Home Reno: Check Insurance First
Written by Kelley Keehn
Tuesday, July 2nd, 2019
There are two seasons in Canada: winter and construction.
While the latter usually pertains to our roads, a recent survey found 39% of Canadians are planning to renovate their homes during the warmer months.
Are you tackling a big home project? Have you thought about insurance?
“Insurance could be one of the biggest items to consider when undertaking a home reno project," says Matt Hands, Senior Business Unit Manager of Insurance at Ratehub. "Not letting your insurance provider know about your plans can actually come with big risks – including a denied claim, or worse, a cancelled insurance policy."
Here are 6 things to consider if you're planning home renovations:
1. Contact Your Insurance Provider Before You Start the Reno
“It's easy to forget to check in with your home insurance provider. We spend all this time researching things like contractors and materials, but we aren't taking the same care with our insurance, which is what protects us if something goes wrong," says Hands.
"It's important that before you even start your renovations, you connect with your provider to understand what coverage you have during the renovations, and how the changes could impact your insurance after."
Don't forget to contact your mortgage provider as well. The lender will need to approve any structural changes, such as adding a floor or moving a load bearing wall.
2. Doing it Yourself? You Still Need to Contact Your Insurer
“It doesn't matter who's doing the work, you still need to be certain you're covered, and your insurer needs to be informed," says Hands.
3. Contact Your Insurer After It's Done
Reach out to your insurer again once the renovation has been completed.
“Your coverage will likely need to be updated to reflect the changes you've made to your property," said Hands. "For example, if your renovations have increased the square footage of your property or the replacement value of your home, the cost to insure your property will increase."
4. Get A Vacancy Permit if You're Leaving Your Home
If you're vacant from your home and it's left unattended by you for 30 days or more, it's likely in violation of your policy. Hands suggests inquiring about getting a vacancy permit.
“It typically costs an extra $30-$50 per month while you're away. If you're still checking in regularly on your home, then you may not need this permit, but the key thing to remember is you, the homeowner, need to be the one checking in. It's important to connect with your insurance provider to understand exactly what their expectations are."
5. Look at Potential Insurance Benefits to Renovating
“Some improvements that reduce your risk for liability, meaning the likelihood of someone injuring themselves on your property or causing property damage, or that protect your home from common hazards that affect your insurance could help lower your premiums," Hands says.
An example where a renovation can save you money on your insurance is replacing a weathered roof. This decreases your risk for roof leaks and damage. If the improvements increase the replacement value of the home, your premiums will likely increase to reflect that new value.
6. Adding a Liability Can Increase Your Costs
“Your premium can also increase if you're adding anything that creates a liability," says Hands.
“A pool is a great example of this. As we head into summer, if you're planning to add a pool, you can expect to see your premium increase, because you're asking your insurer to take on more risk – both with possible damage to the pool and for any potential accidents it may cause."
Safeguard Your Summer Projects, Big and Small
A quick call to your insurance provider can ensure you don't face a big surprise because you weren't covered for an unexpected event.
This article or video (the “Content”), as applicable, is provided by independent third parties that are not affiliated with Tangerine Bank or any of its affiliates. Tangerine Bank and its affiliates neither endorse or approve nor are liable for any third party Content, or investment or financial loss arising from any use of such Content....
The Content is provided for general information and educational purposes only, is not intended to be relied upon as, or provide, personal financial, tax or investment advice and does not take into account the specific objectives, personal, financial, legal or tax situation, or particular circumstances and needs of any specific person. No information contained in the Content constitutes, or should be construed as, a recommendation, offer or solicitation by Tangerine to buy, hold or sell any security, financial product or instrument discussed therein or to follow any particular investment or financial strategy. In making your financial and investment decisions, you will consult with and rely upon your own advisors and will seek your own professional advice regarding the appropriateness of implementing strategies before taking action. Any information, data, opinions, views, advice, recommendations or other content provided by any third party are solely those of such third party and not of Tangerine Bank or its affiliates, and Tangerine Bank and its affiliates accept no liability in respect thereof and do not guarantee the accuracy or reliability of any information in the third party Content. Any information contained in the Content, including information related to interest rates, market conditions, tax rules, and other investment factors, is subject to change without notice, and neither Tangerine Bank nor its affiliates are responsible for updating this information.
Tangerine Investment Funds are managed by Tangerine Investment Management Inc. and are only available by opening an Investment Fund Account with Tangerine Investment Funds Limited. These firms are wholly owned subsidiaries of Tangerine Bank. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.