Home Renovations And Your Home InsuranceOctober 10, 2014
Big or small, renovations can be stressful and if something goes sideways you’ll want to make sure there’s insurance there to protect you.
You’ve Got A Renovator, But Does Your Renovator Have Insurance?
Your renovator should have insurance. According to the Canadian Home Builder’s Association (CHBA), your contractor should have commercial general liability insurance. This insurance will provide protection that includes coverage should your home or neighbouring properties be damaged as a result of the renovation activity, or a third party is injured. Without it, you—not necessarily the renovator—could be liable.
The CHBA says the renovator should have a minimum of $1 million in coverage, but many will carry more—often $2 million in liability insurance. Your renovator should also have Worker’s Compensation insurance that covers medical and rehabilitation for worker’s on your job if injured (it also covers lost wages). If they don’t have it, the worker can come after you.
Do It Yourself More Your Style?
Whether it’s laying new floor or adding a new deck, if you’re going to DIY and call in a favour with some friends, you’ll want to make sure your home insurance provides you with the adequate coverage should someone be injured, materials stolen, or damage caused while you undertake the project.
Your home insurance, like any insurance policy, is there to protect you from unexpected and unforeseen events, and a home renovation adds a whole new layer of potential unexpected and unforeseen events. That’s why some renovations may fall outside of your current home insurance coverage. Don’t risk it; it’s your home after all. Call your home insurer to make sure you’ve got the coverage you need while renovating—whether doing it yourself, or with a contractor.
Ready For Renos? Are You Sure?
A study by TD Insurance last year, said that just 6 per cent of homeowners checked their home insurance policy to ensure they were protected during their renovations; and only 16 per cent followed up with their insurer after a renovation. A before and after talk with your insurer is crucial:
- Do you need a building construction endorsement added to your policy that will cover things like theft, water damage and vandalism that may not be typically covered during renovations?
- Will you be vacating the home during construction? If so, you may need to request a vacancy permit from your insurer.
- Do you need extra liability coverage just in case someone gets hurt during the project?
- Will your insurer need a copy of permits, approvals or inspection reports?
- Have the renovations increased the value of your home? Say for example, you ripped out that old 70s style kitchen and put in top of the line appliances, granite or marble counter tops, and custom cabinets and cupboards. The cost to replace your old kitchen versus the new one obviously isn’t going to be in the same ball park. Some renovations will require you to update the replacement cost of your home so it better reflects reality.
- Have the renovations improved the home’s security or safety, or minimized the chance you may make a claim later? Some renovations could lower your home insurance premiums like a new roof, wiring, plumbing, heating sources or home security systems
Under the terms of your home insurance agreement, you’ve committed to keeping your insurer in the loop on any renovations you may undertake. Not doing so could result in inadequate coverage, or worse, no coverage at all.
A renovation can add new life to your home, just ensure you can enjoy it knowing your home is properly insured.