A Hammer.  A permit.  And Insurance?

Home renovations. Some of us love them. Some of us hate them. Some of us do them well, others, well, not so much. But one thing that we all have in common is that with many of our holiday plans cancelled or postponed, we have turned our attention to our home and yard. Life dealt us Murder Hornets. And what did we say?  “Let’s renovate!” Seems easy enough now that the decision has been made to start a big home renovation project.

However, there are some important things to keep in mind from an insurance perspective when you decide to undertake a home renovation and we at Campbell & Haliburton want to share some important information for you before you start!

What do you need to know about home renovations and home insurance?

The first big question to ask regarding renovations is who will be doing them?

Many people choose to do their own renovations.  They find a degree of satisfaction in seeing a project completed and a job well done. Others, for a variety of reasons, look to hire contractor.

If you are doing the renovations yourself, it is good to check to see what permits, if any, you need to have. Some renovations will not require any, others certainly will. Check to see before you start the job.

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

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 that they used when painting, nor will it help or if you are not happy with their finished product. Those are normally business issues that you will need to resolve with them with your contractor.

But sometimes the issues are more serious!

  • What if your roofing contractor neglects to tarp the roof and there is water damage?
  • What if your kitchen renovation contractor forgets to turn off the water when they disconnect the dishwasher?
  • What if the contractor starts a fire?
  • What if. . . ?

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

What does your insurance company need to know about your renovations?

Whenever you are starting a renovation project, we recommend a call to your knowledgeable Campbell & Haliburton  insurance broker 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 be 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. But not all of them increase the replacement value, that 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 really sure why; I liked the vibe that they gave off. But, as they say, “happy wife, happy life” so we redid our bathroom. The fixtures were all replaced. Gone was the green to be replaced with more contemporary white. And while we were at it we also replaced all the cabinets and the 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 the renovations, they did not actually increase the cost to rebuild our home.

The same holds true for painting or carpets. You may want to paint over the lovely avocado in the living room (or maybe not) but the cost of paint will likely not increase the cost to replace your home. Blue paint costs about as much as green paint. New carpet may enhance the look of your home and may help your resale value, but likely a nice neutral carpet likely will not cost any more than the old psychedelic red and orange patterned one.

What kinds of renovations do impact the cost to rebuild?

Some renovations not only increase the market value of your home but they also increase the replacement cost of your home.  Some of the more common renovations 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 do you need to let your insurance company know if you have done renovations?

Man peeling back carpet wearing safety gogglesSo why is this important? What is the big deal? Most insurance policies insure the home on a replacement cost basis. What this means is that in the event of a loss the insurance company would pay to either have the damage repaired or have the home rebuilt, depending on the severity of the loss.

But there is generally a caveat in the insurance policy that stipulates that in order for the homeowner to receive the full amount of the loss 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 “I’m building a garage.  How much will my insurance increase”

Most homeowner’s insurance policies automatically provide you with coverage for any detached personal use buildings.  Most garages will fall under this, meaning that 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? (fit is is 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?
  • 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 are looking to install another heating system, whether as your primary heating source or as a secondary heating source 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, depending on a number of factors they might be OK or may require an additional surcharge on your insurance.  You guessed it, call your broker and ask before you install it.

With any changes you’re your heating, whether in your home or any building on your property,  please call your broker before you install it.  That way you can save time, money and frustration.

Important Insurance Take Aways:

  1. If you are hiring a contractor make sure that they have commercial liability insurance
  2. Give your broker or agent 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 up what you have done.  Even if it does not change your insurance in any way we would love to hear about and 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.