Home Renovations
March 23rd, 2020, marks the grim anniversary of the first lockdown in Ontario. With the province’s most recent lockdown in the start of 2022, it is hard to believe we have been battling this pandemic for 2 years. There have been various cultural phenomenons during our extended time at home. Whether it was watching Tiger King, making sourdough bread or now playing Wordle, people found ways to fill their time. Another popular lockdown activity involved home improvement. Beyond simple DIYs, some families took this opportunity to renovate and upgrade their living space. Many people are unsure if these renovations will impact their insurance? Do I need to tell my broker about any renovations to my home?
Generally, your homeowners’ insurance policy will cover renovations, but each situation is unique. It is good practice to discuss with your broker any plans to change your home prior to the project getting underway. Renovations are designed to increase your home’s value and if you don’t discuss it with your broker you could be left underinsured based on your home’s new value. In addition, your existing liability limits may not be sufficient if someone gets hurt during the renovation.
There is a common misconception that disclosing expensive home renos can increase your home insurance premiums. While this may be the case sometimes, the opposite is also true. There are some home improvements that can lower your rates and help reduce the risks of future claims which ultimately helps manage your premiums too. For example, adding or upgrading a home security system may entitle you to savings on your home insurance. Here is a list of other popular renovations to discuss with your broker;
- Adding a swimming pool
- Updating roof
- Completing a basement
- Adding a bathroom
- Upgrading a kitchen
- Installing a new furnace
Finally, not letting your insurance broker know about renovations is a risk that could void your home insurance. In Ontario, only 6% of homeowners looked into their policy prior to renovating, and only 14% asked if they needed to update it after the renovation was complete.
Do I need insurance for renovations?
It is important to discuss what specific renovations you have planned because it can affect which type of coverage is recommended. For example, for large scale projects that would require you to vacate your home for 30 days or more could be in violation of your standard home insurance policy. You need to ask your insurer for other options such as a vacancy permit, which will cover claims that could happen while you’re away. Liability and risk are often associated with renovations. Existing limits may not be sufficient if someone gets hurt during the renovation.
In sum, restructuring your home may call for a restructuring of your home insurance policy as well. Renovations can change a lot about your home – square footage, features, and of most concern to insurers, replacement value. Our goal is to never leave you underinsured. At Merit Insurance, we cultivate close relationships with our clients and believe the best way to insure you is to know your story. With our one-on-one service, we will make sure you are adequately covered every step of the way.
