Home Renovations and Insurance in Ontario: What Your Broker Wants You to Know Before You Start
Your contractor is booked, the permits are filed, and the Pinterest board is overflowing with kitchen inspiration. But there is one line item most Ontario homeowners forget to add to their renovation checklist: a phone call to their insurance broker.
We see it too often at Roughley Insurance. A homeowner finishes a beautiful basement apartment, a second-storey addition, or a full kitchen gut — and never tells their insurer. Then something goes wrong. A burst pipe. A fire in new wiring. A contractor's apprentice falls through a subfloor. And the claim comes back denied because the insurer was never notified of the work.
Here is what we tell every client who mentions the word "renovation."
Ontario Law Requires You to Disclose Material Changes
This is not a suggestion. Ontario's Statutory Conditions — the legal provisions built into every property insurance policy in the province — require you to promptly notify your insurer in writing of any material change in risk. A material change is anything that would cause an insurer to charge more, add conditions, or decline the risk altogether.
Major renovations almost always qualify. Finishing a basement, adding a bathroom, removing a load-bearing wall, upgrading electrical from a fuse panel to breakers, converting a garage into living space — all of these change your home's risk profile and replacement cost.
What does not typically require a call? Purely cosmetic work. Painting a bedroom, swapping light fixtures, replacing cabinet hardware, or laying new laminate over an existing floor. If no permits are needed and no systems are being touched, you are usually fine.
The rule of thumb we give clients: if it needs a building permit, it needs a call to your broker.
Your Dwelling Limit Probably Needs to Go Up
Every home insurance policy has a Coverage A dwelling limit — the maximum your insurer will pay to rebuild your home after a total loss. That limit was set based on your home's features at the time the policy was written.
A $60,000 kitchen renovation with custom cabinetry, quartz countertops, and a reconfigured layout does not just make your home nicer to live in. It raises the cost to rebuild. If you do not update your dwelling limit to reflect the new replacement value, you are underinsured. And in Ontario, most policies include a co-insurance clause that can reduce your payout proportionally if your dwelling limit is too low relative to the actual replacement cost.
We have seen clients invest $80,000 or $100,000 in renovations and never adjust their policy. After a fire, they discover that the insurer will only pay up to the old limit — or worse, apply a co-insurance penalty that slashes the payout even further.
After any renovation that adds value, ask your broker to recalculate your dwelling replacement cost. The premium increase is usually modest compared to the coverage gap you are closing.
Renovations That Can Actually Lower Your Premium
Not every renovation costs you more on insurance. Several upgrades reduce risk, and insurers reward that:
- New roof: A modern shingle or metal roof with a 25- to 50-year warranty is far less likely to leak or fail. Many insurers offer a discount.
- Updated electrical: Replacing knob-and-tube or aluminum wiring with modern copper eliminates one of the top fire risks insurers worry about. Some carriers will not even insure a home with knob-and-tube.
- Modern plumbing: Swapping galvanized or polybutylene pipes for copper or PEX reduces the risk of leaks and water damage.
- Backwater valve: Installing a backwater valve on your main sewer line helps prevent basement sewer backup — one of the most common and costly home insurance claims in Ontario. Many municipalities even offer rebates for installation.
- Security system: A monitored alarm system can earn you a discount on your premium.
When you call your broker to report a renovation, mention these upgrades specifically. We can often apply discounts the same day.
When You Need Builder's Risk Insurance
Your standard home insurance policy was not designed to cover a dwelling under active construction. If half your roof is open, your kitchen is stripped to the studs, or a crew is pouring a new foundation for an addition, your regular policy may not respond to a loss during that period.
That is where builder's risk insurance (also called course of construction coverage) comes in. It protects the structure, materials, fixtures, and equipment on site against damage, theft, and vandalism during the construction period. Coverage starts when work begins and ends when the project is complete or the policy term expires.
Builder's risk is especially important for:
- Additions and second-storey builds
- Full gut renovations where the home is uninhabitable
- Any project exceeding $50,000 in value
- Work involving open walls, exposed framing, or temporary weather protection
The cost is typically 1% to 4% of the total project value — so a $75,000 addition might cost $750 to $3,000 to insure for the construction period. Compared to the cost of an uninsured fire or storm hitting an open structure, that is a straightforward investment.
Your broker can arrange a builder's risk policy quickly. We work with carriers like Intact, Aviva, and Wawanesa who offer residential course of construction coverage, and we can often bind it within a few days.
Verify Your Contractor's Insurance — Every Time
Hiring a licensed, insured contractor is not just good advice. It is your financial protection. Before any contractor sets foot on your property, ask for two documents:
1. Certificate of Insurance (commercial general liability) This confirms the contractor carries liability insurance — typically a minimum of $2 million — covering third-party bodily injury and property damage. If a contractor's employee damages your neighbour's fence, breaks a water main, or causes a fire, their liability policy responds. Without it, the claim lands on your home insurance — or worse, on you personally.
2. WSIB clearance certificate Ontario's Workplace Safety and Insurance Board (WSIB) provides workplace injury coverage for construction workers. Most construction businesses in Ontario are required to register with WSIB. There is a limited exemption for sole operators doing residential work hired directly by the homeowner, but the safest approach is to always request a clearance certificate.
Here is why: if a worker is injured on your property and the contractor does not have WSIB coverage, you as the homeowner could be held liable for their injury costs. A WSIB clearance certificate confirms the contractor's account is active and in good standing.
Do not take a contractor's word for it. Ask for the actual documents. A reputable contractor will have them ready and will not hesitate to provide copies.
The Vacancy Trap: Moving Out During Renovations
Major renovations sometimes force you out of your home for weeks or months. This creates an insurance problem most homeowners do not anticipate.
Most Ontario home insurance policies include a vacancy condition that suspends or limits certain coverages — including water damage, vandalism, and sometimes theft — if the home is unoccupied for more than 30 consecutive days. An unoccupied home under renovation is a higher risk: no one is there to catch a leak, notice a break-in, or respond to an alarm.
If your renovation timeline means the house will be empty for more than a month, call your broker before you move out. We can arrange a vacancy permit (an endorsement to your existing policy) that maintains your coverage while the home is unoccupied. The cost varies by insurer and situation, but it is far cheaper than discovering your water damage claim is excluded because no one was living in the home.
Your Pre-Renovation Insurance Checklist
Before the demolition crew arrives, work through this list with your broker:
- Describe the scope of work — what is being done, estimated cost, project timeline, and whether you will need to move out.
- Review your dwelling limit — does it need to increase to reflect the post-renovation replacement cost?
- Ask about builder's risk — for major structural work, get a quote for course of construction coverage.
- Discuss vacancy — if you are moving out for more than 30 days, arrange a vacancy permit.
- Collect contractor documents — get a Certificate of Insurance and WSIB clearance certificate from every contractor on the job.
- Confirm permit compliance — unpermitted work can void coverage if a loss is connected to the unauthorized renovation.
- Call again when the work is done — your broker needs to know the final scope so your policy reflects the completed home.
The Bottom Line
A renovation is one of the biggest investments you will make in your home. Protecting that investment takes more than a good contractor and quality materials — it takes the right insurance coverage at every stage of the project.
We have been advising Durham Region homeowners on renovation coverage for nearly 80 years. Whether you are finishing a basement, adding a deck, or building a full addition, we can review your policy, adjust your limits, arrange builder's risk coverage, and make sure there are no gaps before work begins.
Get a quote or call us at (905) 576-7770 to talk through your renovation plans. We would rather spend 15 minutes on the phone now than see a claim denied later.