Renovating your home? Here's how it could impact your home insurance.
You've picked your paint colours, lined up a contractor — and convinced yourself that living without a kitchen for three weeks helps build character. But whether you're renovating to improve curb appeal, update your space, or transform your house into a home, renovations could impact your insurance coverage in ways you may not have expected. In this article, we'll answer some common home insurance questions that may come up when you're planning a renovation.
What is a home renovation?
A home renovation typically refers to a project that changes, improves, or updates a part (or parts) of your home. Examples include building an addition, finishing your basement, or replacing old windows. But when it comes to the potential impact on your home insurance, how your coverage may be affected will generally depend on the scope of the work involved, as well as the associated risks of doing the work.
What insurance do I need for renovations: How home insurance works when remodeling or renovating
Renovations come in all shapes and sizes, from making small upgrades to giving your house a major overhaul, so it makes sense that there's no one-size-fits-all answer to how a reno project might affect your home insurance. It can be helpful, though, to understand how the changes you'll be making may have an impact on your policy — and it's also highly recommended that you speak with your insurer before you begin your home reno so they can advise you on how your coverage may be affected by the work you're planning.
Does home insurance cover renovations?
Home insurance typically covers the structure of your home, your personal belongings, and liability. However, it may not necessarily provide the coverage you need during a home renovation. In fact, whether you're doing the work yourself or are hiring an experienced contractor, you should contact your insurance company before any work begins on your home.
Your insurance company will help you:
- Get the coverage you need to reflect the updates to your home.
- Determine whether you need additional home insurance coverage during your renovation.
- Review your policy and highlight what is and isn't covered.
Learn how you could boost your home insurance coverage with TD Insurance. A TD Insurance Advisor can help you determine the right coverage for you during your home renovation.
Already a TD Insurance customer? Login to MyInsurance or the TD Insurance Mobile App to review your policy.
What does renovation insurance cover? Do I need any additional or temporary insurance for home renovations?
While there's no specific coverage called 'Renovation Insurance,' you may need additional coverage during a renovation that your homeowner's policy doesn't provide. For example, this additional coverage could be available as an add-on to your current policy.
Typically, the coverage that's right for your renovation depends on your needs and the scope of the work being done. Keep in mind, too, that do-it-yourself projects could have as much of an impact on your insurance as work done by contractors.
Consider the following before starting your next renovation project:
- Will your home be unoccupied for an extended period during the renovation?
- Does your renovation include building materials, like wood, paint, and tools, that weren't accounted for when you first purchased your home insurance policy?
- Does your existing home insurance policy limit or exclude things like theft, water damage, or vandalism during a renovation, including do-it-yourself jobs?
Your insurer can help you determine the insurance coverage that will best fit your needs during your renovation.
Do I need to tell my home insurance provider about my renovations?
Yes, you should always keep your insurance company in the loop about any renovations that you're planning. Even a small update could affect your home's rebuild cost or introduce new risks. Talking to your insurer before you start your renovations will help ensure you don't experience coverage gaps that might otherwise be caused by your reno project.
Do home renovations affect the cost of my insurance?
Typically, the cost of your home insurance will change following a renovation. But, while you may be expecting your renovation to increase your insurance premium, some types of renovations might potentially decrease the cost of your insurance. Here are some examples of renovations that could impact your premium:
- Security cameras and alarm systems: Making your home more secure by installing a home security system and/or connected fire or burglar alarms could help reduce the cost of your insurance.
- Finishing your basement or adding a basement apartment: Since this renovation typically increases the value of your home, it will also increase the cost to repair or rebuild your home. This increase in cost means you'll see an increase in your home insurance costs as well.
- Home extension: An extension that adds to the square footage of your home also increases the cost to repair or rebuild your home, which, in turn, will increase the cost of your home insurance.
And if you're a TD Insurance customer with Enhanced Home Coverage? Consider using environmentally friendly or resilient materials for any repairs or rebuilding you may be doing as part of a covered claim—your Enhanced Home Coverage includes Eco-Efficient Rebuild coverage, which could help with some of the extra costs of these eco-friendly materials.
What else should homeowners consider when planning a home reno?
In addition to making sure you've got the home insurance coverage you need, here are some other concerns that may come up during the renovations planning process.
Who to call for home renovations: Contractors, architects, and more
The people or businesses you'll need to hire for your renovation depends on the scope and type of work you're planning. For example, major renos or remodels that include structural work will likely need multiple professionals, such as licenced contractors, architects, and structural engineers. On the other hand, for more simple updates to your home, such as replacing windows or modernizing your fixtures, a specialized tradesperson might be all you need.
When choosing who to hire for your reno project, ask friends and neighbours for referrals, read online reviews, and consider talking with a prospective hire's previous clients as well. You should also check that the person or company you're hiring is fully licenced and insured, and make sure to get things like the scope of work, timelines, and payment schedules in writing.
Do I have the necessary permits?
Before your renovations begin, you'll also want to ensure you have the necessary permits for the project— even if you're leaving the upgrades to someone else. Generally, a contractor can get permits on your behalf, but you should have this expectation included in the contract details so it's clear that securing the appropriate permits is their responsibility. Don't forget to keep records and receipts throughout your home renovation to help you keep track of important project dates and costs.
Where to stay during home renovations
It's not always necessary to move out of your home during renovations. Instead, it often depends on the scope of the project and how the work affects essentials like plumbing, electricity, or your kitchen. And don't forget about things like your personal tolerance for noise, dust—and maybe the need to hop over to your local gym every morning for a shower!
If you decide to stay elsewhere during (or for part of) your reno, your options could range from staying with family or friends to arranging for a short-term rental or booking a stay at an extended-stay hotel. The key is to plan ahead, so you're not scrambling to find lodgings after the project starts. And it's important to let your insurance company know your plans as well —they can help make sure you'll continue to have the coverage you need while you're staying elsewhere.
TD Insurance customer? Contact us before beginning a home renovation.
Renovations can sometimes be a tricky process, but we want to help you understand how changes to your home can impact your insurance. Check your policy before your next home project on MyInsurance, and contact us if you have questions about your home insurance and renovations.
Prefer to chat online? No problem! We offer live chat support on our website, with TD Insurance Advisors ready to help you.
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The content on this page is for general information purposes only and does not constitute legal advice. Coverages described herein may be subject to additional eligibility criteria, limitations and exclusions. In the event you make a claim, potential indemnification is also subject to the receivability of the claim and the type of coverage you bought.
In the case of conflict between the content on this page and your policy wordings, your policy wordings shall take precedence.