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Doing a Major Home Reno? Make Sure You’re Covered!

October 17, 2019 / Home Insurance

Doing a Major Home Reno? Make Sure You’re Covered!

Your next home renovation will go perfectly…just like they always do.

Now, the chances that you read that statement ironically may depend on whether you’ve ever done a major home reno in the first place.

Either way, you should rightfully plan for — and expect — nothing but success. At the same time, even if not through any past tragic experience with a reno — and we truly hope not! — it’s also important to have a realistic view of the various risks involved with such a large and important project.

It’s all about giving yourself the best chance of taking that vision from your brain to your reality. After all, it’s your home, and before you welcome people in to disassemble and then recreate it, you need a plan.

And so perhaps the biggest risk to any project, of any type, is starting down the road of investing time, money, and emotion without a proper roadmap.

That means professional design plans, and depending on the nature of your reno, engineering drawings. They may be required in the case of mechanical work on pipes, ducts, and large appliance installations, as well as drawings related to structural changes to existing floors, walls and beams, or entirely new construction on your property.

Unless you have the professional experience to do the job yourself, you’ll need to hire a general contractor; you may want to remain hands-on as the project manager, but that too is a job that can be performed by someone else.

Even if just numbered paint chips next to room names, putting your plan to paper is the only way for you and your team to define the scope of work, how much it might cost in time and materials, and what it will look like in the end (and of course, when the end will come!).

Once you have a plan, you’ll need approval from your city planning and permit office to proceed with the renovation. This is important for two reasons, and the first is most obvious — should any portion of your renovation require a permit and you decline to get one, you’re at risk of having to undo the work in question, should the city ever become aware of it. It could also be a safety risk, which often explains why certain plans are rejected by city planners, and have to go back to the literal drawing board before they’ll be approved for a development permit.

You are also going to need to inform you insurance carrier of the renovations, especially when it comes a move out project.

Current home insurers will not cover the materials, tools or contractors that are necessary for any construction project; if you incur a loss related to a reno that wasn’t permitted, your insurance claim will become that much more difficult.

There’s nothing wrong with doing a home renovation; doing it without consulting with your insurance broker is not. Why? Because you may be altering the terms of your insurance contract, which is a material change to the agreement. Your insurer needs to know about renovations — particularly major renos — so they can make an informed decision about what will and will not be covered in the event of a claim.

Should you require a permit, city hall will also be concerned with risk to (to you and your home, as well as to nearby public utilities), and will want to know that your contractors are licensed, bondable, and insured. Even if you’re doing a small reno that doesn’t require approval from the city, you should only work with contractors who have all the right credentials, including sufficient liability insurance and WorkSafeBC coverage.

You’re almost there — so do you have a Course of Construction (COC) insurance policy? Yes, it does exist, and that’s because nothing in your existing home policy is likely to protect your home from losses that may occur when your home is under renovation.

Think of it. The doors are wide open, contractors are in and out (wielding power tools, oil-based paint, and solvents), and you’re at work. It’s a terrible thought, but during a renovation, the typical safeguards we put in place at home on a daily basis are missing. Anything can happen, and even with permits in place and trustworthy contractors, you can still experience a loss.

That’s where COC insurance comes in. Unlike most other renovation expenses, it’s not something you can point to later and say, “Isn’t this beautiful? We worked hard for that!” But just like your project plan, insurance is one of the best ways to guarantee a positive outcome in the end.

The good news is that you, like many others in this tight economy, have decided to stay in your home and invest in it. It should feel exciting — you don’t need the stress of a reno that ends up costing you more than you bargained for.

No matter the dollar value, talk to your insurance broker before your next home renovation project.

We’re All About You.