You will be doing some renovation work on your residence and you do not know what your home insurance policy covers. If a loss occurs, who covers what damages? What measures should be taken by you, before starting the renovation work?
Whether you plan to renovate your property yourself or if you use a contractor, you should be well-informed of your insurance coverages!
Verify your insurance policy
The Insurance Bureau of Canada (IBC) has developed a checklist of information to verify prior to starting renovation work.
- Call your insurer or your broker to check what your policy covers before starting the work: renovations will increase some risks such as water damages. It is important to make sure that your policy will protect your property for the duration of the ongoing work.
- Your home’s replacement value can change: you are linked to your insurer by contractual obligations. The home’s replacement value is the cost of re-building your unit in case of partial or total loss. Therefore, it is your duty to inform your insurer of any change that may affect this value.
- If the ongoing work implies moving out temporarily, you have to know that a vacant dwelling can invalidate your home insurance policy.
- A vacant home increases risks such as theft or vandalism. Make sure to validate with your insurer whether your vacant unit is covered during this period, if not, can you add this coverage by endorsement.
- Before signing with a contractor, ask him for a certificate of insurance: this certificate should include policy number, insurer, and expiry date of the policy. This certificate should provide proof of Liability insurance for property damages and bodily injury, during the period of the work to be performed. Home insurance policies also include exclusions during renovation periods, even though you do it yourself. To make sure that your property is adequately protected, contact us!
In case of damages
Verifying your insurance coverage before any renovations are done will enable the renovations to be carried out without worrying, as well as avoiding any headaches between your insurance and your contractor’s.
In Bracebridge, Ontario, a landlord signed a contract with a contractor in 2008 in order to renovate the exterior of her property. At the end of the work in 2009, she discovered several damages to her property with an estimated cost of $100,000. These damages were stains on the carpets, dents and scratches on the windows, as well as loosen windows. In 2011, she decided to file a complaint to bring the case to court. The homeowner’s insurer refused to cover the damages based on two exclusions: the faulty workmanship exclusion and the other was for loss or damage to property « while being worked on, where the damage results from such process of work ».
According to the Ontario Superior Court, the faulty workmanship was not a valid exclusion because the contractor was not hired to replace carpets and windows. In addition, the homeowner purchased an “all-risk” policy, and the renovation work was on the exterior. The insurer was therefore liable for covering damages that were not directly linked to the outside renovation. The home insurer was ordered to pay for the damages to the interior of the property.
At APRIL, we offer you a vacant home insurance policy if you have to temporarily vacate your property during the renovation period. This coverage protects your residence against fire, wind, water damages, sewer back up* and vandalism*.
This coverage extends to cover your legal liability for bodily injury, or property damages to third parties, where you may be legally liable.
*subject to eligibility criteria