5 Things About Insurance You Need to Know Before You Renovate

5 Things About Insurance You Need to Know Before You Renovate
  • Opening Intro -

    If you're about to renovate your home, your insurance policy is probably not the first thing you're thinking about.

    However, it would be a mistake to ignore it!


Many homeowners believe that their standard policies will cover their homes during renovations – but that’s not always true.

Renovations bring new risks, and if something goes wrong, you might find that your insurer has a reason to deny your claim because you were underinsured or did not fulfill your obligations. Consider these 5 elements of insurance that apply during home renovations before you start.

1. You May Need a Vacancy Permit

Staying out of your home for an extended period of time increases the risk or theft, as well as the risk of damages (water for example) going unnoticed.

If renovations require your family to move out for an extended period of time, you may need a Vacancy Permit from your insurance provider.

If you don’t follow notice protocols for extended periods out of the home and something goes wrong, the insurance company could claim that your policy was invalid.

2. Liability Insurance

With contractors and workers on your property completing the renovations, someone may get hurt, and you could be found liable. Your standard policy covers liability if a guest or delivery person injures themselves on your property, but probably not workers. There are much higher risks on a construction site.

Make sure the contractor has liability insurance to cover workers’ compensation or else you could wind up on the hook for a work-related injury.

Turning your home into a construction site can also increase the risks of a fire. Fire coverage in your home insurance policy may be invalidated by the renovations. If you’re not sure how to answer the question: what does fire insurance cover, call your insurer about renovation liabilities.

3. Renovations Can Increase Your Home Value

Significant renovations such as a new kitchen or an addition can significantly change the value of your home – and that could leave you underinsured unless you update your policy. Notify your insurer about your renovations.

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When they’re complete, you may want to have your home re-appraised and get coverage that matches its new value. If a disaster should happen after renovations are complete and you failed to notify the insurer, not only might you be out of pocket the cost of re-doing those renovations; but if the changes were substantial enough your entire policy may be invalid.

4. Ordinance Coverage & Older Homes

Renovations can reveal some big surprises, especially in older homes. During the course of the renovation, if a contractor uncovers dated wiring or some element of the construction that’s not up to the current building code, you will be required to update it.

Outside of the scope of renovations, if your home suffers damage and in the course of repair work a similar concern is discovered, you might have insurance coverage at your disposal. If you have Ordinance coverage in your policy, the unanticipated additional costs of bringing items up to code during the course of repairs might be covered. Without it, you may have to pay the increased cost out of pocket.

other valuable tips:

#5 Reducing Insurance Premiums

Renovations don’t always mean that your insurance premiums need to go up. There are some key renovations that can help you mitigate certain types of damage and potentially qualify for reductions in your coverage. Some great examples include:

  • Sump pumps and backwater valves that reduce the risk of flood damage
  • Alarm systems that reduce the risk of burglary
  • Indoor sprinklers that can mitigate the damage caused by a fire

Before you start renovating, talk to your insurer and make sure you have appropriate coverage. Ask about a Vacancy Permit, liability, increasing your coverage, ordinance insurance, and ways to reduce your premiums.

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