Updating Your Insurance After A Home Renovation: Your Questions Answered
Whether you’re renovating your home to simply give it a bit of an update, to maximize your space, create another room, or if you’re preparing to sell, it’s likely to end up costing you a fair bit.
But hopefully, the money that you’ve spent on your renovation should increase the value of your home by much more than what you spent on it.
But, what about when the renovation is complete… what do all those renovation improvements and the increased home value mean for your home insurance?
To find the answers to these questions, we’ve asked Rachel from Duuo insurance everything you need to know about updating your insurance after a home renovation below.
Interior Design Toronto : Do I need to notify my insurance company before renovating?
Yes, it’s important to get in touch with your current home insurance company before you start on any renovations. Your home insurance policy will only protect your home and personal belongings against damage or loss from unexpected events — renovations would not count as unexpected.
This means that any damage sustained to your property or belongings during the renovation may not be covered. It may be that you just need to notify your insurers about the renovations to ensure you’re covered, or they may tell you that you need to take out additional insurance while the renovations are taking place.
You also need to ask about insurance coverage for the building materials and tools.
Robb & Company
Interior Design Toronto : My home will be vacant during the renovation — do I need to change my coverage?
You may be required to change your insurance policy if you’re going to be away from your house and leaving it vacant during renovations. It’s fairly typical for your home insurance policy to require you to be living in the house full time while it’s insured and if you have to move out temporarily for renovations this could be considered breaking one of the policy requirements. Talk to your insurer as you may need a vacancy permit to ensure your coverage is still valid.
Interior Design Toronto : Do I need insurance to cover the safety of people working on the renovation?
You may also need additional liability insurance in case someone is injured on your property during the renovations. Your policy probably comes with some liability coverage already, but with renovations, there are more risks with more people in and out of your home. This is something you need to discuss with your insurance broker.
Interior Design Toronto : Once the renovation is complete do I need to update my insurance?
Yes, you will need to let your insurers know exactly what renovations you have undertaken as they may have changed the value of your property and the amount that it would cost to replace your property and the contents.
Interior Design Toronto : If I’ve added a rental space, do I need different insurance?
Your renovations might have included creating a separate apartment to rent out long term or setting up space for an Airbnb — this will affect the kind of insurance that you need. Your home insurance policy is unlikely to cover either of these situations.
If you’re renting through somewhere like Airbnb then you can get short-term rental insurance that will cover you for liability, replacing your home and contents, and other situations like vandalism or loss of income.
For longer-term rentals, you will need Landlord’s insurance to cover a range of things such as liability, the building, any damages and personal property. And you should also encourage the people that you rent to get tenant insurance cover as well. A good place to recommend your tenants look for insurance is Duuo — they provide flexible and comprehensive coverage at affordable prices to ensure full protection.
Robb & Company
Interior Design Toronto : DIY renovations vs hiring a professional — are there insurance implications?
Most home insurance policies won’t cover you if you’re doing DIY renovations. So if you are planning on doing any of the renovations yourself, or even if you are just going to be project managing it, then you should look into getting builder’s insurance.
Do different kinds of renovation have different insurance implications?
If you’re renovating your home so that you can start a business, or to rent out a spare room or new flat, then you will need additional, specific insurance policies.
Interior Design Toronto : Which renovations raise insurance rates?
Anything that significantly increases the value of your property or the replacement value of the property and contents is likely to increase your insurance rates.
These are some examples of renovations that could increase your insurance costs:
Converting part of your home into a home office or workspace to start a business requires different insurance.
Adding a swimming pool can increase the amount of liability coverage you require, which will increase your insurance rates.
Extensions or anything that increases the square footage will increase the replacement value in your policy.
Kitchen and bathroom renovations are also going to bump up the amount it would cost to replace your property and belongings.
Interior Design Toronto : Which kind of renovations lower insurance rates?
There are some renovations that can actually lower your insurance rates, mainly if it’s making your house safer or more efficient:
Installing a new alarm system or additional security that makes it less likely your house will be broken into.
Updating old plumbing and electrical wiring to meet current building codes will make them less risky for your insurers.
Adding a new roof can also lower your insurance rates.
Anything that makes your home more energy-efficient like new heating or air conditioning system.
Interior Design Toronto : What insurance products or services do I need during the renovation?
You will need to contact your insurers to find out what additional products or services you may need during the renovation. If you’re undertaking major renovations such as building an extension or taking down exterior walls you may need to change your policy type. Your insurer might require you to update your policy to a building under construction.
You could also need to have construction insurance or a builder’s risk insurance for homeowners’ policy. These are all things that will depend on your specific circumstances and exactly what renovations you are doing so it’s important to talk to an insurance provider or a broker — a good place to start looking for these is Zensurance who provide builder’s risk insurance that will protect you for the duration of the renovations.
Interior Design Toronto : What type of insurance should a contractor have?
When choosing a contractor to work with it’s important to ensure they have the right insurance and licences. You can request proof of their insurance coverage before hiring a contractor. Contractors should have full liability insurance and workers’ compensation. And make sure that you check out any subcontractors your contractor may be bringing in to do parts of the renovation.
Overall, it’s essential to talk to your current insurance provider or an insurance broker before you start any home renovations. While there is a chance that it might increase your insurance costs or mean that you need to take out additional policies if you don’t then you risk invalidating your policy and be liable for full costs if there are any problems during or after the renovations.
About the Author
Rachel Devitt is Content Specialist at Duuo, an on-demand insurance service based in Canada. Duuo offers a range of easy and flexible coverage plans to meet the ever-changing needs of consumers in a modern world, with simple plans for tenants, events, short-term rental, and gig services.
Website : www.duuo.ca
Facebook : @heyduuo
Instagram : @heyduuo
LinkedIn : @duuo-by-co-operators
