What Every Home Insurance Policyholder Needs to Know
A recent survey revealed that most homeowners aren't telling their insurance providers about major home renovations. This might seem like a small oversight, but it can lead to big problems—including denied claims, policy cancellations, and unexpected out-of-pocket costs.
Whether you’re planning a kitchen overhaul, building a backyard deck, or finishing your basement, it’s crucial to understand how renovations can affect your home insurance. As a family-owned Canadian brokerage, AIM Insurance is committed to helping you protect your investment and avoid costly mistakes. In this article, we’ll break down why disclosure matters, what you need to tell your insurer, and how to stay covered—plus, we’ll share practical tips for a smooth, stress-free renovation.
Why Home Renovations Matter to Your Insurer in Canada
When you renovate your home, you’re not just improving your living space—you’re also changing the risk profile of your property. Insurance companies use detailed information about your home to determine your coverage and premium. If you add a new room, upgrade your kitchen, or finish your basement, the replacement cost of your home increases. That means your current insurance might not be enough to rebuild or repair after a loss.
Bottom line:
If your insurer doesn’t know about your renovation, your policy might not fully protect you.
What Counts as a “Major” Renovation?
Not every paint job or faucet replacement needs to be reported, but many common projects do. Here’s a quick guide:
Major upgrades: Kitchen or bathroom remodels, new flooring, electrical or plumbing overhauls
Additions: Sunrooms, decks, garages, sheds, pools, or hot tubs
Roofing and siding: Complete replacement or significant repairs
Home systems: Upgrading HVAC, installing central air, or adding solar panels
Usually Not Required
Cosmetic updates: Painting, minor landscaping, replacing appliances (unless high-value)
Small repairs: Fixing a leaky faucet, patching drywall
When in doubt, ask your broker! AIM Insurance can advise on whether your project needs to be disclosed.
Home Insurance Risks of Not Reporting Renovations
According to the Canadian Underwriter survey, more than half of Ontario homeowners don’t inform their insurer about major renovations. This oversight can have serious consequences:
1. Denied Claims
If you suffer a loss (like fire or flood) and your insurer discovers undisclosed renovations, they might deny your claim—especially if the renovation increased the risk or value of your home.
2. Insufficient Coverage
Your renovation may increase your home’s value, but your policy’s coverage limit stays the same. If you need to rebuild, you might find yourself under insured.
3. Liability Gaps
If a contractor or visitor is injured during renovations, your liability coverage might not apply if you haven’t disclosed the work.
How to Notify Your Insurer—And When
Best practice:
Contact your insurance broker before you start any major renovation.
What to Tell Your Insurer
Type of renovation: What are you changing or adding?
Timeline: When will the work start and finish?
Contractor details: Are you using licensed professionals?
Materials and costs: Any upgrades to high-value materials or systems?
Occupancy: Will you live in the home during renovations, or move out temporarily?
Timing Matters
Before starting: Always notify before work begins.
During the project: If plans change (scope, cost, contractor), update your broker.
After completion: Confirm the final details so your policy can be updated.
Do Home Renovations Increase Your Insurance Premium in Canada?
Many homeowners worry that telling their insurer will automatically raise their rates. In reality, the impact on your premium depends on the type and scale of the renovation.
Premiums May Increase If:
You add square footage or custom / high-value features
You install a pool or hot tub (increased liability risk
Premiums May decrease If:
You replace old wiring, plumbing, or roofing (reduces risk of fire/water damage)
You add safety features (alarm systems, sprinklers, security cameras)
You improve energy efficiency (some insurers offer discounts)
Pro tip:
Some improvements can actually save you money on insurance. Ask AIM Insurance about available discounts!
Tips for a Safe, Insurable Renovation
Here’s how to keep your project on track and your coverage intact:
1. Hire Licensed Professionals
Always use insured, reputable contractors. Ask for proof of insurance and check references.
2. Get Permits and Inspections
Un-permitted work is a big red flag for insurers—and can void your coverage.
3. Document Everything
Take before-and-after photos, keep receipts, and maintain a file of permits and contracts.
4. Secure the Site
If your home will be vacant during renovations, let your insurer know—vacant properties are higher risk.
5. Check Your Contractor’s Insurance
Your contractor should have liability and workers’ compensation coverage. If not, injuries or damages could become your responsibility.
6. Review Your Policy
After the renovation, review your coverage with your broker. Make sure your policy reflects your home’s new value and features.
Renovation Scenarios: Real-World Examples
Scenario : The Basement Suite
The Project:
Dave in Burlington finishes his basement, adding a rental suite for extra income. He notifies AIM Insurance, who updates his policy and ensures he has the right liability coverage.
The Result:
A burst pipe floods the basement. Dave’s claim is covered in full, including lost rental income during repairs.
Scenario : The Backyard Pool
The Project:
The Chens in Mississauga add a backyard pool. They tell their broker, who adjusts their liability coverage and recommends safety features.
The Benefit:
Their kids enjoy the summer safely, and the family is protected if a guest is ever injured.
How AIM Insurance Can Help
At AIM Insurance, we believe in proactive, personalized service. Here’s how we support you before, during, and after your renovation:
Expert advice: Our brokers help you understand your coverage and avoid surprises.
Quick response: Average 1-minute response time—call, email, or message us anytime.
Custom solutions: We tailor your policy to your home and lifestyle, so you’re never under- or over-insured.
Claims support: If something goes wrong, our dedicated team guides you through every step.
Planning a renovation?
Contact us before you start. We’ll help you update your coverage, explore discounts, and protect your investment.
FAQs About Home Renovations and Insurance
Q: Will my premium always go up after a renovation?
A: Not necessarily. Some upgrades (like new wiring or a new roof) can lower your risk and may even reduce your premium. Others, like adding a pool, may increase your liability risk and cost.
Q: What if I do the work myself?
A: Even DIY renovations should be reported—especially if they involve structural changes, electrical, or plumbing work.
Q: Is temporary vacancy during renovations a problem?
A: Yes—vacant homes are at higher risk for theft, vandalism, and damage. Let your insurer know if you’ll be moving out, even temporarily.
Q: What if I forget to report a completed renovation?
A: Contact your broker as soon as possible. It’s better to update your policy late than never—especially before you need to make a claim.
Q: How do I know if my contractor is properly insured?
A: Ask for a certificate of insurance showing liability and workers’ compensation coverage. Your AIM Insurance broker can help you review it.
Contact AIM Insurance
Ready to renovate?
Don’t risk your coverage—call AIM Insurance first!
