Renovating Your Ottawa Home? Insurance Gaps to Cover Before You Start

In This Article

• Why a Renovation Changes Your Risk
• The Notification Rule Most Homeowners Miss
• The Vacancy Trap
• When You Need Builder’s Risk Coverage
• Your Contractor’s Insurance Is Not Your Insurance
• After the Work Is Done, Update Your Rebuild Value
• Frequently Asked Questions

It is week six of the kitchen renovation. You moved out to stay with family a month ago because there is no working plumbing. Overnight, a pipe bursts behind the wall, and by morning the subfloor and the new cabinetry stacked in the dining room are soaked. You file a claim, and the adjuster asks how long the house has been unoccupied.

Scenarios like this are among the most common ways an Ontario homeowner discovers, after the fact, that a renovation opened a gap in coverage nobody flagged when the project started.

Renovation season in Ottawa peaks through summer and early fall. Before yours begins, here is what a renovation changes about your insurance and what to do about it.

Why a Renovation Changes Your Risk

Your home insurance policy was priced against your home as it was when you bought the coverage: occupied, finished, and with a known replacement cost.

A renovation alters all three. The house may sit empty for weeks. Walls come open, exposing plumbing and wiring. Materials worth thousands sit in the driveway or the garage. Trades come and go with the doors unlocked. And when the work finishes, the cost to rebuild the home is higher than the figure your policy was written against.

None of this should stop you from renovating. It just means having one conversation with your broker before any work begins.

The Notification Rule Most Homeowners Miss

Ontario’s Statutory Conditions, which form part of every home insurance policy in the province, require you to promptly notify your insurer in writing of any material change in risk. A material change is any change that would cause an insurer to charge a different premium or decline the risk altogether.

A major renovation generally qualifies. So does leaving the home unoccupied while it happens.

Homeowners tend to underestimate what happens if they skip this step. Insurers do not waive the requirement just because a claim is sympathetic. If the insurer was not told about a material change and a loss occurs, the claim can be denied, leaving you to carry the cost of both the damage and the renovation.

Notifying your broker takes one phone call, and it is the most important step on this list.

The Vacancy Trap

If you are moving out during the work, this is the gap most likely to catch you.

Most home policies contain a vacancy or unoccupancy exclusion. Once a home has been vacant beyond a set period, commonly between 30 and 60 days depending on the policy, coverage for certain perils is reduced or removed entirely. The perils usually affected are the ones most likely to occur in an empty house: water damage, theft, and vandalism.

The fix is simple and inexpensive. A vacancy permit or unoccupancy endorsement, arranged through your broker before you move out, keeps the relevant coverage in place while the house is empty.

Timing is the catch. Arrange it before the home becomes vacant, not after a loss has occurred. Specific terms and time limits vary between policies, so confirm the details of yours with your broker.

When You Need Builder’s Risk Coverage

For smaller cosmetic work, an endorsement on your existing home insurance may be enough. It is usually the cheaper route, though these endorsements often carry narrower coverage and may exclude higher-risk perils such as theft of materials or vandalism.

For substantial projects, the appropriate coverage is usually a builder’s risk policy, also called course of construction insurance. That generally applies to:

• Structural work
• Additions and extensions
• Gut renovations
• Anything requiring a building permit
• Projects where the home will be unoccupied for an extended period

Builder’s risk insurance is designed for a property under construction rather than one being lived in, so it covers situations a standard homeowner policy is not built for. It typically covers the structure during the work and the materials on site.

This matters most if you are acting as your own general contractor. An owner-builder takes on risk that would normally sit with a professional builder, so your coverage needs to account for that.

Your Contractor’s Insurance Is Not Your Insurance

Homeowners routinely assume that hiring a contractor transfers the risk. Hiring a contractor does transfer some of it, but only if the contractor’s coverage is real and current.

Before work starts, ask for two documents:

A certificate of insurance showing commercial general liability coverage, with the coverage limits and the expiry date visible. Where possible, ask for it directly from the contractor’s broker rather than accepting a photocopy.

Proof of WSIB coverage where it applies. If an uninsured worker is injured on your property, that is not the moment you want to discover a gap.

Neither document protects your building or your belongings. They protect you from liability arising out of the contractor’s work, which is a distinction that catches a lot of homeowners off guard. Our contractors insurance page sets out what a properly covered contractor should be carrying.

After the Work Is Done, Update Your Rebuild Value

A finished basement, an addition, or a substantially upgraded kitchen raises what it would cost to rebuild your home. If your policy limit still reflects the pre-renovation house, you are underinsured, and you may not find out until you file a claim.

Call your broker once the work is finished and ask them to review the replacement cost. It is a short conversation, and it closes out the one you had before the project started.

Frequently Asked Questions