Starting a home renovation without reviewing your insurance situation is one of the most common — and costly — mistakes Canadian homeowners make. A standard home insurance policy may not cover damages that occur during construction, and failure to notify your insurer of a major renovation can void your coverage entirely. This guide explains what you need to know before the first nail is driven.
Does My Home Insurance Cover Renovations?
Standard home insurance policies in Canada are designed for occupied, finished homes — not active construction sites. When you start a major renovation, several risk factors change:
- Your home may be partially unoccupied or exposed to the elements
- Workers and their tools are on your property
- Materials may be stored on-site and at risk of theft
- Unfinished construction creates new fire, water, and injury risks
Most standard policies have exclusions or limitations for homes "under construction." Without notifying your insurer, you may unknowingly lose coverage.
When You Must Notify Your Insurer
Always contact your home insurance provider before starting any renovation that:
- Has a total project value over $100–$25,000 (thresholds vary by insurer)
- Involves structural changes
- Involves removing exterior walls or the roof (even temporarily)
- Results in the home being vacant or partially unoccupied
- Involves adding a suite or changing the occupancy of the home
- Involves significant electrical or plumbing changes
Your insurer may: adjust your premium, add an endorsement, require a builder's risk policy, or in some cases require you to obtain a separate renovation insurance policy for the duration of construction.
Builder's Risk Insurance
For large renovations — typically $50,000+ or involving significant structural work — your insurer or a separate insurance provider may recommend a Builder's Risk (also called Course of Construction) policy. This covers:
- Materials stored on-site before installation
- Damage to work in progress (fire, wind, theft, vandalism)
- The structure during construction
Builder's risk policies typically cost 0.5–1.5% of the construction value annually. On a $100,000 renovation, expect $500–$1,500 for a one-year policy. Your general contractor may carry this coverage — confirm before buying a duplicate policy.
Contractor Insurance: What to Verify
Before any contractor starts work on your property, verify they carry:
| Insurance Type | What It Covers | Minimum Recommended |
|---|---|---|
| Commercial General Liability (CGL) | Injury to third parties, property damage caused by contractor | $2 million per occurrence |
| WSIB / WCB Coverage | Workers' compensation if a worker is injured on your property | Valid clearance certificate required |
| Tools and Equipment | Contractor's tools and equipment | Contractor's responsibility |
| Errors and Omissions | Professional liability for design errors | Required for architects/designers |
What Happens to Your Liability Coverage During Renovation?
Your home insurance liability coverage generally protects you if someone is injured on your property. However, some policies exclude injuries to workers during construction. Confirm with your insurer that your liability coverage remains in force during the renovation and covers situations related to contractor activity.
Protecting Renovation Materials and Contents
During a renovation, materials stored on-site (flooring, fixtures, cabinets) represent significant value. Check whether your policy covers:
- Materials theft: Construction sites are common targets for material theft. Ensure your coverage includes theft of materials before installation.
- Personal property displacement: If you're moving furniture to storage during renovations, confirm your policy covers items in transit and in storage.
- Increased liability from exposed construction: Open excavations, scaffolding, and exposed wiring create new liability risks.
Post-Renovation: Update Your Policy
- The increased replacement value of the home (new kitchen, finished basement, addition)
- New high-value fixtures (custom cabinetry, stone countertops, upgraded bathrooms)
- Any change in occupancy (adding a rental suite changes your policy type)
- New structures (decks, detached garages, sheds)
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Get KOHO Free — Use Code 45ET55JSYAFrequently Asked Questions
Will my home insurance rates go up after I notify them of a renovation?
Your premium may increase slightly during the renovation period to reflect additional risk, and will be adjusted again after completion to reflect the increased home value. The cost of proper coverage is small relative to the risk of a denied claim.
What if my contractor causes damage to my home during the renovation?
If the contractor has adequate general liability insurance, their policy should cover damage they cause to your property. This is why verifying contractor insurance before work starts is essential. If they're uninsured and cause damage, your only recourse may be a costly legal claim.
Do I need separate insurance if I'm doing a major DIY renovation?
Yes — the same risks apply. Notify your insurer, confirm your coverage during the project, and consider a builder's risk endorsement for large DIY projects. The fact that you're the one doing the work doesn't reduce the risks of theft, fire, or weather damage to materials and the structure.