Home ownership is often a constant uphill battle of repairs and fixes, unless you happen to have been able to build your home exactly to your specifications. But most people don’t have that opportunity, and so are always saving up for something, whether it’s new windows, new appliances, a paint job, and so on. The list of home upkeep projects is very long.
If you are undertaking a large renovation project, there are a lot of things to think about. There’s budgeting, the design process, planning, timelines, choosing furniture and décor… it’s easy to overlook something, and your home insurance is often what that is. Be sure to inform your insurance provider if you are going to be making major changes to your home. There is a lot that can go wrong, and the last thing you need is a lapse in your coverage. Obtaining different types of home renovation insurance is a very smart idea. In fact, it many cases it is a must to ensure the continuation of your coverage.
Why Do I Need Home Renovation Insurance?
Home insurance policies are designed to protect you from unexpected occurrences, such as extreme weather, a fire, and water damage. Home renovations are not an unexpected occurrence, and so often do not fall under the regular parameters of home insurance coverage. Most policies stipulate that failing to notify your home insurance company of a renovation project will invalidate your policy.
Definitely give your provider a call to inquire as to how your policy applies when you are undergoing home renovations. Home renovation insurance may include construction insurance and a vacancy permit.
Extensive work such as the removal of a wall or an addition being added may require you to purchase a specialized type of insurance product known as a course of construction policy. Also known as builder’s risk insurance, course of construction policies protect you from fire, vandalism, theft and lightning while work is being done.
If the work being done requires you to be out of your home for an extended period of time – such as longer than 30 days – your home may be considered vacant, and that may nullify your insurance. You will then need a vacancy permit from your insurer.
Also check your contractor’s insurance thoroughly. They should have full liability coverage for their work, as well as worker’s compensation coverage in case one of their employees is injured on the job. Both should be valid for the entire duration of your renovation.
Your insurance provider also needs to know if you are renovating your home because of:
- Problems that may occur during the renovation. You never know what you are going to find when you start taking down walls, and there may be updates that need to be done in order to maintain your coverage.
- Liability. If a worker hurts themselves while they are on their property, you could be found liable.
- Increased vulnerability. What with the many different contractors and workers entering and leaving your property, the chances of something of yours going missing increases greatly.
- Increased limits. Because of the amount of equipment, workers, and tools on your property during a renovation, it may be necessary to increase the limits of your policy.
In addition, don’t forget that it is up to you to make sure all of the necessary building permits have been obtained. Don’t rely solely on your contractor (or contractors) for this. Ask to be updated at all times, as the last thing you need is to have work carried out that will not meet codes. Also be sure to keep all of the paperwork to show your insurance provider once the work is done.
Will My Home Insurance Go Up Because of a Renovation?
If the renovations you are carrying our increase your home’s replacement value, then it is possible that your rates will go up. Remember, your home’s replacement value is the amount it will cost to rebuild your home to the same specifications should a catastrophic loss occur. Renovations are almost certain to affect your home’s replacement value, and that is something you definitely want your home insurance company to know about.
Adding a home security system, upgrading wiring, installing a sump pump, and improving your home’s overall safety could, however, work to counter the increase in your home’s replacement value.
Insurance Brokers Can Help With All Aspects of Your Insurance Coverage
As experienced insurance brokers, we are able to ask the right questions to ensure you get the coverage you need, when you need it. We only work with the very best providers in the business, all of which provide numerous policies that we can help tailor to meet your specific requirements. Contact us at our Calgary, Edmonton, Banff or greater Alberta offices.