What you need to know about your insurance and home renovations:

Are you finally planning to tackle that kitchen renovation? Or perhaps you're finally looking to add a wooden deck to your backyard for summer parties and barbecues. Thinking about finishing your basement? – Major home renovations can be anything from a complete overhaul to structural changes, additions, and demolitions. When you're in the planning stages of a renovation, you've likely already budgeted and timed it, and you're considering various potential contractors you want to hire. Like many of us, you may have forgotten to contact your home insurance company or broker to inform them of the changes you're planning.

Why? While a home renovation can be exciting, it's not just about spreading the word. Your home insurance company should be informed of any renovations you plan to make to your home so that your insurance coverage can be reviewed and possibly adjusted accordingly.

But wait – what if it means you'll have to pay more for your insurance? Many homeowners hesitate to tell their broker or provider about a recent renovation because they don't want their premiums to go up. Understandable, but it could cost you more money later.

Here's what you need to know about your home insurance and home renovations.

Why should you inform your broker or home insurance provider about renovations?

It's important to inform your broker and/or home insurance company, as this ensures your policy reflects the current replacement value of your property. With numerous renovations, your property's value will increase, which will raise the replacement cost and, consequently, your premiums. Homeowners may hesitate on this point, especially after investing so much money in their recent renovations. Why spend more money?

Let's say part of your house was destroyed or severely damaged in a fire. If your home insurance company finds out you made renovations to your house and weren't informed of the changes, your most recent renovation might not be covered because it wasn't included in your policy.

If your renovations are extensive enough to warrant leaving your property unoccupied for more than 30 days, your home becomes more attractive to thieves and increases the possibility of damage occurring while it's empty. If your home is left vacant for 30 days or more and utilities are shut off during the repairs, this could void your insurance policy.

There's also the issue of liability. Many homeowners assume their standard home insurance will cover accidents and injuries while the crew they've hired is working on their property, but many policies exclude "properties under renovation." Without adequate insurance from your home insurance company beforehand—such as a builder's risk policy—you could be left to bear all the costs yourself.

Calling your broker and informing them of the changes can expedite the review of your coverage, adapt it to the new updates, and potentially allow you to purchase additional temporary insurance to cover your property during the renovation period. This can also include theft coverage during this time.

The advantages of informing your home insurance broker about renovations

Beyond the benefit of being covered should something happen, there's another reason why you should inform your home insurance broker or provider about any updates you plan to make: because you may be eligible for discounts. Not only can renovations increase your home's value and attract more potential buyers later on, but they could also qualify you for a discount. Depending on your provider, eligible renovations may vary. They may include:

• A new roof. Home insurance companies prefer newer roofs, regardless of the material they are made of. Older roofs are riskier to insure because leaks occur more frequently, which could eventually cause water damage.
• Install a sewer backup system. This can reduce your risk of flooding and is considered by many home insurance companies as an added safety measure.
• Modernizing your home systems, such as electricity, plumbing, heating, etc., is essential. If you have an older home that uses a push-button and tube electrical wiring system, making certain upgrades may qualify you for a rebate.
• Purchasing home security systems. Home security systems, such as motion-activated lights, video surveillance, and home alarms, reduce your risk of theft and vandalism, which may qualify you for a discount. Not all systems are approved, so be sure to check with your supplier first.

It's important to note that not all renovations will qualify for a discount, and some will only increase the replacement cost, hence the higher premiums. Nevertheless, it's crucial to update your insurance broker to ensure your new renovations are covered and that you're protected during the construction period. As always, it's better to be safe than sorry, especially during a renovation when stress and excitement can run high.

Good renovation!