Home renovations. Some of us love them and some of us hate them. Some of us do them well, others, well, not so much. However, we all have one thing in common. As many of our holiday plans are cancelled or postponed, most have turned their attention to the home. Life dealt us murder hornets. And what did we say?  “Let’s renovate!” However, there are some important things to keep in mind from an insurance perspective when you want to renovate. Therefore, we at Campbell & Haliburton want to share some important information on home renovations and insurance!


Home Renovations And Insurance


The first big question to ask is who will be doing the renovations? Many people choose to do their own renovations. You might find a degree of satisfaction in seeing a project completed and a job well done. However, others, for a variety of reasons, look to hire contractor.

If you are doing them yourself, it is good to check to see what permits you need to have. Some renovations will not require any. While others certainly will.

If you are hiring a contractor we recommend checking their references. A good reference will provide you with piece of mind. Conversely, a bad reference is equally telling. Further, make sure that the contractor you are hiring has insurance. Specifically, commercial general liability insurance for the type of work that they are doing.


A Hammer.  A permit.  And Insurance?


Commercial insurance will protect you in the event that the contractor causes damage to your home. It will not help if you simply don’t like the colour used when painting, nor will it help if you are not happy with the finished product. Those are normally business issues have to be resolved directly with your contractor.

But sometimes the issues are more serious!

  • What if your roofing contractor neglects to tarp the roof? This could cause water damage.
  • Did your contractor forgot to turn off the water when disconnecting the dishwasher?
  • What if the contractor starts a fire?

Well, you get the picture. Therefore, ensure that the contractor carries liability insurance and shows you proof of insurance. This will go a long way to help protecting you!


Make Your Insurance Broker Aware Of Any Renovations


If you want to start renovation project, we recommend calling Campbell & Haliburton Insurance prior to starting. Every policy is different, and your broker will let you know what, if anything, you need to do.

That said, many homeowners’ policies require that the insurance company is notified if the renovations increase the replacement value of your home. So what does that mean? Most renovations add to our enjoyment of the home and should help to increase the market value of the home. However, not all of them increase the replacement value. The replacement value is the cost to rebuild, following a loss. This anecdote from our broker and office manager Daryl Arendt illustrates this point perfectly!

Some years ago my wife and I moved into our home. It was exciting. But there were some things that needed to change. Our bathroom had a beautiful sea foam green tub and sink. For some reason, my lovely wife wanted to replace these. I’m not sure why; I liked the vibe. But, as they say, “happy wife, happy life.” So we redid our bathroom. The fixtures were all replaced. Gone was the green for a more contemporary white. And while we were at it, we replaced all the cabinets and flooring. Sound expensive?  Most definitely.


Anyone who has ever done bathroom renovations knows that the cost can add up quickly.  So, while we did put money into the renovation… the cost to rebuild did not dramatically increase. A white tub costs about the same as a green tub. New flooring costs as much to replace as old flooring. So while we did spend money on renovations, this didn’t increase the cost to rebuild our home.


What Renovations Impact The Cost To Rebuild?


Some renovations not only increase the market value of your home but also increase the replacement cost of your home. These may include:

  • Finishing a basement
  • Adding air conditioning
  • Adding a hot tub or swimming pool
  • Building an addition to your home
  • Building a deck
  • Adding a bathroom
  • Finishing your basement

Why Does Your Insurance Company Need To Know?


What is the big deal? Well, most insurance policies insure the home on a replacement cost basis. Therefore, in the event of a loss, the insurance company would pay to either have the damage repaired or have the home rebuilt. This all depends on the severity of the loss.

There is generally a caveat in the insurance policy which stipulates that the insurance company needs to be aware of changes to the value in order for them to pay the full amount. Insurance policies also typically state that they need to know very shortly into the renovation process.

So, please call your broker here at Campbell & Haliburton before you begin, not when you are finished!


What About A Garage?


One of the questions we often get is, “how much will my insurance increase if I build a garage?”

Most homeowner’s insurance policies automatically provide you with coverage for any detached personal use buildings. Therefore, most garages will fall under this. That means you do not need to do anything to your insurance.

Whenever our clients call indicating that they are building a garage we ask:

  • Is this a detached garage or attached? If attached, then the cost to rebuild the home has just increased significantly.
  • Is the garage personal use or are you using it for a commercial shop?
  • Finally, is it heated?


What Kind Of Renovations Can Cause Concerns?


While most renovations are fairly innocuous to insurance companies, there are a few that could cause some concern. Many of those have to do with heating. If you want to install another heating system, whether as your primary heating source or as secondary, check with your broker first!

Natural gas or electric heat is likely not a concern. However, solid fuel (wood or pallet) stoves or oil furnaces are more of an issue. As for fireplaces, it depends on a number of factors. Fireplaces may be OK or may require an additional surcharge on your insurance. Either way, you guessed it, call your broker and ask before you install it!


Important Insurance Take Aways


  1. If you are hiring a contractor make sure that they have commercial liability insurance.
  2. Give your broker a call before you start the project, that way they can best advise you of what you need to do.
  3. When you are all finished give us a call, send us photos, and brag about what you have done. Even if it does not change your insurance in any way, we would love to see the finished product!

Our Trusted  Regina Insurance Agents at Campbell & Haliburton have your best interests and safety in mind and our commitment to customer service is one of the pillars of our business.

We also know insurance inside and out, so please contact us for all of your insurance needs and we will be more than happy to help ensure what you value most is protected.