance company. If something happens to your home and the renovation isn’t reported, the company won’t cover that new granite countertop that they didn’t know about. Sure, your policy will go up since your home’s replacement value will go up, but only slightly for minor renovations, in some cases maybe not at all. You won’t know until you ask.

In the end, insurance companies love most updates to a home. It means you’re putting in new materials, fixing issues, and generally keeping it in good shape. Nobody is going to shake a finger at you unless you’re doing something that may cause issues down the road, like putting in an oil furnace. And an oil furnace is so 1973 anyway. Your broker and your insurer are there to help and make sure you’re covered, not find excuses to ding your wallet for more cash. Some additional insurance that you need may only be for the period of the renovations, such as extra liability for contractors. We’ll work with you to find something that works for you.

Contact us directly if you are a First Foundation client and have any questions about renovating your home. We’ll often think of things to ask you that the insurer may not, and will work with you to make sure you have the coverage you need. If you’re not a client of ours yet and you live in Alberta, contact us today to find out how we can help you with your insurance!

President of First Foundation Residential Mortgages and First Foundation Insurance. Live in Edmonton but cheer for the Riders. I have lots of kids. Follow me on Twitter @gordmccallum

Learn more about Gordon McCallum